This paper explores the building blocks of an institutional framework to govern borrowing by subnational entities to finance infrastructure investment. The framework should help in achieving sustainable financing of development needs and sound management of fiscal risks. Based on international...

In 2009, Germany introduced a new debt rule in its federal constitution (Grundgesetz). The socalled ‘debt brake’ prescribes a balanced budget for both the federal level and the states. However, the states have leeway regarding transposition and specification of the national requirements into...