Capital finance in local government

Abstract

The term "capital finance" means for purposes of this paper all measures and techniques to meet the requirements for physical investment of local authorities. The distinction of revenue and capital financing should be clearly expressed by the budgeting management and accounting procedure. Capital expenditure may be performed on all levels' of public administration. Which level performs, .which investments depends on the general political, social and administrative set-up of a country. Where a sufficient minimum of Local Government is developed, local autonomy includes the right of capital outlay by decision of local Councils. The ratio of current and capital expenditure in its division between central and local level indicates strength or weakness .of Local Government in a similar way as the ratio between own resources and financial means granted out of central funds.