The Role of the Property Tax in Financing Rural Local Governments in Developing Countries

We argue in this paper that better rural local governments are needed to improve the lives of billions and that a good property tax is the key to improving rural local governments. Moreover, we suggest that only by giving local governments both the incentive and the ability to levy a property tax can effective rural local government and a meaningful rural property tax be achieved in most countries. Such a tax would often likely be a simple area-based levy, and the central government may not be too happy either with the way communities run the tax or how they spend the proceeds, but the critical role of the central government is to support and facilitate local action on this front, not to supplant it.