Vanishing Borders of Urban Local Finance Global Developments With Illustrations From Indian Federation Shyam Nath All Chapter

Vanishing Borders of Urban Local
Finance: Global Developments with

Illustrations from Indian Federation
Shyam Nath
Visit to download the full and correct content document:
https://ebookmass.com/product/vanishing-borders-of-urban-local-finance-global-devel
opments-with-illustrations-from-indian-federation-shyam-nath/
Vanishing Borders of
Urban Local Finance
Global Developments with
Illustrations from Indian
Federation
Shyam Nath · Yeti Nisha Madhoo
Vanishing Borders of Urban Local Finance
“Shyam Nath and Yeti Nisha Madhoo have given scholars of comparative fiscal
federalism a book we have been waiting for. They walk us through the still under-
studied development of Local public finance in India and link its development
to the norms laid down in the now substantial literature about fiscal decentral-
ization in western countries. For experts in the field, this well researched and
well written book is a must for checking your thinking. For younger scholars, it
is a wonderful place to start.”
—Roy W. Bahl, Jr. Regents Professor Emeritus, Georgia State University, USA,
and Professor Extraordinaries, University of Pretoria, South Africa
“This book is a profound, lucid, timely and easily accessible account of issues
related to Urban Local Finance in a rapidly globalising world. It has some very
insightful illustrations from India that makes it even more attractive as India—a
developing country, is experiencing very rapid urbanization and will face many
novel issues in this area in the future. I strongly recommend this book to
students, policymakers and urban planners.”
—Raghbendra Jha, Emeritus Professor of Economics, Australian National
University
Shyam Nath · Yeti Nisha Madhoo
Vanishing Borders
of Urban Local
Finance
Global Developments with Illustrations from Indian
Federation
Shyam Nath Yeti Nisha Madhoo
Amrita Center for Economics Amrita Center for Economics
and Governance and Governance
Amrita Vishwa Vidyapeetham Amrita Vishwa Vidyapeetham
University University
Kollam, Kerala, India Kollam, Kerala, India
ISBN 978-981-19-5299-9 ISBN 978-981-19-5300-2 (eBook)

https://doi.org/10.1007/978-981-19-5300-2
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer
Nature Singapore Pte Ltd. 2022
This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights
of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on
microfilms or in any other physical way, and transmission or information storage and
retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology
now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc.
in this publication does not imply, even in the absence of a specific statement, that such
names are exempt from the relevant protective laws and regulations and therefore free for
general use.
The publisher, the authors, and the editors are safe to assume that the advice and informa-
tion in this book are believed to be true and accurate at the date of publication. Neither
the publisher nor the authors or the editors give a warranty, expressed or implied, with
respect to the material contained herein or for any errors or omissions that may have been
made. The publisher remains neutral with regard to jurisdictional claims in published maps
and institutional affiliations.
This Palgrave Macmillan imprint is published by the registered company Springer Nature
Singapore Pte Ltd.
The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore
189721, Singapore
Dedicated to Her Holiness Mata Amritanandamayi Devi
Chancellor, Amrita Vishwa Vidyapeetham University
Foreword
Decentralized powers over the provision of local public services has

a long tradition, not only in India, but in countries throughout the
world. Those services are then expected to be financed through a combi-
nation of locally mobilized resources and intergovernmental transfers.
While there have always been challenges associated with this combination
of service delivery and resources available, this volume recognizes that
the issues are becoming much more challenging due to multiple forces
generally beyond the control or even influence of local decision-makers.
Globalization of economic activities can profoundly affect the level and
composition of services required at the local level and may also impact
the ability of local governments to mobilize revenues. However, the same
globalization forces can have adverse effects on the environment which
in turn lead to climate change and specific new needs at the local level,
particularly for coastal cities that are also centers of economic activity.
This volume is unique in its recognition of how these twin forces of
economic globalization and climate change are necessitating a broad-
ened perspective on urban local government finance particularly issues
pertaining to intergovernmental fiscal relations. After reviewing the basic
theories underlying local public goods, their financing, and the rudiments
of fiscal federalism, the challenges associated with economic globalization
are acknowledged and documented. Attention is then turned to a variety
of issues related to globalization including (1) how climate change as
well as policies intended to alter those changes have implications for local
vii
viii FOREWORD
governments and their fiscal conditions, (2) how water supply regimes are
affected, and (3) how local governments are influenced by policy initia-
tives of the central and state governments’ efforts to lower atmospheric
pollutions.
One particularly unique analysis herein is consideration of the links
between fiscal decentralization and efforts undertaken by private enter-
prises under the umbrella term “Corporate Social Responsibility (CSR)”.
The CSR activities that private firms undertake to lessen the impacts of
globalization and climate change can interact with decentralized spending
and revenue raising efforts.
The book contains a blend of conceptual, but theoretically based,
arguments along with empirical, quantitative analyses of observed govern-
mental behaviors. Prominent in the latter are analyses of how local
governments in India have responded to their states’ spending policies as
well as the potential for urban local governments to mobilize additional
revenues. While the volume is focused particularly on urban governments
in India, many of the lessons learned, policy implications drawn, and
approaches to empirical analyses are potentially transferable to other coun-
tries. One overriding fact is that urban governments everywhere are or will
soon be facing the same challenges of globalization and climate change.
Larry Schroeder
Professor Emeritus
Department of Public
Administration and International
Affairs, The Maxwell School
of Citizenship & Public Affairs
Syracuse University
Syracuse, USA
Acknowledgments
My foremost and sincere thanks are due to Indian Council of Social

Science research, New Delhi, for funding a two-year Senior Fellowship
to conduct research on the theme Globalization, Climate Change and
Urban Public Finance. The report prepared during the fellowship has
been instrumental in organizing ideas to bring together revised versions
of some of the chapters in a book form.
A tremendous encouragement from the Chancellor of Amrita Univer-
sity, Mata Amritanandamayi Devi, World Renowned Spiritual Saint
speeded up the momentum through her constant support to the research
center at the University.
In this process, our task was facilitated with the encouraging
comments on some chapters by Professor James Alm, Tulane Univer-
sity (New Orleans, Louisiana, USA), Professor Roy W. Bahl, Jr., Georgia
State University (Atlanta, USA), Professor Thomas Sterner, Univer-
sity of Gothenburg (Gothenburg, Sweden), Professor Raghbendra Jha,
Australian National University (Canberra, Australia), and Dr. Gautam
Naresh, formerly Senior Economist at National Institute of Public
Finance & Policy, New Delhi and currently a freelance consultant on local
financial management.
Grateful thanks are due to two anonymous referees appointed by
Palgrave Macmillan who approved the draft proposal and an anonymous
referee as a final reviewer.
ix
x ACKNOWLEDGMENTS
We acknowledge the support of Palgrave, particularly Sandeep Kaur

for her editor’s role and Sharon Janet and Ashwini Elango for screening
and monitoring the publication of this research-oriented output in a book
form.
Shyam Nath
Yeti Nisha Madhoo
Contents
1 Emerging Challenges in Urban Local Finance 1

2 Public Goods Provision and Local Fiscal Domain 29
3 Tenets of Fiscal Federalism and Decentralization 49
4 Economic Globalization and Local Public Finance 67
5 Corporate Social Expenditure and Fiscal
Decentralization: A Novel Framework 103
6 Global Climate Change and Local Fiscal Intervention 133
7 Overlapping Local Water Supply Regimes 177
8 Local Fiscal Effort in Response to State Expenditure:
Some Empirical Evidence 245
9 Environmental Federalism and Atmospheric
Pollution: Efficacy of Local vs State Expenditure 263
10 Local Tax Potential in an Urban Setting 297
11 Shaping Urban Public Finance 337
Index 359
xi
About the Authors
Shyam Nath is currently Director of Amrita Center for Economics &

Governance, Amrita University (Kerala, India) and formerly Professor
of Economics at University of Mauritius (Le Reduit, Mauritius) (1990–
2008). He holds Ph.D. in Economics from University of Rajasthan,
India and PDF in Metropolitan Finance from the Maxwell School, Syra-
cuse University (New York, USA). He worked as Senior Economist
and Fellow at the National Institute of Public Finance & Policy, New
Delhi (1976–90) and was a Senior Fellow of the Indian Council of
Social Science Research, New Delhi (2016–19). He has more than 40
years of teaching and research experience at university level in India and
abroad and 20 years of active participation in consultancy and research for
national and regional governments and international agencies (UNDP,
UNCDF, The World Bank, UNU/WIDER, USAID, UNRISD, ECA,
OECD, AERC, Commonwealth Secretariat). He has recently completed
a project (2021/22) for the World Observatory on Subnational Govern-
ment Finance and Investment (SNG-WOFI), a joint endeavor of OECD
and United Cities and Local Government (UCLG).
Yeti Nisha Madhoo is Professor and Co-Director at the Center for

Economics & Governance, Amrita University (India). She holds a Ph.D.
degree in Economics from University of Mauritius and was recipient
of the Commonwealth Scholarship. Dr. Madhoo did her post-doctoral
research in Development Economics at the University of California,
xiii
xiv ABOUT THE AUTHORS
Berkeley (USA) under Fulbright Scholarship. She has been attached to

the National University of Singapore, the University of Alberta (Canada)
and the University of East Anglia (UK). She co-edited two books, Saving
Small Island Developing States in 2010 (Commonwealth Secretariat), and
Shaping the Future of Small Islands recently in 2021 (Palgrave Macmillan,
Singapore). She also has worked as consultant to African Economic
Research Consortium (AERC, Kenya), United Nations Research Institute
for Social Development (UNRISD, Geneva, Switzerland), and Common-
wealth Secretariat (UK).
List of Figures
Fig. 1.1 Cities in relation to current climate-related hazards

(Source de Sherbinin et al. [2007]. Original source
data include: (i) for cities: CIESIN [2006], Global
Rural–Urban Mapping Project [GRUMP], alpha
version [available from http://sedac.ciesin.columbia.
edu/gpw/); (ii) for hazards: Dilley et al. [2005]. Note
The urban areas included in this figure have populations
greater than one million. The hazard risk represents
a cumulative score based on risk of cyclones, flooding,
landslides, and drought. “0” denotes “low risk” and “10”
denotes “high risk”]) 16
Fig. 3.1 A bargaining model of local expenditure determination 55
Fig. 4.1 Explosive growth of globalization (Source Taken
from PIIE [2021] https://www.piie.com/microsites/glo
balization/what-is-globalization) 71
Fig. 4.2 Scale of urbanization and income per capita of Indian
states (years 1991, 2011) (Source Computed from Census
data, GoI NSDPpc: Net state domestic product per capita
[constant]) 74
Fig. 5.1 (a) Absolute CSR performance vs. profit, (b) Normalized
CSR performance vs. profit (Source Computed using data
from Partners In Change [2013], Annexure Table 1,
pp. 12–14) 119
Fig. 5.2 Regional CSR footprint (Source Authors’ postulation) 128
xv
xvi LIST OF FIGURES
Fig. 6.1 Evolution of global population and global carbon

dioxide emissions (Source World Climate Report [2008]
Population data are from the U.S. Census Bureau,
and CO2 emissions data are from the Carbon Dioxide
Information Analysis Center [CDIAC]) 140
Fig. 9.1 SO2 emissions in Indian mega-cities (annual average,
µg/m3 ) 273
Fig. 9.2 NO2 emissions in Indian mega-cities (annual average,
µg/m3 ) 273
Fig. 9.3 SPM (PM10 ) emissions in Indian mega-cities (annual
average, µg/m3 ) (Source Authors using data from CSO
[2017] on average annual concentration of emissions
in µg/m3 [µg/m3 : microgram per cubic meter];
NAAQS set by the CPCB Notification of November
2009 is annual mean of 50 µg/m3 for SO2 , 40
µg/m3 for NO2 , 60 µg/m3 for PM10 for Residential/
industrial/other areas [https://scclmines.com/env/
DOCS/NAAQS-2009.pdf]. WHO 2005 air quality
guidelines set annual mean standard of 40 µg/m3
for NO2 , 20 µg/m3 for PM10 ; and 24-hour mean of 20
µg/m3 for SO2 [WHO, 2006]) 274
Fig. 9.4 Decentralization regimes across uniform vs. heterogenous
provision (Source Authors’ postulations *Average
of municipal expenditure; **Grant financed municipal
expenditure) 281
Fig. 10.1 Night-time light density for India in 2016 (Source
https://www.nasa.gov/feature/goddard/2017/new-
night-lights-maps-open-up-possible-real-time-applications
[Accessed 20 Jan 2022]) 327
Fig. 10.2 Nightime luminosty Map of India, 2021 (Source Ministry
of Finance [2022], p. 391 [obtained from NASA]) 328
List of Tables
Table 1.1 Classification of local government authorities 21

Table 2.1 Taxonomy of local government functions 39
Table 4.1 Trends in urbanization in states and union territories
of India, 1991–2011 73
Table 4.2 Theoretical mechanisms that relate globalization
and decentralization 77
Table 4.3 Key ratios for municipal revenue 81
Table 4.4 Municipal corporations that have raised money via bonds 87
Table 5.1 Industry-wise segregation of major CSR activities (%):
2012–2013 110
Table 5.2 Development sectors CSR spending (% of total), FY
2014/2015–FY 2020/2021 115
Table 5.3 Share of local area spending under CSR 124
Table 5.4 Geographical distribution of CSR expenditure according
to states/UTs (% of total), 2015–2020 125
Table 5.5 Actual CSR expenditure vis-a-vis Prescribed CSR
expenditure 126
Table 7.1 Comparative world picture of India’s performance
in terms of SDG 6 goals (year 2020) 180
Table 7.2 Access to water (Percentage based on weighted
population, year 2020) 183
Table 7.3 Inequalities in water provision across income quintiles,
2006–2016 188
Table 7.4 Institutional provision of water by spatial jurisdiction 203
Table 7.5 Privatization of the water and sewerage sector in India 210
xvii
xviii LIST OF TABLES
Table 7.6 Domestic volumetric water prices in selected Indian

cities 220
Table 7.7 Non-domestic volumetric water charges in selected
cities 225
Table 7.8 O&M coverage and other performance indicators
of water utilities 230
Table 8.1 Delhi municipal fiscal indicators 247
Table 8.2 Grants-in-aid—Quantum and share in the divisible pool 253
Table 8.3 Regression results (Mumbai) 258
Table 8.4 Pooled results (Mumbai and Delhi) 259
Table 9.1 Nature, probable sources, and range of impact of SO2 ,
NO2 and SPM 270
Table 9.2 Source apportionment of air pollutants in Mumbai city
(2010) 276
Table 9.3 Summary of results on effectiveness of expenditure
measures 283
Table 9.4 Pooled OLS results: Local vs. state expenditure—SO2 ,
NO2 , and SPM emissions control 288
Table 9.5 SURE results on pollution control: Local vs. state
expenditure (Dependent variables: SO2 , NO2 , and SPM
emissions) 290
Table 9.6 Robustness test: IV results—SO2 , NO2 , and SPM
emissions control 292
Table 10.1 Revenue impact of residential price revisions (Mauritius) 304
Table 10.2 User fees as percentage of GDP (1995–2020): OECD
countries 306
Table 10.3 Municipal revenue per capita for the 6 largest municipal
corporations: 2017–2018 (in rupees) 308
Table 10.4 Budgeted total revenue by source and municipality
type: South Africa 309
Table 10.5 Municipal revenue effort and potential in Mozambique
(2009) 310
Table 10.6 Colonies in different categories—MVC-III (2002) 320
CHAPTER 1
Emerging Challenges in Urban Local

Finance
1.1 Genesis
Local governments occupy an important place in public service delivery,
local economic and social development efforts, and environmental gover-
nance. The list of local goods and services in urban areas includes
street lighting, primary health, elementary schooling, sanitation, garbage
disposal, water and electricity supply, and traffic control. The theory
of fiscal federalism and the principle of subsidiarity posit that local
governments are more suited for the supply of local services in a local
jurisdiction. This contention stems from the federalism premise that the
benefit area of local operations generally coincides with the geograph-
ical limits of localities over which these authorities have informational
advantage about the citizen-voter preferences. Moreover, the subsidiarity
principle posits that a central authority should have a subsidiary func-
tion, performing only those tasks which cannot be performed at a more
local level. In other words, subsidiary level should be given the first pref-
erence over the whole for local functions. The theoretical grounding of
local government operations stemming from the subsidiarity principle has
however not manifested in local budgets and service delivery.
While the role of these subnational governments is rapidly expanding,
supported by theory and practice, availability of funds required to perform
the requisite duties is often inadequate in developing countries like India.
The principal reasons are slow-paced own revenue mobilization and
© The Author(s), under exclusive license to Springer Nature 1

Singapore Pte Ltd. 2022
S. Nath and Y. N. Madhoo, Vanishing Borders of Urban Local Finance,
https://doi.org/10.1007/978-981-19-5300-2_1
2 S. NATH AND Y. N. MADHOO
lack of fiscal autonomy in raising resources and undertaking expendi-

ture programs. This scenario of constrained finance channels does not
support sustainable service performance and local development needs.
Nevertheless, where economic and political theories indicate decentral-
izing trend, data emanating from intergovernmental fiscal operations
show greater centralization of funds when it comes to financing devel-
opment of urban areas and major cities. Thus, the neat descriptions of
multi-level government and finance may be rendered mere normative
postulations of real-world situations.
It is pertinent to note that globalization-induced changes in urban
local finances, with emphasis on cost recovery and mobilizing of own
resources to reduce grant dependence have not gone too far. Besides
grant financing, fiscal channels such as piggybacking of charges and
earmarking of expenditure have eroded the local fiscal autonomy. Simi-
larly, episodes of privatization of local public services, the creation of
autonomous parastatal boards, and the emergence of off-budget activities
in metropolitan cities have further reduced the fiscal operations of urban
local bodies (ULBs). Metropolitan nature of urban centers attracts funds
from different levels of government, private investors, and international
agencies.
User charges, market fees, and local property tax levied by ULBs
have not shown any remarkable upward trend over the years, indicating
large unused potential of own revenue base. Moreover, the hard budget
constraint in which local bodies are required to balance their budgets
introduces lack of incentive to raise more resources locally and spend
more on basic local services. What is vital is that the financial opera-
tions of local governments seem close to private finance in the sense that
available resources determine the pattern of spending and not vice versa.
This approach of fiscal management stands in contrast to the corner-
stone of public finance of higher-level governments, which would entail
that the design of local expenditure plans is followed by looking for
financial resources to meet the expenditure needs (Dalton, 1971). The
upshot is that there is a need to change the pattern of local government
budgets giving importance to both revenues and expenditures, necessi-
tating proactive local resource mobilization in response to fast-expanding
needs of population, industry, and business in local jurisdictions. We now
turn to discuss in the next section the evolution of extremely conservative
policies underlying the creation of local government structure in India.
1 EMERGING CHALLENGES IN URBAN LOCAL FINANCE 3
1.2 Sluggish Origin of Local

Finance Institutions in India
The Constitution of India 1950 has made detailed provisions for ensuring
democratic traditions in Parliament and in the state legislatures. The
implicit and explicit demand for decentralized governance in a vibrant
democracy like India however has manifested in the Constitution of India,
albeit slowly. This is despite that municipal bodies however have a long
history in India, even before Independence in 1947. The first such Munic-
ipal Corporation was set up in the former Presidency Town of Madras in
1688 and was followed by similar corporations in the then Bombay and
Calcutta in 1726. However, the Constitution did not make the local self-
government in urban areas a clear-cut constitutional obligation. While the
Directive Principles of State Policy refer to village Panchayats, there is no
specific reference to Municipalities except implicitly in Entry 5 of the State
List, which places the subject of local self-governments as a responsibility
of the states.
The Indian democratic tradition starts and finishes by creating a
plethora of institutions even at the local level with elaborate elections and
wide statutory powers. This however is not supported by adequate finan-
cial resources. In his presidential address to the Provincial Local Bodies
Conference at Surat in 1935, the (Honourable) Sardar Vallabhbhai Patel
(who was Chairman of the Ahmedabad Municipality) said, “… that the
franchise of the electorate has been enlarged and the local bodies have
been given very wide powers. True, I accept it. But what good would
come out of it unless and until the question of local finances is settled
first. The extension of franchise and widening the scope of duties would
be like dressing a dead woman”.
The Local Finance Enquiry Committee 1951, the Taxation Enquiry
Commission 1953, the Indirect Taxation Enquiry Committee 1976,
and several commissions and committees during the last 70 years have
discussed municipal finances at the periphery. National Finance Commis-
sions have concentrated on central-state fiscal relations and have dealt
with municipal finance through state government only indirectly. State
Finance Commissions and Municipal Finance Commissions in very few
states have examined the dismal state of municipal finances without
however giving a big push to revitalizing the local fiscal assignments on
both revenue and expenditure fronts. Rather they have given exclusively
more importance to grants-in-aid through state budgetary channels. What
is vital is that empowerment of the municipal bodies through the consti-

tutional amendments, which would entail far-reaching consequences for
the assignment of revenue and expenditure responsibilities at the local
level, has not been much on the political agenda.
Financially empowering municipal bodies has always met with reluc-
tance. The Taxation Enquiry Commission 1953–1954 did not favor an
alternative constitutional list of local taxes on the pattern of the Union
and State lists. It chose to appear to the states to observe a gentle-
man’s agreement not to poach upon the enumerated local tax zone. The
Commission did not consider that a constitutional amendment was called
for. Their recommendation to the state governments was limited to some
indicative restrictions: “we very strongly recommend to the state govern-
ments that the taxes which we indicate should be allowed to be developed
only by the local bodies or for them, and that, where the state govern-
ments are at present exploiting any of these taxes for appropriation to
state revenues, they should gradually withdraw from the field, and mean-
while allot the proceeds from the taxes to the local bodies concerned. The
demand for a separate list of local taxes to be enshrined in the constitution
may not succeed in fulfilling all the hopes and expectations of its protag-
onists. Taxes that are placed at the disposal of an urban local government
must be elastic in nature to cope with its functions which are continu-
ously on the increases. It may, thus, seem that a mere incorporation in
the constitution of a separate list of local taxes does not offer solution to
the desperate financial position in which the local government in India
today find themselves.”
1.3 Absence of Targeted Local Fiscal Reforms

The Constitution of India at independence recognized the Center
and states as two layers of government with clearly separated juris-
dictions and responsibilities. Local governments (municipal bodies and
village panchayats) functioned within the state governance without much
autonomy. A breakthrough occurred when a third layer of govern-
ment was added through two constitutional amendments in 1992, which
resulted in the legal creation and recognition of municipal governments
in urban areas and village panchayats in rural areas. Box 1.1 summarizes
the main provisions of the constitutional amendments pertaining to urban
local bodies. These developments however have not been instrumental in
revitalizing the local government finance as a third layer. Inelastic taxes
and charges such as property tax in urban local bodies and grants-in-aid
continued to be the mainstay of local finance.
Box 1.1: The Constitution (74th Amendment) Act, 1992: Urban

Local Bodies
The Constitution (Seventy Forth Amendment) Act, 1992 has introduced
a new part of the Constitution—Part IXA—that addresses issues related
to municipalities. Major provisions provided by the above Act are given
below:
(a) Constitution of Municipalities—As per the Act, three types of
municipalities can be established depending upon size and area: “(i)
Nagar Panchayat for an area in transition from rural to urban area;
(ii) Municipal Council for smaller urban area; and (iii) Municipal
Corporation for larger urban area”.
As demographic and other determining conditions for consti-
tuting a particular type of municipality vary widely across States, it
is “left to the State Legislatures to decide which specific type of
municipality will be constituted for particular urban area”.
(b) Powers and Functions of the Municipalities—All municipalities
would be vested with powers and responsibilities enabling them
to operate as effective institutions of self-government. “The State
Legislature may, by law, specify what powers and responsibilities
would be given to the municipalities in respect of preparation of
plans for economic development and social justice and for imple-
mentation of schemes as may be entrusted to them. An illustrative
list of functions that may be entrusted to the municipalities has
been incorporated as the Twelfth Schedule of the Constitution”.
(c) Finances of Municipalities—“It has been left to the Legislature of a
State to specify by law matters relating to imposition of taxes. Such
law may specify:
• Taxes, duties, fees, etc. which could be levied and collected
by the Municipalities, as per the procedure to be laid down in
the State law.
• Taxes, duties, fees, etc. which would be levied and collected
by the State Government and a share passed on to the
Municipalities.
• Grant-in-aid that would be given to the Municipalities from
the State”.
(d) Finance Commission—“The Finance Commission constituted

under Article 243-I to review the financial positions of Panchayati
Raj Institutions shall also review the financial position of the munic-
ipalities and will make recommendations to the Governor”. The
Finance Commission recommendations will encompass:
• “Distribution between the State Government and Municipal-
ities of the net proceeds of the taxes, duties, tolls and fees
leviable by the State.
• Allocation of share of such proceeds between the Municipali-
ties at all levels in the State.
• Determination of taxes, duties, tolls and fees to be assigned
or appropriated by the Municipalities.
• Grants-in-aid to Municipalities from the Consolidated Fund
of the State.
• Measures needed to improve the financial position of the
Municipalities”.
Ministry of Finance, Government of India Circulars.
Extracts from: https://nnvns.org.in:449/nnvns/attachments/article/
219/74th_Amendment.pdf.
An important study by Mohanty et al. (2007) was undertaken in the

background of the assignment of important responsibilities to the urban
local bodies under the Constitution (74th Amendment) Act 1992. The
authors found that out of 18 functions to be performed by the munic-
ipal bodies in India, less than half have a corresponding source of own
resources. Overall, there was a mismatch between functions and finances
of urban local bodies, which primarily explains the vertical fiscal imbal-
ance (centralization of public revenues) and lack of statutory intention for
adequate devolution. On the ground, the lowest tier is both structurally
and financially weak, and in some ways dysfunctional. Reform attempts
have not yielded desired results due to implicit centralization of power
and resources at higher levels of government that has marked the paucity
of financial and human resource capability at the local level. Examples of
some ailing local levies are portrayed in Box 1.2.
Box 1.2: Struggling Municipal Taxes

In India, two major types of taxes levied by municipal corporations
(MCs)/urban local bodies (ULBs) are the Property tax and the Profes-
sional tax. Property tax is an annual amount paid by a landowner to the
MC of his/her area. Property encompasses all tangible real estate prop-
erty, e.g., own house of residence and property rented. The municipal
corporation undertakes assessment of such assets and imposes the prop-
erty tax annually or semi-annually. The amount is generally linked to area,
construction, or property size. It may also comprise street lighting tax,
unmetered water tax and drainage tax. Property tax is the most impor-
tant tax levied by ULBs in India, constituting the highest source of own
revenue. The greatest hurdle in the buoyancy of this tax is proper assess-
ment of property value. While rental value and use methods are most
common, such assessments are challenged in the court of law delaying the
determination of tax liability.
Professional tax is levied by state governments or municipalities under
Article 276 of the Constitution, which provides for levy of tax on trade,
profession, and employment. The Constitution has fixed a ceiling of Rs.
2500 per taxpayer per year. For some cities like Chennai, Hyderabad, and
Surat, the professional tax is the important source of income after property
tax (https://www.gktoday.in/topic/municipal-taxes-in-india/). It is like a
local income tax with very narrow and static tax base.
“Octroi, a metaphor of the Union customs duty on imports in the
local context, has a turbulent history in the arena of public finance” (Rath,
2009). In the past, this tax has been abolished and reinstated several times
in different parts of the world. However, a worldwide phenomenon has
been the progressive phasing out of the tax due to its very regressive and
distortionary nature. The existence of the tax can be viewed as paradoxical.
On the plus side, it has been a lucrative source of revenue that promoted
fiscal autonomy to the local bodies in the era of decentralized governance.
On the downside, however, it is considered a misfit in the globalized world
order as its revenue productivity stems from erecting customs walls around
cities and towns. Whatever may have been the set of factors instrumental
in its removal, such transition has implied fiscal duress for the concerned
government.
The introduction of Goods and Service Tax (GST) in 2017, for

instance, supposed to be a gigantic fiscal reform in indirect tax system
in India does not address the local finance issue adequately and statu-
torily distributes tax collections only between Center and states. This is
despite that during this reform, some of the high performing local taxes
in terms of collections such as entertainment tax, entry tax, and tax on
advertisements have been submerged in GST and octroi, the most lucra-
tive source of revenue for some municipal corporation has been abolished.
Local property tax remains the major local tax with all its limitations due
to political interference in fixing rates and legal hurdles challenging the
valuation of property. Thus, financial empowerment of local government
to respond to the fast-growing demand for urban local public goods and
services seems to have taken a back seat. Moreover, there is a noticeable
change in practice as local revenue sources and expenditure responsibil-
ities have been encroached by other institutions. These include higher
levels of government, and parallel developments within the public sector
and private sector involvement in delivery of local public goods and
services. Interestingly, central and state governments have played a proac-
tive urban expenditure role at a cost, that is, crowding-out of local- and
community-level governments (Box 1.3).
Box 1.3: The Jawaharlal Nehru Urban Renewal Mission (JNNURM)

The JNNURM was launched in 2005, under the leadership of the
Ministry of Urban Development, as the largest nationwide scheme for
urban infrastructure development and service delivery in India. It was
designed to improve both infrastructure and urban governance and
included a special component for provision of basic services to the urban
poor (https://mohua.gov.in/upload/uploadfiles/files/1Mission%20Over
view%20English(1).pdf). The JNNURM required the urban local bodies
to prepare a city development plan and agree to certain mandatory
reforms in urban governance as a grant condition. The mandatory munic-
ipal reforms included adopting accrual-based double entry system of
accounting, using geographic information systems (GIS) for e-governance
and property tax reform, and recovering operations and maintenance
expenditures through user charges. The nodal agency for the reform
program was appointed by the state government, and the program was
financed by a federal grant with Matching grants from the state and urban
local bodies. Post 2014, the JNNURM mission was replaced with the Atal
Mission for Rejuvenation and Urban Transformation (AMRUT) and the
Smart Cities Mission (SCM) (Sadoway et al., 2018).
1.4 Self Reliant vs. Borderless

Local Fiscal Jurisdictions
Local jurisdictions can be described as geographical areas, which are
contiguous to each other but are separated for functional responsibilities.
The fiscal operations of each jurisdiction are assigned to a governmental
unit in a federal system of different layers of governance. The provision
of local public services is a major function of local governments within
the local jurisdiction. The preceding picture of the fiscal functioning of
local governments in a developing country like India does not conform
to the conditions of the self-reliant local jurisdictions because of explicit
dependence on intergovernmental grants. These localities are apparently
very different from what we obtain in the Tiebout (1956) world and the
British community charge and council tax.
In the Tiebout (1956) model, citizen-taxpayers with similar preference
for a given package of tax charge and bundle of services migrate and
locate in a jurisdiction matching their preferences, akin to a shopping
analogue. In this framework, an individual’s strength of taste for some
bundle of publicly provided goods is revealed through his/her residen-
tial choice. For example, people having strong preference for the public
good primary education would select to locate in a jurisdiction with high
level of spending on primary education. Such mechanism described as
“voting with their feet” allows people “to sort themselves out into groups
of like tastes” by simply and silently entering and exiting communities
(Mueller, 2003). Key assumptions of the Tiebout model are that people
have differing tastes for publicly provided goods and are fully mobile.
The benefit of local government provision arises as cities and towns are
more numerous than counties or provinces. Thus, people would find it
less costly to move among cities and towns than counties or provinces to
select their residence. Additionally, as Tiebout (1956) argues, the “greater
the number of communities and the greater the variance among them, the
closer the consumer will come to fully realizing his preference position”.
Active entrepreneurial role of local governments is presumably implied
as Tiebout employs the term “city managers” rather than mayors for the
local polities’ leadership (Mueller, 2003). It is also explicitly clear that in
this scenario, the role of intergovernmental grants is zero.
In the community charge model, which has been experimented in
the UK in the late 1970s, preference revelation process for a locality is
very different from that of Tiebout. Economically active community resi-

dents agree to share the total budget of a locality that is voted to be
spent to provide services within its jurisdiction. What is striking however
is that local governance of communities does not entail intergovern-
mental fiscal transfers because fiscal capacity of a community seemingly
coincides with its expenditure needs. Such a model therefore describes
self-reliant jurisdictions, which work like entities concerned with efficient
provision of goods and service to achieve efficient allocation of resources
in terms of citizen-voter preferences. We refer to these localities as having
well-defined borders on the grounds of resources and responsibility.
This contrasts with common local government models that typically
depict fiscal interdependence between central and subnational govern-
ments. A close look at them indicates that local jurisdictions are rendered
borderless in terms of their budgetary operations. The borderless fiscal
jurisdictions can take two forms, depending on the channels of spillover of
benefits emanating from the revenue side as well as the expenditure side.
Horizontal spillover/externality happens on the expenditure side when
the benefit of a local service provided in a locality tends to spillover to
adjoining localities and the service-providing localities become entitled to
receive compensation in the form of grants from upper-level government.
The process will also include the compensation from those beneficiaries
who are international. Importantly, the reverse will be true when costs are
being shifted to citizens of other localities within the country and outside.
The case for compensation from international beneficiaries would emerge
when industry and business cross national boundaries and multinational
companies chose locations in metropolitan cities. These compensations
would constitute the grants to be shared with service-providing locality.
On the other hand, vertical spillover would happen when the fiscal
authority of a local government is taken over by higher-level governments
to internalize the benefits, explicitly or implicitly. This we can alternatively
call the fungibility of subnational fiscal authority that displaces subnational
fiscal authority. In this case, fiscal transfers would take place from higher
to lower-level government at the expense of local fiscal autonomy.
It is interesting to note that these fiscal transfers are attempts to
restore the fiscal share of respective jurisdictions. But since these trans-
fers are never automatic, they may yield fiscal imbalance necessitating
further devolutions. Compensation attempts may entail efficiency and
equity implications between jurisdictions. One point however is evident
that the institution of fiscal transfers can serve two purposes. First, differ-
ences in fiscal transfers can be used as an indicator of inter-locality service
differences, Two, grants can be used as an indicator of borderless juris-
dictions that would amount to vanishing borders of local budgets. It can
be postulated that the extent of the vanishing borders can be measured
by the differential growth rates of own revenues of local government
and grants from higher governments. It is further noted that the extent
of vertical spillover between local and central government will be much
lower than that between local and provincial government.
Higher and lower amount of grants would depend on differences
in willingness to tax and spend by different local jurisdictions. Grant
amounts would also depend on whether local governments perceive
grants as an income supplement and whether there are special factors
influencing expenditure decisions such as scale of urbanization, climate
risks, and fiscal behavior of local governments in the form of fiscal indis-
cipline and bailouts. These issues present a very complicated scenario for
countries like India with population surge, urbanization, environmental
vulnerabilities, and political economy considerations.
1.5 Vanishing Borders of Urban

Local Finance: The Channels in India
The channels of vanishing borders of urban local finance would be
instructive to identify and analyze, particularly in Indian urban local fiscal
system. These channels can be classified into statutory, efficiency, polit-
ical, and global considerations. Firstly, there are three tiers of governance,
namely the central, state, and local levels, where the latter is designed to
work under the supervision of the state government. While the list of local
functions is specified, local government in most cases would have to seek
approval of the state government, especially in matters of raising addi-
tional resources. Usually, approval is not spontaneous and fiscal growth
of local bodies is constrained, entailing rising dependence on grants-in-
aid. This shows existence of some competition between state and local
governments resulting in erosion in borders of fiscal responsibility.
The supremacy of state overseeing operations of local governance and
thereby enhanced dependence on grants have been empirically analyzed
using a cartel model of intergovernmental interaction in resource mobi-
lization. From the findings in Chapter 8 of this book, it is evident that
local governments have not shown any retaliation when state govern-
ments have expanded their expenditure at the expense of grant to local
bodies. In fact, local expenditures have reacted positively to grants. This
result is in great contrast when a similar empirical analysis was conducted
using central and state government data (see Nath, 2012). State govern-
ments have been found exhibiting retaliation by raising more resources
at the state level during the periods of rapid growth in central expen-
ditures. These tendencies support the view that fiscal boundaries of local
governments have eroded, confirming a situation analogous to the flypaper
effect of grants 1 and the fungibility of local fiscal authority. In case of the
former, local expenditures have tended to be financed more from grants
than from local governments’ own revenues. As regards fungible fiscal
authority, resource raising responsibility has tended to be shifted from
local to state government, which is not the intention of the statute. The
sluggish growth of local taxes and user charges support this trend in most
cases.
Secondly, besides fiscal handicaps, local bodies are technologically less
developed to meet the challenges of spurt in demand for local services
due to population growth and expansion in economic activities. This
has resulted in a shift of certain functions from local- to state-level
autonomous boards, typically on the ground of efficiency in performance.
Such developments are more visible in water supply and sewerage disposal
activity, and urban housing in India. Blewett (1984) argues that lower
fiscal illusion and greater accountability is attained “by separating the
functions of government and their sources of revenue. This is done by
placing general government expenditures ‘off budget’ and on to sepa-
rate special purpose budget. In effect, the proliferation of governmental
units allows for the earmarking of revenues”. Decentralization in terms
of functions has further gathered support on the grounds of economies
of scale and cost recovery. While functional decentralization has allowed
for more rational functioning in a democratic country like India, it has
occurred at the expense of fiscal decentralization where empowerment of
local governments is in focus.
Thirdly, political motivations are varied and may not originate from
efficiency and equity considerations. Off-budget activities that purely arise
from political concerns allow some local functions to be performed sepa-
rately. For instance, when conducting off-budget sales of publicly owned
assets like land to finance operating budgets. Another example is the
setting up of a special purpose vehicle (SPV) by the government to
borrow money for a particular infrastructural project in a locality, e.g.,

a link road construction. Since borrowing is not done directly by the
local body, it is not reflected in the budget document and fiscal deficit.
What is important to note here is that government often acts as guarantor
for these loans. Such practices erode the domain and fiscal responsi-
bility of local government and tend to conceal the actual extent of local
government expenditure.
Fourthly, it has been observed that in big metropolitan cities, central
and state governments participate in globalization-induced local develop-
ment projects in which local government stakes are minimal. There may
be a few exceptions when the projects are internationally funded with
some conditionality attached that local participation is mandatory. More
often, in the presence of multiplicity of government and private agencies
in local jurisdictions, local governments may act at the periphery.
Lastly, climate change-related expenditure activities have implications
for important adjustments in local government budgets. The respon-
sibility for mitigating atmospheric pollution, for example, cannot be
delegated to a local government because the spread of pollution tran-
scends local boundaries. In Chapter 9, an empirical analysis is conducted
with data on Delhi and Mumbai municipal corporations and respective
state governments to measure the efficacy of local vs. state intervention in
controlling emissions of selected air pollutants. The role of state govern-
ment and consolidation of local governments seem to be generally more
effective than individual local governments.
1.6 Focus on Global Interlinkages

This book proposes to examine the emerging trends in urban government
finance along with consequences of globalization and climate change
for the local government budgets. Globalization, climate change, and
local governance are inter-linked principally in three ways. Firstly, glob-
alization of trade and business have resulted in localization of industrial
and commercial activities in urban areas. That is, the growth of interna-
tional trade and business and inflow of foreign direct investment (FDI)
would entail rapid rise in urban- and industry-level demand for local
goods and services. Secondly, free trade agreements are proliferating,
and multinational corporations move their operations to environmen-
tally rich developing countries. Export-oriented industrial agriculture has
replaced local farming. It promotes unnecessary long distance of trans-

portation of goods, rampant consumerism, energy intensive technology,
and rapid urbanization. All these activities increase the consumption of
fossil fuel, a major source of carbon emissions and environmental degra-
dation. Thirdly, with the globalization of production and business, it
has been observed that FDI have moved to urban destinations in devel-
oping countries, where environmental regulations are generally lax. These
developments indicate that local public finance issues may necessitate
consideration of implications on a wider scale.
It is also witnessed that globalization is heavily supported by govern-
ments through free trade deals, subsidies, and regulations that discrim-
inate against small and medium enterprises. It is visible that existing
policies encourage businesses across the board to use more energy
and technology, instead of employing more labor. Moreover, renewable
technologies currently receive as many subsidies as fossil fuels do (see
interview by Polychroniou & Rolle, 2018). Whether globalization is good
or bad for the environment has been examined intensively in recent
years. Pollution haven and “race to the bottom” hypotheses have been
empirically tested to confirm these assertions.
Bu et al. (2016), for instance, applying a new KOF globalization index
to a panel of 166 countries from 1990 to 2009, find that, “on average,
overall carbon emissions rise with higher levels of economic, social, and
political globalization, although the effect varies by OECD and non-
OECD country group”. Decomposition of the data in terms of key
contributors of carbon emissions further yields that the manufacturing
and construction sectors consistently display a pollution haven effect in
terms of climate change. It is important to note that while attempts
to reduce carbon dioxide emissions (decarbonization) internationally are
showing some positive results, growth in fossil fuel use is still outpacing
the rise in low-carbon sources, including renewable energy (Jackson et al.,
2018). Some hidden agenda may exist, frustrating plans to further reduce
CO2 emissions.
Now that the geographical area of pollution or climate change effects
may not coincide with the local government jurisdiction, this has raised
an important institutional debate in the environmental fiscal federalism
literature regarding which layer of government is more suited for environ-
mental governance. While climate change (global warming) is a profound
national and global issue in all its manifestations and components, it has
deep local connotations as well. While both on information and technical
capability grounds, central management of environmental quality may

seem to be a preferred alternative, greater role of local bodies is called for
to address more localized impacts. Urban centers of various sizes, particu-
larly cities, have key role in climate management since urban households,
industrial and commercial activities, and infrastructural sector that are
primary contributors of greenhouse gases (GHG) fall within local govern-
ment jurisdictions. It is estimated that cities globally account for nearly
two-thirds of energy consumption and 70% of GHG emissions (World
Bank, 2020). Moreover, urban areas’ exposure to climate and disaster
risks such as floods and heatwaves is exacerbated due to high concentra-
tion of population, economic activities, and built environment. Climate
change is expected to aggravate the scenario. Strikingly, many urban
centers have developed in the very places prone to adverse climate change
events (e.g., low-lying coasts). It is a matter of concern that in developing
countries, about 90% of urban expansion “is near hazard-prone areas and
built through informal and unplanned settlements” (World Bank, 2020).
Moreover, Fig. 1.1 illustrates that high-risk cities are mostly located in
developing regions such as India, with a high population density.
Over and above the heightened risks posed by climate change on
urban centers, the latter will also face greater human, technical, and finan-
cial challenges (costs) of alleviating these climate-induced vulnerabilities.
Importantly, as hubs of development, “urban centers have, will, and must
become sources of innovations and policy responses to reduce greenhouse
gas emissions and adapt to the impacts of climate change. The combi-
nation of increased vulnerabilities and increased opportunities brought
to urban areas by climate change can incubate important synergies and
resources for creating innovative adaptation and mitigation strategies”
(Romero-Lankao & Dodman, 2011).
What is instructive at this stage is that the fiscal responsibilities of
local government have witnessed phenomenal surge due to globaliza-
tion and climate change and it is not limited to providing local public
goods and services (popularly known as municipal services) only. Glob-
alization and population concentration in cities and medium-sized towns
have expanded the local governance responsibility on other fronts as well.
This further explains how globalization and climate change have engen-
dered forces that contribute to the erosion of the theoretical boundary
of urban governments and reducing the watertight status of urban local
finance. These developments create pressing conditions to streamline
16
S. NATH AND Y. N. MADHOO
Fig. 1.1 Cities in relation to current climate-related hazards (Source de Sherbinin et al. [2007]. Original source data
include: (i) for cities: CIESIN [2006], Global Rural–Urban Mapping Project [GRUMP], alpha version [available from
http://sedac.ciesin.columbia.edu/gpw/); (ii) for hazards: Dilley et al. [2005]. Note The urban areas included in this
figure have populations greater than one million. The hazard risk represents a cumulative score based on risk of cyclones,
flooding, landslides, and drought. “0” denotes “low risk” and “10” denotes “high risk”])
local fiscal operations both in terms of expanded responsibilities and

new opportunities provided by global developments to reinvent local
governments.
1.7 Ingredients of Local Fiscal Design

It is contented that the expansionary effects of globalization and climate
change on local budgets would have far-reaching consequences for urban
public service delivery, sustainable development of urban areas and cities,
and decentralized urban governance. There can be various ways by which
additional functions and additional resources can be aligned utilizing
intergovernmental grants, share in taxes, and assignment of additional
revenue bases. Moreover, transfers emanating from these channels would
stimulate or dampen the local fiscal effort to meet the challenges of addi-
tional responsibilities. While the municipal finance trends are disturbing,
globalization and climate change have significantly shifted the opera-
tional areas of urban public services upward. These developments have
offered new opportunities for local institutional growth and created a
need to revisit their expenditure and revenue mechanisms with a view
to developing urban local government as financially viable units.
While trade openness (and globalization) is expected to increase the
size of central and state government budgets, it should reflect at the
subnational levels as well (Alesina & Wacziarg, 1998; Garrett & Rodden,
2003; Persson & Tabellini, 1996; Rodrik, 1998). While intergovern-
mental fiscal transfers of block and matching nature would strengthen
local revenue base, it may also persuade local governments to raise
their own revenues to meet their expanded responsibilities. Technically
speaking, these fiscal transfers may give rise to expenditure stimulation by
raising additional resources. In other words, local government response to
additional fiscal responsibilities may generate expansionary effect on local
revenue and expenditure and on the delivery of urban public services.
The response of local governments however may not follow any uniform
pattern, giving rise to disparities in service provision across jurisdictions.
As a first approximation, disparities in local government expendi-
ture would inform about local service differential having implications
for quality of life in different localities. The capability of local jurisdic-
tions in fulfilling their role of service provider depends upon financial
resources available in relation to expenditure needs. The extent of the
gap between fiscal capability and expenditure needs between jurisdictions
can vary due to a host of economic, social, and political factors. In a

federal system like India, besides revenue generated from own sources,
local government performance greatly depends upon policies on fiscal
transfers from central and state governments in the form of grants and
shares in taxes. Now, there are three important factors that will deter-
mine the fiscal performance of local governments, namely fiscal capacity,
fiscal transfers, and expenditure need. Given fiscal capacity and expen-
diture need, intergovernmental fiscal transfers may be taken to indicate
differences in geographic fiscal capacities and spread of benefits of locally
supplied public goods.
As highlighted, differences in fiscal transfers can lead to major socio-
spatial inequities in levels of public service provision and in quality of
life for residents of different jurisdictions. Gyourko and Tracy (1991)
show that intercity fiscal differentials are nearly as important as amenity
differentials in determining the quality of life across urban areas. The
authors estimate a random effects model to account for city-specific error
components in the housing and wage regressions to capture the decisions
about residential and work locations. Gangopadhyay and Nath (2001)
approach the problem of deprivation and incidence of urban public
services by quantifying the extent of deprivation of different income
groups in relation to both desired and minimum levels. Three types
of deprivation are established. “First, deprivation in both Bombay and
Calcutta is higher than that of Delhi. Second, there is a serious concern
for primary health and education because it is established that the lack
of these local services is the major source of deprivation among urban
settlers”. Third, income-class disparity is demonstrated as the rich are
worst-off in Calcutta and best-off in Bombay. Middle-income and poor
citizens are best-off and worst-off in Delhi and Bombay, respectively.
What is important here is that the differentials may originate from fiscal
endowment divergences and, more importantly, from varying fiscal trans-
fers from higher-level governments and not necessarily from differences
in citizen-voters’ preferences.
The dependence on grants from higher level of governments however
is one of the important ingredients of fiscal federalism but exces-
sive dependence on grants may render further weakening of the local
finance. The implications of soft budget and “bailout” are severe for
macroeconomic management. It is important to mention a few possible
risks that may be destabilizing. First, local governments may develop
a tendency to spend more out of grants than out of own revenue.
As mentioned earlier, this effect, known as the flypaper effect of grants

in the fiscal literature, would adversely impact the autonomy of local
governments. Second, the “aid” and “natural resource” curses illustrate
what happens when countries rely on non-tax sources of government
revenues: economic and institutional development are stunted (Easterly,
2003; Sala-i-Martin & Subramanian, 2013). Excessive flow of grants with
indiscriminate spending and expansionary effects would have the potential
of destabilization and unwarranted consequences for both local govern-
ment and national economy. This phenomenon is known as the Dutch
Disease in the development literature.
Third, specific-purpose grants may be diverted to non-targeted heads,
which is termed as the fungibility of grants . It may be pertinent to argue
that share in taxes should be given more importance than grants. Never-
theless, it is important to note that tax collections at higher governmental
levels are not adequately transferred to local governments. Bahl and Nath
(1986) analyze such transfers from tax collections and conclude that
money sticks where it is collected or received (italics added). Thus, design
of intergovernmental fiscal adjustment to support adequate financing
of operations of city governments may prove to be policy and prac-
tice challenges of different episodes of globalization and decentralization
regimes.
What is instructive to note that international donors have designed
conditionalities for project finance in which the role of local governments
is emphasized as a means of providing local services in market-like situa-
tions (UNDP, 1992; World Bank, 1991). The need for local governance
of urban areas and cities would become more pronounced through local
initiatives and externally funded projects.
The ingredients of intergovernmental fiscal adjustment should be
developed to meet the challenges of adequate service delivery arising from
urbanization, globalization, and climate change. The challenge would be
to devise a workable intergovernmental fabric within the framework of
Indian fiscal federalism. It should consist of revitalization of local revenue
base and development of a revenue-expenditure-grant mechanism that
can transform local government as financially viable entity. Put differently,
institutional attempts should be made to help policymakers in designing
appropriate local fiscal architecture having consequences for local fiscal
autonomy and sustainable development.
The upshot is that a sound framework of intergovernmental fiscal

relations will go a long way in meeting the emerging challenges of glob-
alization, urbanization, and climate change. However, we should not lose
sight of one of the major issues that streamlining of lone revenue source,
local property tax may assume a gigantic task for fiscal analysts and public
policymakers.
1.8 Territorial Coverage of the Study

The governance of metropolitan economic regions in India is fragmented,
based on territorial jurisdictions of Municipal Corporations, Municipal
Councils, Nagar Panchayats, and Gram Panchayats (see Table 1.1). These
elected bodies are the units of local governance and have the consti-
tutional mandate to mobilize/receive funds and deliver public services.
The Constitution specifies that Nagar Panchayats are meant for areas
which are in transition from rural to urban, Municipal Councils are for
smaller urban areas, and Municipal Corporations for larger urban areas.
In India, the practice varies from state to state. State notifications are
governed by Municipal Acts of different states. Effectively, state govern-
ments notify the establishment of these urban local governments based
on population, revenue generated for local administration, employment
in non-agricultural activities, etc. Often, multiple urban local govern-
ments exist within the same metropolitan region leading to uncoordinated
spatial and transport planning, and varying levels of service delivery within
the region. The focus of this book is urban local finance in theory,
practice, and policymaking.
1.9 Overview of Chapters

This chapter is an introduction to basic issues in urban local finance
and emerging challenges. This chapter throws three important issues
for discussion. First, despite India being a vibrant democracy, fiscal
decentralization down to local-level governance has been neglected. The
constitutional reforms relating to local government in later years have
been half-hearted, lacking in emphasis on fiscal consolidation of these
local bodies. Two, local government operations have been rendered
borderless due to the participation of governments at different layers,
autonomous agencies, and private actors in local jurisdictions. Three, the
Table 1.1 Classification of local government authorities
1
Classification Sub-category Population range Governing local authority No. of cities as per Census of
India, 2011
Small Town Small Town I 5000–20,000 Nagar Panchayat 7467

Small Town II 20,000–50,000 Nagar Panchayat/
Municipal Council
Medium Town Medium Town I 50,000–1,00,000 Municipal Council
Medium Town II 1 lakh to 5 lakh Municipal Council 372
Large City – 5 lakh to 10 lakh Municipal Corporation 43
Metropolitan City Metropolitan City I 10 lakh to 50 lakh Municipal Corporation/ 45
Metropolitan Planning
Committee
Metropolitan City II 50 lakh to 1 Crore Same 5
Megapolis – More than 1 Crore Same 3
Source Ministry of Urban Development (2015)

EMERGING CHALLENGES IN URBAN LOCAL FINANCE
21
opportunities provided by globalization and climate change have not been

taken on board to streamline local government financial management.
Chapter 2 attempts to present the basic ingredients of the theory of
public goods, local public goods, global public goods, and theoretical
developments in modes of fiscal decentralization and voting behavior for
service provision.
Chapter 3 portrays advances in the theory of fiscal federalism with
ingredients of the First- and Second-Generation Theories of Fiscal Feder-
alism. This chapter also presents some recent changes in the practice of
fiscal decentralization and potential public and private partnership oppor-
tunities, which can be termed as extensions in the practice of local fiscal
operations in India.
Chapter 4 discusses the links between globalization, urbanization, and
local government finances in the light of the relevant theoretical and
empirical literature. Pertinent issues in the Indian context are raised.
Emerging challenges for fiscal decentralization and local government
budgets consequent upon episodes of globalization, privatization, and
revenue maximization (leviathan goal) are also analyzed. The chapter
discusses implications of globalization-induced climate change for local
governance. Emphasis is placed upon the significance of local fiscal poli-
cies in the presence of globalization, urban growth, and interjurisdictional
fiscal competition.
Chapter 5 elaborates the strategy of Corporate Social Responsibility
(CSR) with reference to local area preference and expertise of a firm,
and how this strategy promotes fiscal decentralization and works like a
local fiscal additionality. The spatial dispersion of CSR activities in India
and implications for decentralization are discussed. Moreover, the need
to redefine local area in terms of benefit area for conducting performance
CSR audits is highlighted. We propose the design of a new CSR Foot-
print measure to foster decentralization of such activities. This chapter
is more of an exploratory nature as this source of local finance is not
well-integrated in the local fiscal fabric.
Chapter 6 concentrates on the role of local government intervention
in global and local climate management. Different sources of climate
finance for local government including grants-in-aid are analyzed. Grants-
in-aid emerges as an important source of climate finance not only because
climate disturbances are not limited to well-defined local jurisdictions but
also due to interdependence between national and subnational climate
policies. While climate change adaptation is a preferred local government
area, their role in climate mitigation should not be underplayed. The

role of climate clubs and city-level intervention in mitigation and adapta-
tion are examined. Emerging climate strategies in urban India and other
countries are discussed.
Chapter 7 attempts to illustrate the borderless and overlapping fiscal
management of water (and sewerage) supply, with focus on urban
setting. Existing institutional provision arrangements are overviewed. As
against (almost) totally decentralized provision modes by departments of
ULBs or autonomous municipal water boards, incomplete decentraliza-
tion indicative of vanishing borders is demonstrated by the existence of
state-run water departments, overlapping (shared) responsibilities, and/or
overlapping jurisdictions. The cases of functional decentralization may
not be very well in tune with fiscal decentralization. Episodes of utility
privatization are also critically analyzed. Moreover, issues of water pricing
practices and affordability are extensively discussed with suitable case
studies. Utility performance linked to institutional setup is attempted but
bearing in mind various very recent government initiatives to empower
ULBs to meet United Nations SDG 6 Goals, and also make privatization
work.
Chapter 8 focuses on the political economy of intergovernmental fiscal
relations. The analysis extends the leviathan literature by incorporating
cheating by state government and retaliation by local government. While
maximizing revenue sharing, local governments, in the first instance,
would prefer less reliance on local taxes, thus giving way to state taxes with
an arrangement of sharing the expanding tax proceeds. However, strategic
fiscal manipulation at the state government level may result in local fiscal
retaliation and growth of local budget. Alternative hypotheses on local
fiscal behavior due to positive and negative fiscal shocks are empirically
tested by using various analytical tools such as expenditure stimulation
of grants and fiscal retaliation by local government as a reaction to rapid
growth in state expenditure.
Chapter 9 examines issues in environmental fiscal federalism and rele-
vance of intergovernmental grants as environmental policy instrument.
We empirically assess the relative efficiency of alternative levels of govern-
ments in abatement of pollutants, characterized in terms of their impact
area (local vs. interjurisdictional) and number of emitters. The underlying
idea is to explore the relevance of local government intervention in rela-
tion to benefit area of local climate actions. Alternative modeling and
estimation strategies such as seemingly unrelated equations and instru-

mental variable approaches are employed to ensure robustness of our
results. The models are tested with time series data from Delhi Munic-
ipal Corporation (before its trifurcation) and Brihanmumbai Municipal
Corporation.
Chapter 10 presents an exercise in identifying local tax potential to
strengthen the base of urban local budgets. The analysis captures the
potential of underutilized user charges, stagnant local property tax and
proposed local environmental levy, namely local carbon tax. It is argued
that user charges are neutral levies because the degree of distortion,
measured in terms of marginal cost of public funds (MCF) is apparently
much lower than other local taxes. As regards local property tax, busi-
ness property tax (BPT) is advocated to supplement the residential part
of the property tax. BPT is proposed to be designed using standardization
and indexation principles. The objective is to eliminate the role of peri-
odic valuation of properties, which is invariably challenged in the court
of law, resulting in lower collection performance. Business property tax
should be made more responsive to market trends and local government
expenditure needs. For the local carbon tax, it will be worthwhile to tap
the information available from NASA satellite data on night-time light
density in urban areas as a proxy for electrical energy used in the area for
an estimate of potential tax base.
Chapter 11 concludes with summary, policy implications, and agenda
for future research.
1.10 Salient Remarks

This introductory chapter is a prelude to raising and discussing the basic
issues and showing the borderless nature of local jurisdictions both in
terms of revenue raising and spending. An attempt is made to assemble
the basic issues in urban local finance in a historical context and cover
later developments that challenge the existence of local government as
an important layer of governance. The emphasis is placed on how the
absence of targeted local fiscal reforms and overwhelming significance of
higher governments in intergovernmental fiscal operations undermine the
autonomy of local governments.
International developments, namely globalization and climate change
are expected to provide new opportunities to expand the base of local
government. Ground-level developments however do not meet the expec-

tations. Functional decentralization in the form of autonomous boards
in sectors like water and sewerage has contributed to the decline of
fiscal decentralization. While the dependence on grants from higher-level
governments is one of the important ingredients of fiscal federalism, it also
engenders dampening impact on local revenue effort, further weakening
local finance.
Note
1. The flypaper effect is a phenomenon that describes the expenditure
behaviour of a local government in response to grants from higher levels
of government. It “results when a dollar of exogenous grants-in-aid leads
to significantly greater public spending than an equivalent dollar of citizen
income: Money sticks where it hits” (Inman, 2008). The idea is that private
sector income tends to be allocated to private consumption “rather than be
taxed away” while public income from fiscal transfers tends to be spent
by the public sector “rather than being rebated back to citizens” (Vegh &
Vuletin, 2015).
References
Alesina, A., & Wacziarg, R. (1998). Openness, Country Size and Government.
Journal of Public Economics, 69(3), 305–321.
Bahl, R. W., & Nath, S. (1986). Public Expenditure Decentralization in Devel-
oping Countries. Environment and Planning C: Government and Policy, 4(4),
405–418.
Blewett, R. A. (1984). Off Budget Activities of Local Government: A Comment.
Public Choice, 42, 205–211.
Bu, M., Lin, C. T., & Zhang, B. (2016). Globalization and Climate Change:
New Empirical Panel Data Evidence. Journal of Economic Surveys, 30(3), 577–
595.
CIESIN (Center for International Earth Science Information Network). (2006).
Global Rural-Urban Mapping Project (GRUMP), Alpha Version. http://
sedac.ciesin.columbia.edu/gpw/
Dalton, H. (1971). Principles of Public Finance. Routledge.
De Sherbinin, A., Schiller, A., & Pulsipher, A. (2007). The Vulnerability of
Global Cities to Climate Hazards. Environment and Urbanization, 19(1),
39–64.
Dilley, M., Chen, R. S., Deichmann, U., Lerner-Lam, A. L., & Arnold, M.
(2005). Natural Disaster Hotspots: A Global Risk Analysis. The World Bank.
http://www.ldeo.columbia.edu/chrr/research/hotspots/coredata.html
Easterly, W. (2003). Can Foreign Aid Buy Growth? Journal of Economic
Perspectives, 17 (3), 23–48.
Gangopadhyay, P., & Nath, S. (2001). Deprivation and Incidence of Urban
Public Services: A Tale of Three Cities. Review of Urban & Regional
Development Studies, 13(3), 207–220.
Garrett, G., & Rodden, J. (2003). Globalization and Fiscal Decentralization.
In M. Kahler & D. Lake (Eds.), Governance in a Global Economy: Political
Authority in Transition (pp. 87–109). Princeton University Press.
Gyourko, J., & Tracy, J. (1991). The Structure of Local Public Finance and the
Quality of Life. Journal of Political Economy, 99(4), 774–806.
Inman, R. P. (2008). The flypaper effect. NBER Working Paper, w14579.
National Bureau of Economic Research, Cambridge, MA.
Jackson, R. B., Le Quéré, C., Andrew, R. M., Canadell, J. G., Korsbakken,
J. I., Liu, Z., Peters, G. P., & Zheng, B. (2018). Global Energy Growth is
Outpacing Decarbonization. Environmental Research Letters, 13(12), 120401.
Ministry of Urban Development. (2015). Urban and Regional Development
Plans Formulation and Implementation (URDPFI) Guidelines (Vol. 1). New
Delhi: Ministry of Urban Development, Government of India.
Mohanty, P. K., Misra, B. M., Goyal, R., & Jeromi, P. D. (2007). Munic-
ipal Finance in India: An Assessment. Mumbai: Reserve Bank of India,
Development Research Group, Study No. 26.
Mueller, D. C. (2003). Public Choice III . Cambridge University Press.
Nath, S. (2012). A Political Cost Model of Fiscal Federalism: Some Empirical
Results from Indian Federation. In D. K. Srivastava & U. Sankar (Eds.),
Development and Public Finance: Essays in Honour of Raja J. Chelliah
(pp. 98–112). New Delhi: SAGE Publications.
Persson, T., & Tabellini, G. (1996). Federal Fiscal Constitutions: Risk Sharing
and Redistribution. Journal of Political Economy, 104(5), 979–1009.
Polychroniou, C. J., & Rolle, M. (2018). Is Globalization Responsible for
Climate Change? An Interview with Graciela Chichilniski and Helena
Norberg-Hodge. Rozenberg Quarterly Magazine. http://rozenbergquarte
rly.com/is-globalization-responsible-for-climate-change-an-interview-with-gra
ciela-chichilnisky-and-helena-norberg-hodge/
Rath, A. (2009). Octroi—A Tax in a Time Warp: What Does Its Removal Imply
for Greater Mumbai? Economic and Political Weekly, 44(25), 86–93.
Rodrik, D. (1998). Has Globalization Gone Too Far? Challenge, 41(2), 81–94.
Romero-Lankao, P., & Dodman, D. (2011). Cities in Transition: Trans-
forming Urban Centers from Hotbeds of GHG Emissions and Vulnerability
to Seedbeds of Sustainability and Resilience: Introduction and Editorial

Overview. Current Opinion in Environmental Sustainability, 3(3), 113–120.
Sadoway, D., Gopakumar, G., Baindur, V., & Badami, M. G. (2018). JNNURM
as a Window on Urban Governance. Economic & Political Weekly, 53(2),
71–81.
Sala-i-Martin, X., & Subramanian, A. (2013). Addressing the Natural Resource
Curse: An Illustration from Nigeria. Journal of African Economies, 22(4),
570–615.
Tiebout, C. M. (1956). A Pure Theory of Local Expenditures. Journal of
Political Economy, 64(5), 416–424.
UNDP (United Nations Development Programme). (1992). The Urban Envi-
ronment in Developing Countries. UNDP.
Vegh, C. A., & Vuletin, G. (2015). Unsticking the Flypaper Effect in an
Uncertain World. Journal of Public Economics, 131, 142–155.
World Bank. (1991). Urban Policy and Economic Development: An Agenda for
the 1990s. The World Bank.
World Bank. (2020). Urban Development—Overview. Washington, DC: The
World Bank. https://www.worldbank.org/en/topic/urbandevelopment/ove
rview#1. Accessed 27 May 2022.
CHAPTER 2
Public Goods Provision and Local Fiscal

Domain
2.1 Introduction
The economic system of a nation produces private and public goods,
which are transacted in the marketplace and provided through public and
semi-public governance channels, respectively. There are two important
and related issues to resolve with a view to understanding the properties
of private and public goods and services produced. First is that why there
is a case for public (government) provision of some goods and services.
The other is that if there is a ground for government intervention, which
government, national, or subnational at provincial and local levels should
provide it. As regards the latter question on which layer of government
should provide public goods, it will depend on the spread of the benefit
area of that good and service. If the benefit area is the whole nation, it
is called national public good, and it should be provided by the national
or central government. Alternatively, if a local jurisdiction coincides with
the benefit area, it is called local public good, and its provision should be
assigned to a local government.
The “Decentralization Theorem” formulated by Oates (1972) states
that “For a public good—the consumption of which is defined over
geographical subsets of the total population, and for which the costs of
providing each level of output of the good in each jurisdiction are the
same for the central or for the respective local government—it will always
be more efficient (or at least as efficient) for local governments to provide
© The Author(s), under exclusive license to Springer Nature 29

Singapore Pte Ltd. 2022
S. Nath and Y. N. Madhoo, Vanishing Borders of Urban Local Finance,
https://doi.org/10.1007/978-981-19-5300-2_2
the Pareto-efficient levels of output for their respective jurisdictions than

for the central government to provide any specified and uniform level of
output across all jurisdictions”.
It is straightforward, on the other hand, that private goods like a loaf
of bread can be provided by the market because its benefits are enjoyed
by the person who pays for it, and he/she is distinctly identified. More-
over, property rights for such goods rest with the buyer. This arrangement
is efficient as both parties are as well-off as possible. The other class of
goods is however not in the nature of private goods because their prop-
erty rights do not belong to anyone or a few but to the community
at large. They are meant for collective consumption provided through
government budgetary channels. What is important to emphasize that
goods with these characteristics are likely to be under-supplied by private
firms or not supplied at all (unless under contract to a government entity).
Moreover, firms cannot provide the level of such goods and services that
would maximize net benefits across the community and still recover the
full costs of supply.
Government intervention does not mean however that social welfare
is maximized in relation to citizen-voter preferences. Public interest
approach assumes that government is a social welfare maximizer, but in
political economy approach, crystalized in public choice models, govern-
ment (politicians and bureaucracy) may be self-interest maximizing,
leaving the taxpayers’ interests behind. Brennan and Buchanan (1980)
developed a leviathan model of government in which government maxi-
mizes revenue to expand the size of government. Political wing of the
government aims at vote maximization and administrative wing maxi-
mizes the size of the bureau, that is the budget in line with self-interest
(Box 2.1). Despite the perils of government intervention, most economic
arguments for government role in providing public good or service is
because of lack of well-defined property rights and more importantly due
to externalities involved in public goods provision. Externalities would
result in sub-optimal provision of public goods with adverse consequences
for citizen-voter preferences and welfare.
Another random document with
no related content on Scribd:
The dough was then handed to a third woman, who baked it in the
form of cakes on a chafing-dish, with charcoal and straw. These
cakes she distributed to the division of warriors, whose food she was
charged to provide, and who came every minute to demand their
portion.
Other women walked beside the camels to milk them into cahahs,—
wooden pails, containing four litres: these were passed from hand to
hand to slake the thirst of the troops. The camels ate as they
marched, from bags hung round their necks; and when their riders
wished to sleep, they lay at their length on the camels, their feet
secured in the sacks to protect them from falling. The slow and
measured step of the camels invites to sleep, and I have never slept
better than on this march. The wife of the Emir Faress was delivered
in her howdah of a son, who received the name of Harma, from the
place we were passing when he came into the world: it is at the
confluence of the Tigris and Euphrates. We were soon after joined
by three tribes: El Harba, El Suallema, and El Abdalla. We reckoned
seven thousand tents when Dehass joined us. This imposing
succour reassured him; we gave him a magnificent supper, after
which he affixed his seal to our treaty.
The enemy was still at the distance of a day’s journey. Our men and
horses being in great need of repose, the Drayhy commanded a two
days’ rest; but the assailants did not allow us the desired truce. As
soon as the report of our approach reached them, they began their
march, and the next day thirty thousand men were encamped an
hour from us. The Drayhy immediately advanced his army to the
banks of the river, fearing that our supply of water might be
intercepted; and we took up a position near the village of El Hutta.
The next day, the Drayhy sent a letter to the chiefs of the five tribes
who were come to attack us: Douockhry, chief of El Fedhay; Saker
Ebn Hamed, chief of El Modianu; Mohdi Ebn Hud, of El Sabha;
Bargiass, of Mouayega; and Amer Ebn Noggies, chief of Mehayeda.
This attempt was wholly unsuccessful: the answer was a declaration
of war, the style of which clearly proved that our intentions had been
misrepresented, and that the chiefs acted under foreign influence.
Sheik Ibrahim proposed to send me to them with presents, to
endeavour to come to an explanation. My embassies had hitherto
succeeded so well, that I accepted this with pleasure, and set out
with a single guide: but scarcely had we reached the tent of Mohdi,
who lay nearest to us, when their advanced guard came upon us like
wild beasts, robbed us of our presents and our clothes, put irons on
our feet, and left us naked on the burning sands. In vain I entreated
permission to explain; I was threatened with instant death if I
persisted in remonstrating. Some moments afterwards, I saw the
perfidious Absi advancing to me: I then understood the cause of the
inconceivable treatment of which I had been the victim; he had been
travelling from tribe to tribe to raise enemies against us. I was so
enraged at the sight of him, that my fallen courage revived, and I
determined to die bravely if I could not live to take vengeance. He
approached, and, spitting in my face, cried, “Dog of an infidel! in
what manner do you choose that I should separate your soul from
your body?”—“My soul,” I replied, “is not in your power; my days are
numbered by the great God: if they are to end now, it signifies little in
what manner; but if I am still to live, you have no power to kill me.”
He then withdrew to excite the Bedouins against me afresh, and
men, women, and children came to overwhelm me with outrages:
some spit in my face, others threw sand in my eyes; several pricked
me with their djerids. I was kept twenty-four hours without eating or
drinking, and suffering a martyrdom it is impossible to describe.
Towards the evening of the second day, a young man, named labour,
came to me, and drove away the children who were tormenting me. I
had already remarked him; for, of all those I had seen during this
day, he alone had not insulted me. He offered to bring me bread and
water at nightfall. “Hunger and thirst,” I replied, thanking him, “are of
little consequence; but if you could assist me to escape hence, I
would reward you generously.” He promised to attempt it, and in the
middle of the night brought me the key of my fetters, which he had
had the address to procure while the chiefs were at supper. He
opened them without noise; and without taking time to throw on my
clothes, we ran back to my tribe. All were asleep in the camp, except
the four negroes who kept guard at the entrance of Drayhy’s tent:
they uttered a cry on seeing me, and in great haste woke their
master, who came with Sheik Ibrahim: they embraced me with tears,
and handsomely rewarded my liberator. The Drayhy expressed the
most lively grief at the treatment I had experienced, and the greatest
indignation at this violation of the rights of nations. He immediately
gave orders for battle, and at sunrise we perceived that the enemy
had done the same. On the first day, there was no marked
advantage on either side. Auad, chief of the tribe Suallema, lost his
mare, for which he had refused twenty-five thousand piastres. All the
Bedouins participated in his affliction, and the Drayhy gave him one
of his best horses, very inferior however to the superb animal he had
lost. The next day the battle was renewed with increased fury, and
our loss was more considerable than that of the enemy. We were
obliged to act with extreme caution, having only fifteen thousand
troops to oppose to him. Forty of our men fell into their hands, while
we made only fifteen prisoners; but amongst these was Hamed, son
of the chief Saker. The captives on both sides were put in irons.
To these two days of fighting succeeded a tacit truce of three, during
which the two armies continued to face each other without any
demonstration of hostility. On the third day, the chief Saker, with a
single attendant, came to our camp. He was uneasy for his son, a
valiant young man, adored by his father and by all the Bedouins of
his tribe; and he came to ransom him. Hamed had been very well
treated by us; I had myself bound up his wounds. The Drayhy
received Saker with great distinction. The latter, after the customary
civilities, spoke of the war—expressed his astonishment at the
Drayhy’s ardour against the Wahabees, and said that he could not
credit so much disinterestedness, under which some secret motives
or personal views must needs be couched. “You cannot take it ill,”
added he, “that I do not engage with you without knowing your
object. Take me into your confidence, and I will second you to the
utmost of my power.” We replied, that we were not in the habit of
admitting to our secrets those of whose friendship we had no
assurance; but that if he chose to sign our treaty, we should have no
concealments from him. He then asked to be made acquainted with
this engagement, and after having listened to a lecture of the
different articles, with which he seemed to be very well content, he
assured us that things had been very differently represented to him,
and repeated the calumnies that Absi had spread concerning us. He
ended by affixing his seal to the treaty, and afterwards pressed us to
explain the object we were aiming at. Sheik Ibrahim told him that our
intention was to open a passage from the coasts of Syria to the
frontiers of India, to an army of a hundred thousand men, under a
powerful conqueror, who would relieve the Bedouins from the yoke
of the Turks, restore to them the sovereignty of the country, and
enable them to obtain possession of the treasures of India. He
affirmed that there was nothing to be lost, but every thing to gain, in
the execution of this project, the success of which depended upon
the union of forces and the harmony of inclinations. He promised that
their camels should be paid at a high price for the transport of the
provisions for this great army, and made him look to the commerce
of these vast countries as likely to become a source of inexhaustible
riches to them.
Saker entered fully into our views; but it was still necessary to
explain to him that the Wahabee[J] might counteract our plans; that
his religious fanaticism would naturally be opposed to the passage of
a Christian army; that his spirit of domination, which had already
made him master of Yemen, Mecca and Medina, would extend his
pretentions to Syria, where the Turks could not offer him any serious
resistance: that, on the other hand, a great maritime power, enemy
to the one we favoured, would infallibly make an alliance with him,
and would send forces by sea to cut us off from the road of the
desert. After much debate, in which Saker showed both judgment
and sagacity, he entirely acquiesced in our arguments, and promised
to use all his influence with the other tribes. It was agreed that he
should be chief of the Bedouins of the country we were then in, as
the Drayhy was of those of Syria and Mesopotamia: he engaged
between this time and the same period in the next year to unite the
different tribes under his orders, while we should pursue our route;
and promised that at our return all should be made easy to us. We
separated, enchanted with each other, after loading his son with
presents, and liberating all the other prisoners. Saker, on his part,
sent back our forty men; and the next day wrote us word that Mohdi
and Douackhry no longer opposed our projects, and that they were
about to remove to hold a conference with Bargiass, at three hours’
distance. In fact, they broke up their camp, and we did the same; for
the assemblage of so large a number of men and cattle had covered
the earth with filth, and rendered our continuance in the place quite
intolerable.
We encamped at six hours’ distance, at Maytal el Ebbed, where we
rested eight days. Saker came there to us, and it was agreed that he
alone should undertake to raise the Bedouins of these districts, while
we should return into Syria, lest by too long abandoning our first
conquest, our enemies should take advantage of our absence to
embroil our affairs and detach the tribes from our alliance.
Besides, the spring was already advanced, and it behooved us to
hasten thither, lest the pasturages of Syria and Mesopotamia should
be occupied by others. We deferred then, till the year following, the
project of pushing our recognizance as far as the frontiers of India.
By that period, Saker would have had time to prepare the tribes of
his neighbourhood to second us; “for,” said he, “the tree is uprooted
by one of its branches.”
Some days’ march brought us back to Mesopotamia. In two more we
crossed the Euphrates near Mansour and the desert called El
Hamad. We encamped in a place where water is only to be had by
digging deep holes, and is at last only fit for the beasts. Man cannot
drink of it. The place is called Halib El Dow, because milk is here the
only beverage.
We went from thence to El Sarha, a district abundantly supplied with
water and herbage, and here expected to be indemnified for our
privations; but a particular circumstance speedily dashed our hopes.
The soil is covered with an herb called Kraffour, which the camels
eat with avidity, and which has the property of inebriating them to the
point of madness. They run to the right and left, breaking every thing
they encounter, overthrowing the tents, and pursuing the men.
During four-and-twenty hours no one could get any rest; the
Bedouins were constantly employed in mastering the camels and in
calming their fury. I should have preferred actual war to this continual
struggle with animals whose prodigious strength, and delirious
exaltation presented incalculable dangers. But it appears that the
triumphs of skill over force has great charms for these children of
nature; for, when I went to the Drayhy to deplore the state of fever in
which this novel revolution held us, he only laughed, and assured me
it was one of the greatest amusements of the Bedouins. While we
were talking, a camel of the largest size made straight towards us,
with his head erect, and kicking up the dust with his great feet. The
Drayhy, seizing one of the stakes of his tent, waited for the furious
animal, and struck him a violent blow on the head. The weapon
broke, and the camel turned away to exercise his ravages
elsewhere. A dispute then arose as to which was the strongest, the
camel or the sheik. The latter averred, that if his club had resisted,
he should have cleft the skull of his adversary; the attendants
maintained the superiority of the animal, who had broken the
obstacle opposed to him; and my decision, that their strength was
equal, because it was a drawn battle, excited the mirth of the whole
audience.
The next day we broke up our camp, and were overtaken on the
road by a messenger from Saker, who sent us an account of the ill-
success of his negotiation with Bargiass. Our enemy Absi, who was
high in favour with the latter chief, had exasperated him against us;
had persuaded him to join Mehanna, and then to form an alliance
with the Wahabees, who were to send an army for our destruction.
The Drayhy answered, that this was no cause for uneasiness—that
God was stronger than they were, and could with ease give the
victory to the good cause. After this incident we continued our
journey.
We next learned that the tribe El Calfa was encamped at Zualma.
The Drayhy considered it important to secure the co-operation of this
powerful and courageous tribe. Its sheik, Giassem, was an old friend
of the Drayhy; but he could neither read nor write, and it therefore
became dangerous to address a letter to him, which would be read
by a Turk, and might be essentially injurious to our affairs, as
experience had taught us in the instance of the scribe Absi. Again,
then, the negotiation was committed to me; and I was sent to him,
with an escort of six men mounted on dromedaries. We arrived, after
a journey of three days, at the spot indicated, and were greatly
disconcerted to find that the tribe had removed their camp, leaving
no trace of the road they had taken. We passed the night without
eating or drinking, and deliberated the following day on what we
were to do. The affair of most immediate necessity was to find water;
for it is well known that thirst is more insupportable than hunger, and
we might also reasonably expect at the same time to meet both with
the springs and the tribe. We wandered three entire days without
finding either water or food. My palate was so perfectly dry, that I
could neither move my tongue nor articulate a sound; I had
exhausted all the artificial means of mitigating thirst, as keeping
pebbles and balls of lead in my mouth; my face was become black,
and my strength was forsaking me, when suddenly my companions
cried out, “Gioub el Ghamin!” (the name of a well in the desert,) and
darted forward. These men, inured to fatigue, sustained privations in
a manner inconceivable to me, and were far from imagining to what
a deplorable condition I was reduced. On seeing them run from me,
the irritation of my nerves, excited by fatigue, made me despair of
reaching the well, where I fancied they would not leave a single drop
of water for me; and I threw myself on the ground weeping. Seeing
me thus overcome, they returned, and encouraged me to make an
effort to follow them. We arrived at length at the well, and one of
them leaning over the parapet, drew his sabre, declaring he would
cut off the head of the first man who dared approach. “Be governed
by my experience,” said he, “or you will all perish.” The authoritative
tone he assumed had its effect upon us, and we all obeyed in
silence. He called us one by one, beginning with me, and made us
first lean over the margin of the well to inhale some of its moisture.
Then drawing a small quantity of water, he wetted our lips with his
fingers; by degrees he allowed us to drink a few drops, then a small
cup full; and having pursued this rational treatment for three hours,
he said, “You may now drink without risk; but if you had not listened
to me, you would have been all dead men; for drinking without
precaution, after long privation, is certain destruction.” We passed
the night on this spot, drinking continually, as much for nourishment
as to slake our thirst, which, notwithstanding this indulgence,
seemed insatiable. In the morning we climbed an eminence that we
might see farther round us; alas! nothing but the boundless desert
met our view. At length, however, one of the Bedouins thought he
descried an object in the distance, and soon asserted that it was an
howdah covered with scarlet cloth, and borne by a camel of great
size. His companions saw nothing, but having no better guide to
follow, we turned our steps in the direction indicated; and, in fact,
soon afterwards we found ourselves approaching a great tribe, and
distinctly saw the howdah which had served us for a pharos: happily
it proved to be the tribe we were in quest of.
Giassem received us kindly, and did his best to remedy our fatigue. I
satisfactorily accomplished the object of my mission to him, and he
dictated a letter to the Drayhy, in which he undertook to place his
men and goods under his orders, saying that the alliance between
them ought to be of the closest kind, on account of their long-
standing friendship. I set out on my return, provided with this
important document, but, on the other hand, much interested in the
news he had imparted to me of the arrival of a princess, daughter of
the King of England, in Syria, where she was displaying the luxuries
of royalty, and had been received with all sorts of honours by the
Turks. She had made magnificent presents to Mehanna el Fadel,
and had been escorted by him to Palmyra, where she had profusely
distributed her largesses, and had made a formidable party among
the Bedouins, who had proclaimed her queen.[K] Sheik Ibrahim, to
whom I carried this intelligence, was greatly disturbed by it, believing
it to be an intrigue to ruin our plans.
The Drayhy, perceiving our misgivings, reassured us by declaring
that if they sowed sacks of gold from Hama to the gates of India,
they would be unable to detach a single tribe from the solemn
engagement which had been contracted.
“The word of a Bedouin is sacred,” he added; “follow up your
projects without uneasiness. For my part, my campaign is planned. I
am going to the Horan to watch the proceedings of Ebn Sihoud,
whom alone we have cause to fear. I shall then return, and encamp
in the environs of Homs.”
Sheik Ibrahim, having no longer either money or merchandise,
determined to send me immediately to Corietain, whence I should
despatch a messenger to Aleppo to procure a supply of cash. I went
joyfully, as the expedition gave me a prospect of visiting my friends
and reposing some time amongst them. My first day’s journey was
performed without accident; but on the following day, about four
o’clock, at a spot named Cankoum, I fell into the midst of what I
believed to be a friendly tribe, but which proved to be that of
Bargiass. It was now too late to recede; I therefore made for the tent
of the sheik, preceded by my negro Fodda: but scarcely had I set
foot on the ground, when he was massacred before my eyes, and I
saw the same weapons which had despatched him raised upon me.
The shock was so great, that I have no recollection of what followed,
except that I cried out, “Stop! I claim the protection of the daughter of
Hedal!” and fainted. When I re-opened my eyes, I found myself lying
on a couch in a tent, surrounded by a score of females, who were
endeavouring to recall me to life: some were holding burnt hair,
vinegar, and onions to my nostrils; while others bathed me in water,
and introduced melted butter between my dry and contracted lips. As
soon as I had perfectly recovered my consciousness, the wife of
Bargiass took me by the hand, saying:
“Fear nothing, Abdallah: you are in the tent of the daughter of Hedal,
and no one has a right to injure you.”
Bargiass presenting himself shortly afterwards at the entrance of the
tent, to make his peace, as he said, with me,—“By the head of my
father,” cried she, “you shall not cross my threshold till Abdallah is
entirely cured!”
I remained three days under Bargiass’s tent, tended in the most
affectionate manner by his wife, who was negotiating meanwhile a
reconciliation between her husband and me; but I felt so rancorous a
resentment at his brutality that I found it difficult to pardon him: at
length, however, I consented to bury the past in oblivion, on
condition of his signing the treaty with the Drayhy. We then
embraced and entered into an oath of fraternity. Bargiass presented
me with a negro, saying, “I have sacrificed your silver, but in return I
give you a jewel;” a play of words upon the names of the two
negroes, Fodda, silver, and Gianhar, jewel. He afterwards gave an
entertainment in honour of our reconciliation. In the midst of the feast
a courier arrived at full speed from the Drayhy, bringing to Bargiass a
declaration of exterminating war, and full of the most opprobrious
epithets. “Oh! thou traitor,” he wrote, “who violatest the sacred law of
the Bedouins! thou wretch for ever infamous, who massacrest thy
guests! thou Ottoman under a black skin! know that all the blood of
thy tribe would not suffice to compensate for that of my dear
Abdallah! Prepare thyself for battle, for my courser will rest no more
till I have destroyed the last of thy race!” I hastened my departure, to
prevent any collision, and to comfort Sheik Ibrahim and the Drayhy. I
cannot describe the joy and astonishment which my presence
caused; and so miraculous did my return appear, that they could
scarcely credit the evidence of their eyes, till I had related all my
adventures.
The next morning I again took the road to Corietain, where I waited
for twenty days the return of the messenger I had sent to Aleppo,—a
respite which I found very seasonable both for repose and for the
repair of my tattered wardrobe; but necessity protracted my stay
beyond my inclination, for news was spread that the Wahabees had
invaded the desert of Damascus and ravaged several villages,
massacreing men and children without exception, and pillaging the
women, whom alone they spared. The Sheik of Corietain, too weak
to offer the smallest resistance, caused the gates of the town to be
closed, forbade any egress from it, and tremblingly awaited the
issue. We soon learned that the enemy having attacked Palmyra, the
inhabitants had retired within the precincts of the temple, and there
successfully defended themselves; and that the Wahabees, unable
to force their position, had contented themselves with killing the
camel drivers and carrying off their camels. From thence they
proceeded to ransack the village of Arack, and had dispersed
themselves throughout the environs. This sinister intelligence
alarmed me for the fate of my messenger, who however arrived safe
and sound with Sheik Ibrahim’s money. He had taken refuge for a
short time at Saddad, the inhabitants of which having paid a pretty
heavy contribution, had for the moment nothing more to fear.
Profiting by this circumstance, I laid aside my Bedouin habiliments,
and dressing myself as a Christian of Saddad, made my way to that
village, where I obtained news of the Drayhy, who was encamped
with the tribe of Bargiass at Ghandah el Cham. I rejoined him the
first possible opportunity, and learned with chagrin that a formidable
coalition had been effected between Mehanna el Fadel and the tribe
established at Samarcand; and that by their intrigues with the
governors of Hems and Hama, some Turks and Bedouins had been
drawn into the alliance against us. In this critical conjuncture I
bethought myself of our friend the Pacha Soliman, and persuaded
Sheik Ibrahim to visit Damascus for the purpose of consulting with
him. We set out at once, and alighted at the house of his prime
minister, Hagim, from whom we learned the name of the supposed
English princess: he informed us that it was through the influence of
Lady Stanhope’s presents that Mehanna had acquired so powerful a
party amongst the Turks. These details confirmed our suspicions that
England, aware of our projects, was subsidizing the Wahabees on
one hand, while on the other she endeavoured, through the
intervention of Lady Stanhope, to unite the Bedouins of Syria with
the Turks. An Englishman, whom we met at the house of M.
Chabassan, assuming the name of Sheik Ibrahim, added strength to
these conjectures: he endeavoured to extract something from us, but
we were too much upon our guard. Having obtained what we wished
from Soliman Pacha, we hastened to rejoin our tribe.
The Drayhy’s courage was not diminished; he assured us he could
make head against a much stronger array. The firman granted us by
Soliman Pacha required the governors of Hems and Hama to hold in
respect his faithful friend and well-beloved son, the Drayhy Ebn
Challan, who ought to be obeyed, being supreme chief of the Desert
of Damascus; and that any alliance in opposition to him was contrary
to the will of the Porte. Furnished with this document, we advanced
towards Hama; and some days afterwards Sheik Ibrahim received
an invitation from Lady Hester Stanhope to pay her a visit in
company with his wife, Madame Lascaris, who was still at Acre; an
invitation that annoyed him the more, as he had for three years
avoided sending any intelligence to his wife, in order to conceal from
the world the place of his residence and his intimacy with the
Bedouins. It was necessary, however, to send an answer to Lady
Stanhope; he therefore wrote that he would do himself the honour of
visiting her as early as circumstances would permit, and despatched
at the same time a courier to his wife, desiring her to decline the
invitation. But it was too late; Madame Lascaris, anxious to ascertain
the existence of her husband, had instantly obeyed Lady Stanhope’s
summons to Hama, in hopes of gaining some traces of him from that
lady: M. Lascaris thus found himself under the necessity of rejoining
her.
Meanwhile Mehanna advanced nearer and nearer, fancying himself
certain of co-operation from the Osmanlis; but the Drayhy, judging
the time arrived for producing the pacha’s firman, sent it to Hems
and Hama by the hands of his son Saher, who was received with the
greatest honours. After inspecting the order of which he was the
bearer, the two governors placed their troops at his disposal,
declaring Mehanna a traitor for calling in the Wahabees, the most
inexorable enemies of the Turks.
Lady Hester Stanhope sent an invitation to Saher, and overwhelmed
him with presents for himself, his wife, and mother; gave a saddle
and boots to every horseman of his suite, and announced her
intention of shortly visiting his tribe. M. Lascaris’ visit ended less
agreeably: Lady Stanhope having vainly endeavoured, by questions
ingeniously contrived, to draw from him some explanation of his
connexion with the Bedouins, finally assumed a tone of authority
which afforded M. Lascaris a pretext for a rupture. He sent his wife
back to Acre, and quitted Lady Stanhope at open variance with her.
Mehanna made his dispositions for commencing the struggle: but
finding the Drayhy by no means intimidated by his approach, he
judged it prudent to secure a reinforcement of Osmanlis, and sent
his son Fares to Hems, to claim the governor’s promised assistance;
who, however, instead of investing him with the command of a body
of troops, had him loaded with irons and thrown into prison; and the
dismayed Mehanna, at this afflicting intelligence, beheld himself
precipitated in a moment from the supreme command, to the sad
and humiliating necessity, not only of submission to the Drayhy, but
of even soliciting his protection against the Turks. The unfortunate
old man, overwhelmed by so unexpected a reverse, was obliged to
implore the mediation of Assaf Sheik of Saddad, who promised him
to negotiate a peace; and actually accompanied him with a hundred
horsemen within a short distance of our camp. There leaving
Mehanna with his escort, he advanced alone to the tent of the
Drayhy, who received him very cordially, but refused at first to accept
the submission of Mehanna, till we interposed in his behalf. Sheik
Ibrahim represented the hospitality with which he had received us on
our arrival in the desert, and Saher, twice kissing his father’s hand,
united his solicitations to ours. The Drayhy yielding at last, the
principal men of the tribe marched forward to meet Mehanna,—an
attention due to his years and rank. As soon as he alighted, the
Drayhy assigned him the seat of honour in the corner of the tent, and
ordered coffee to be brought. Mehanna hereupon rose: “I will drink
none of thy coffee,” said he, “till we shall be completely reconciled,
and have buried the seven stones.” At these words the Drayhy also
rose; they drew and mutually presented their sabres to be kissed;
after which they embraced, and the example was followed by their
attendants. Mehanna with his lance made an opening in the ground,
in the centre of the tent, about a foot in depth; and choosing seven
small stones, he said to the Drayhy, “In the name of the God of
peace, for your guarantee and mine, we thus for ever bury our
discord.” As the stones were cast into the hole, the two sheiks threw
earth over them, and trod it down with their feet; the women
signalizing the ceremony with deafening shouts of joy: at its
termination the chiefs resumed their seats, and coffee was served.[L]
From that moment it was no longer allowable to revert to the past, or
to mention war. I was assured that a reconciliation, to be according
to rule, ought always to be solemnized in this form. After a plentiful
repast, I read aloud the treaty, to which Mehanna and four other
chiefs of tribes affixed their seals.[M]
Their united forces amounted to seven thousand six hundred tents;
and, what was far more important still, the Drayhy became by this
alliance chief of all the Bedouins of Syria, where he had no longer a
single enemy. Saher went to Hems to solicit the deliverance of
Fares, whom he brought back, attired in a pelisse of honour, to take
part in the general rejoicing; after which the tribes dispersed, and
occupied with their several stations the whole country from the
Horan to Aleppo.
We now only waited the end of the summer to return towards the
east, in order to conclude the negotiations we had commenced the
preceding year with the tribes of Bagdad and Bussora; and this
interval of calm and leisure was filled up with preparations for a
marriage between Giarah, son of Fares, chief of the tribe El Harba,
and Sabha, daughter of Bargiass, the most beautiful maiden of the
desert. I was peculiarly interested in the affair, having known the
bride during my residence with her mother. Fares begged the Drayhy
to accompany him to Bargiass to make his proposals; and the chiefs
of the tribe, in the richest attire, were in attendance. We reached the
tent of Bargiass without any one being sent to meet us; Bargiass did
not even rise to receive us: such is the usual form on such
occasions; the smallest sign of forwardness would be considered
unbecoming.
After a few moments’ silence the Drayhy spoke;—“Why,” said he, “do
you receive us so indifferently? If you are resolved to offer us no
refreshment, we will return home.” During this time Sabha,
withdrawn within that part of the tent reserved for the women,
observed her suitor through the opening of the curtain; for custom
exacts that the lady should signify her satisfaction at the appearance
of her lover, before any negotiation is entered upon; and if, after the
secret survey I have just mentioned, she gives her mother to
understand that the intended bridegroom does not please her, the
matter rests there. On this occasion, however, a young and
handsome man, of a proud and noble presence, presented himself,
and Sabha gave the requisite token of satisfaction to her mother,
who then responded to the Drayhy’s inquiry,—“You are all welcome!
Not only will we heartily afford you refreshment, but we will grant all
that you can desire.”—“We come,” returned the Drayhy, “to demand
your daughter in marriage for the son of our friend: what do you
require for her dowry?”—“A hundred nakas,”[N] replied Bargiass,
“five horses of the race of Nedgde, five hundred sheep, three
negroes, and three negresses to attend upon Sabha; and for the
trousseau, a saddle embroidered with gold, a robe of damask silk,
ten bracelets of amber and coral, and yellow boots.” The Drayhy
made some remonstrances on the exorbitance of the demand,
saying, “Thou art minded to realize the Arab proverb: ‘If thou wouldst
not marry thy daughter, increase her price.’ Be more reasonable if
thou desirest the conclusion of this marriage.”
The dowry was finally settled at fifty nakas, two horses, two hundred
sheep, one negro, and one negress. The trousseau remained as
dictated by Bargiass; saddles and yellow boots for the mother and
some other members of the family were even added above his
demand. Having written these articles, I read them aloud. Then the
assistants at the ceremony recited the prayer Fatiha—the Pater
Noster of the Mussulmans, which confers its sanction on the
contract,—and camel’s milk was handed round, as lemonade had
been at a town in Syria. After this refreshment the young people
mounted their horses and amused themselves with the djerid,[O] and
other games. Giarah, desirous to ingratiate himself with his bride,
was particularly distinguished, and she remarked with pleasure his
agility and grace. We separated at nightfall, and preparations for the
nuptials now employed the thoughts of all.
By the evening of the third day, the dowry, or rather the price of
Sabha, was ready, and a numerous procession moved with it in the
following order:—A horseman led the van, with a white flag pendent
from the point of his lance, and crying, “I bear the spotless honour of
Bargiass.” After him followed the camels, decorated with garlands of
flowers and foliage, attended by their drivers; then the negro on
horseback, richly clothed, and surrounded by men on foot singing
popular airs. Behind them marched a troop of warriors, armed with
muskets, which they frequently discharged. A woman followed,
sprinkling with incense a large vessel of fire which she carried. Then
the milch ewes, under the guidance of their shepherds, who were
singing like Chibouk, the brother of Antar, two thousand years
earlier; for the manners of the Bedouins never change. After these
came the negress, mounted upon a horse and evironed by two
hundred women on foot, constituting not the least noisy of the
groups; for the joyous shouts and nuptial songs of the Arab women
are shrill beyond expression. The procession was closed by the
camel which bore the trousseau, and formed a splendid spectacle.
The embroidered housings were spread out on all sides and covered
the animal; the yellow boots hung from his sides, and the jewels,
arranged in festoons, completed his trappings. A child of one of the
most distinguished families, mounted on this camel, repeated with a
loud voice, “May we be ever victorious! May the fire of our enemies
be extinguished for ever!” Other children accompanied him, crying,
“Amen!” For my part, I ran from one side to the other, to enjoy the
whole spectacle to the utmost.
This time Bargiass came out to meet us, attended by the horsemen
and women of his tribe; the cries and chants then became truly
deafening; and the horses galloping about on all sides, soon
enveloped us in a whirlwind of dust.
When the presents were all displayed and ranged in order around
the tent of Bargiass, coffee was made in a monstrous caldron, and
every one took some, while waiting for the feast.
Ten camels, thirty sheep, and a prodigious quantity of rice formed
the staple of the meal; after which a second caldron of coffee was
emptied. The dowry accepted, the ceremony was concluded by a
repetition of the prayer; and it was agreed that Giarah should come
at the expiration of three days to fetch his bride. Before my
departure, I visited the women in their apartments, to introduce Sheik
Ibrahim to a more intimate acquaintance with Bargiass’s wife, and to
reiterate my thanks for her care of me. She replied by expressing her
readiness to increase my obligations by bestowing her niece on me
in marriage; but Sheik Ibrahim deferred taking advantage of her
favourable intentions towards me till the following year.
On the eve of the day fixed for the wedding, a rumour arose that a
formidable army of Wahabees had appeared in the desert: couriers
flew from tribe to tribe, exhorting them to unite three or four in a
company, that the enemy might find them prepared on all points to
receive them; and the espousals had nearly been consummated by
a mortal combat, instead of the sham fight which is customary on
such occasions.
The Drayhy and the other chiefs set out very early in the morning
with a thousand horsemen and five hundred women to achieve the
conquest of the beautiful Sabha. At a short distance from the camp,
the procession halted: the women and old men alighted and awaited
the issue of a combat between the young people who came to carry
off the betrothed, and those of her tribe who opposed their design.
These contests have sometimes fatal results; but the bridegroom is
not permitted to take part in them, lest his life should be exposed to
hazard from the machinations of his rivals. On this occasion the
combatants came off with about a score of wounds; and victory, as
was reasonable, decided for our party, who carried off the bride in
triumph and consigned her to the women of our tribe. Sabha’s train
was composed of a score of maidens with three well-laden camels;
the first carrying her howdah covered with scarlet cloth, trimmed with
fringes and tufts of various-coloured worsted, and adorned with
ostrich-feathers: the interior was decorated by festoons of shells and
strings of coloured glass, forming a sort of frames to small mirrors,
which, placed at intervals, reflected the scene on all sides; and
furnished with silken cushions for the reception of the bride. The tent
formed the burden of the second camel, and the carpets and kitchen
utensils that of the third. The queen of the festival being placed in
her howdah, surrounded by the wives of the chiefs mounted on their
camels, and by other women on foot, the procession commenced its
retrograde march. Horsemen prancing in the van announced its
progress to the tribes we might meet, who were expected to greet us
by throwing incense and killing sheep under the feet of the bride’s
camels. It is not possible to convey a very exact idea of this scene,
nor of that which lasted during the whole day and night; nor to
describe the dances, the songs, the bonfires, the banquets, the
tumult, and the cries of all sorts, which her arrival occasioned. Eight
tribes were entertained by the hospitality of Fares. Two thousand
pounds of rice, twenty camels, and fifty sheep, furnished out the
feast; and in the middle of the night the cry was still, “Let him who is
hungry come and eat.” So great was my reputation among them, that
Giarah begged a talisman from me to insure the happiness of this
union: I accordingly wrote his cipher and that of his spouse in
European characters; placed the charm solemnly in his hands; and
no one doubted the efficacy of it, when they observed the
satisfaction of the new-married couple.
Some days afterwards, hearing that the Wahabees, ten thousand
strong, were besieging Palmyra, the Drayhy gave orders for
marching against them. We encountered them at El Dauh, and
exchanged some musket-shots till nightfall, but without coming to a
pitched battle. I had here leisure to appreciate the advantage of the
mardouffs, in these wars of the desert, in which it is always
necessary to carry about the commissariat of the army, and often for
a considerable time. These camels, mounted each by two soldiers,
are like moving fortresses, provisioned with everything necessary for
the nourishment and defence of their riders. A budget of water, a
sack of flour and another of dried dates, a jar of sheep’s butter, and
the munitions of war, are formed into a sort of square tower on the
animal’s back. The men, conveniently placed on each side on seats
composed of cordage, thus carry with them everything of which their
temperate habits have need. When they are hungry, they knead a
little of the meal with butter, and eat it in that state without baking; a
few dates and a small quantity of water completing their moderate
repast: nor do they quit their post to sleep, but throw themselves
across the camel in the manner I have already described. The next
day’s engagement was more serious. Our Bedouins fought with
more inveterate obstinacy than their adversaries, because their
women and children were in their rear, while the Wahabees, far from
home, and with no other object than pillage, were little disposed to
risk their lives in the cause. Night separated the combatants, but with
the earliest dawn the battle recommenced: at length, towards
evening, victory declared in our favour; the enemy having lost sixty
men killed, took to flight and left us in possession of the field of
battle, besides twenty-two prisoners, forty beautiful mares, and sixty
camels. This victory still enhanced the reputation of the Drayhy, and
filled Sheik Ibrahim with joy; in the exuberance of which he
exclaimed, “Thanks be to God, our affairs prosper!”
Having no longer any enemies to fear in the Syrian desert, Sheik
Ibrahim parted company for a time from the Drayhy, and went to
Hems to purchase merchandise and write to Europe. During our stay
in that place he left me perfectly at liberty to seek amusement, and to
recover from all my fatigues; and I made daily excursions into the
country in company with some of my young friends, doubly enjoying
this life of pleasure from its contrast with that which I had led
amongst the Bedouins. But, alas! my joy was to be of short duration,
and was soon converted into bitter anguish. A messenger, who had
been to Aleppo to fetch remittances for M. Lascaris, brought me a
letter from my mother, couched in terms of the deepest affliction, and
announcing the death of my elder brother by the plague. Grief made
her writing almost incoherent. She had been ignorant of my destiny
for nearly the last three years, and conjured me, if still in existence,
to go to her.
This dreadful intelligence deprived me of the use of my senses, and
for three days I was unconscious where I was, and refused all
nourishment. Thanks to the attentive care of M. Lascaris, I gradually
recovered my recollection; but all that I could obtain from him was
permission to write to my poor mother. Neither was I allowed to
despatch my letter till the eve of our departure, for fear she should
come herself to seek me. But I pass over the detail of my personal
feelings, in which the reader can have no interest, to return to our
travels.
The Drayhy having advertised us that he would shortly set out for the
east, we hastened to join him, with three camels, two mares, and
four guides, whom he had placed at our disposal. The day of our
departure from Hems, I felt so extraordinary a weight upon my heart
that I was tempted to regard it as a fatal presentiment. It struck me
that I was advancing to a premature death. I made the best use,
however, of my reasoning powers, and at length persuaded myself
that the oppression I experienced resulted from the dejection into
which my mother’s afflicting letter had plunged me. We set out on a
journey of twenty hours, and though wearied by travelling the whole
day, were persuaded by our guides not to halt till we had completed
it. Nothing particular occurred till midnight; when growing drowsy
from fatigue and the monotonous movement of the march, we were
alarmed by a sudden cry from the advanced guide—“Rouse
yourselves, and look well about you, for we are on the brink of a
tremendous precipice!” The road was but a foot in breadth; on the
right was a perpendicular mountain, and on the left the precipice
called Wadi el Hail. I woke in surprise, rubbed my eyes, and reseized
the bridle, which I had allowed to hang loosely over the neck of my
mare. But this precaution, which ought to have saved me, was the
very thing that had nearly caused my death; for the animal having
stumbled against a stone, fear made me draw the reins too hastily.
She reared, and in coming down lost her footing, stepped only on
vacancy, and rolled over with her rider to the bottom of the precipice.
What passed after that moment of agony I know only from Sheik
Ibrahim, who has since told me, that he dismounted in terror, and
endeavoured to distinguish the nature of the gulf in which I had
disappeared; but the night was too dark,—the noise of my fall was
the only notice he had of it, and he could discern nothing but an
abyss beneath his feet. He then betook himself to weeping, and
conjuring the guides to go down the precipice. But this they declared
impossible in the darkness, assuring him moreover, that it would be
useless trouble, since I must not only be certainly dead, but dashed
to pieces against the points of the rocks. Whereupon he announced
his resolution not to stir from the spot till the daylight should enable
him to make his researches, and promised a hundred tallarins to
whoever should recover my body, however mutilated it might be, as
he could not, he said, consent to leave it a prey to wild beasts. He
then sat down on the edge of the gulf, waiting in mournful despair for
the first glimmerings of daylight.
No sooner were they perceptible, than the four men descended the
abyss with much difficulty, and found me, insensible, suspended by
my sash, my head downwards. The mare lay dead a few toises
below, at the extremity of the ravine. I had ten wounds on my head,
the flesh torn from my left arm, my ribs broken, and my legs
scratched to the bone. I was deposited, without any sign of life, at
the feet of Sheik Ibrahim, who threw himself upon me in tears. But
having a little knowledge of medicine, and carrying always some
valuable remedies about with him, he did not long abandon himself
to a useless grief. Having satisfied himself, by the application of
volatiles to the nostrils, that I was not absolutely dead, he placed me
carefully on a camel, and retraced his steps as far as the village of El

Vanishing Borders of Urban Local Finance Global Developments With Illustrations From Indian Federation Shyam Nath All Chapter

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Vanishing Borders of Urban Local Finance Global Developments With Illustrations From Indian Federation Shyam Nath All Chapter

Uploaded by

Copyright:

Available Formats

Vanishing Borders of Urban Local

Finance: Global Developments with

ISBN 978-981-19-5299-9 ISBN 978-981-19-5300-2 (eBook)

Decentralized powers over the provision of local public services has

My foremost and sincere thanks are due to Indian Council of Social

We acknowledge the support of Palgrave, particularly Sandeep Kaur

1 Emerging Challenges in Urban Local Finance 1

Shyam Nath is currently Director of Amrita Center for Economics &

Yeti Nisha Madhoo is Professor and Co-Director at the Center for

Berkeley (USA) under Fulbright Scholarship. She has been attached to

Fig. 1.1 Cities in relation to current climate-related hazards

Fig. 6.1 Evolution of global population and global carbon

Table 1.1 Classification of local government authorities 21

Table 7.6 Domestic volumetric water prices in selected Indian

Emerging Challenges in Urban Local

© The Author(s), under exclusive license to Springer Nature 1

lack of fiscal autonomy in raising resources and undertaking expendi-

1.2 Sluggish Origin of Local

is vital is that empowerment of the municipal bodies through the consti-

1.3 Absence of Targeted Local Fiscal Reforms

Box 1.1: The Constitution (74th Amendment) Act, 1992: Urban

(d) Finance Commission—“The Finance Commission constituted

An important study by Mohanty et al. (2007) was undertaken in the

Box 1.2: Struggling Municipal Taxes

The introduction of Goods and Service Tax (GST) in 2017, for

Box 1.3: The Jawaharlal Nehru Urban Renewal Mission (JNNURM)

1.4 Self Reliant vs. Borderless

very different from that of Tiebout. Economically active community resi-

1.5 Vanishing Borders of Urban

borrow money for a particular infrastructural project in a locality, e.g.,

1.6 Focus on Global Interlinkages

replaced local farming. It promotes unnecessary long distance of trans-

capability grounds, central management of environmental quality may

local fiscal operations both in terms of expanded responsibilities and

1.7 Ingredients of Local Fiscal Design

can vary due to a host of economic, social, and political factors. In a

As mentioned earlier, this effect, known as the flypaper effect of grants

The upshot is that a sound framework of intergovernmental fiscal

1.8 Territorial Coverage of the Study

1.9 Overview of Chapters

Small Town Small Town I 5000–20,000 Nagar Panchayat 7467

Source Ministry of Urban Development (2015)

opportunities provided by globalization and climate change have not been

area, their role in climate mitigation should not be underplayed. The

estimation strategies such as seemingly unrelated equations and instru-

1.10 Salient Remarks

government. Ground-level developments however do not meet the expec-

to Seedbeds of Sustainability and Resilience: Introduction and Editorial

Public Goods Provision and Local Fiscal

© The Author(s), under exclusive license to Springer Nature 29

the Pareto-efficient levels of output for their respective jurisdictions than

You might also like