Subnational Debt Finance and the Global Financial Crisis

This note focuses on the impact of the global financial crisis on subnational debt financing. We approach the following questions: Why is subnational debt financing important? What are the impacts of the crisis on the fiscal balance and financing cost of subnational governments (SNGs)? What explains the variations across countries in the ability of SNGs to proactively address the threat of fiscal deterioration? And, equally important, what are the long-term structural challenges facing SNGs in sustainable financing of infrastructure and social services?