UCLG Policy Paper. The Role of Local Governments in Territorial Economic Development.

This paper examines the crucial role of local and regional governments (LRGs) in economic development. It addresses national and supranational governments, international development partners, as well as LRGs themselves and their local government associations (LGAs). Its purpose is to identify the policy directions urgently needed by each of these actors to enable LRGs to perform this role effectively for their citizens. It parts from the premise that LRGs are political actors and they can and should influence the definition of policies, and not only in its implementation through small actions.

In this difficult period, many countries have carried out programs of decentralization, devolving responsibility for numerous governmental roles to LRGs. When this devolution is planned well, implemented efficiently, and managed competently, LRGs have shown themselves capable of taking on additional responsibilities and handling them well. In our focus in this paper on local economic development (LED), we highlight the many areas in which LRGs are the most appropriate tier of government to provide leadership and coordination, complementing the efforts of national governments.