World Observatory on Subnational Government Finance and Investment

Increasing access to data and enhancing capacity in multi-level governance and subnational government finance

The World Observatory on Subnational Government Finance and Investment (SNG-WOFI) is a solution to addressing the above-mentioned data gap. By collecting and analysing standardized indicators and information, it aims to raise the level of knowledge on multi-level governance and finance and strengthen the dialogue across all levels of government, at the international, national, and subnational levels. 

Covering over 120 countries and territories, the SNG-WOFI initiative is the world’s leading source of internationally comparable data and analysis on subnational government structure and finance. It was launched in November 2017 as a multi-stakeholder initiative led by the Organization for Economic Cooperation (OECD) and the United Cities and Local Governments (UCLG), supported by the United Nations Capital Development Fund (UNCDF), Agence Française de Développement (AFD), Council of Europe Development Bank (CEB) and the Development Partners Network on Decentralization and Local Governance (DeLoG). The initiative contributes to SDG 17 on financial resource mobilization and capacity building, SDG 1 on poverty reduction and SDG 16 on accountable and transparent governance. It also contributes to IPoA priority 7 on mobilizing financial resources for development and capacity building, priority 8 on good governance at all levels and priority 1 on productive capacity. 

The overall goal of the SNG-WOFI initiative is to increase knowledge of multi-level governance and finance by collecting and analysing standardized indicators and information. More specifically, its objectives are three-fold: 

• Ensure standardized, reliable, and transparent access to data on subnational government structure, finance, and investment; 
• Support international dialogue and decision-making on multi-level governance and subnational finance; 
• Serve as a capacity-building tool on subnational governance and finance. 

The initiative is guided by a Steering Committee, consisting of national governments, in particular members of the Regional Development Policy Committee and the Fiscal Network of the OECD, subnational governments, international organizations and networks, development banks, donors and think tanks. The Committee meets on a regular basis to provide feedback on the work of SNG-WOFI and guidance on future directions such as the improvement of the methodology, the potential sources of data, the expansion of countries, and the regularity of data collection. The steering committee meeting was crucial to build a common understanding about data collection, analysis, and interpretation. It also allowed for important progress on building a global network of experts and institutions in all regions to enhance North-South and South-South exchanges.  

The 2016 pilot study was the first attempt to build a systematic data compilation on local finance across the world, based on quantitative and qualitative data. It confirmed that there is a growing demand worldwide for reliable, objective and comparative information and data on different topics regarding multi-level governance and finance, particularly in the least developed countries. Therefore, UNCDF as UN’s capital investment agency in the LDCs has been actively providing technical support for the LDCs to contribute to the SNG-WOFI. The purpose is to achieve: (1) recognition of subnational governments’ role in helping in the monitoring of global agendas, including achieving SDGs, mitigating climate change, and Financing for Development; (2) measuring the contribution of local government fiscal space and decentralization to the countries’ graduation from the LDC status; (3) spotlighting the role of fiscal decentralization in regional development.  

UNCDF and UCLG oversaw LDC data collection and analysis for the 2019 SNG-WOFI report. There are 23 LDCs in the database, including 20 from Africa and three from Asia-Pacific. During the exercise, a group of LDC experts received training and capacity building on the methodology. The experts exchanged different challenges faced by each LDC and agreed on the best approach for standard data collection through South-South exchanges. Data and information collected include subnational government structure and territorial organization and subnational finance including expenditure, revenue, investment, and debt. The first SNG-WOFI report was launched in 2019 at the First International Conference of SNG-WOFI. Representatives from all sectors and various stakeholders in both developed and developing countries participated in the conference. LDC Ministers emphasized the importance of this initiative and fiscal data in promoting local development and the critical contribution of local governments. The SNG-WOFI report has been presented in several international conferences and helps to demonstrate the importance of data collection on local public finance, understand the trends and engage national stakeholders in discussions on realities and comparison in local government finance.  

Among the 23 LDCs in the database, 10 have basic subnational finance data while the other 13 lack such data due to the lack of technical and financial capacity, despite the significant efforts made by UNCDF and UCLG to collect data on the LDCs. There is clearly a need for better data on subnational governments in Africa, and beyond in LDCs. Therefore, as an ongoing initiative, SNG-WOFI is sustainable good practice that can bridge the statistical gap, thereby promoting fiscal decentralization, subnational finance, and governance accountability. It calls for increased mobilization of the international community, donors, and national governments to improve budget and reporting frameworks and establish a robust public finance statistical system, collecting data at national and subnational levels, in line with international standards.