Editorial: Finance for Community-Led Local, City and National Development

Finance is as important in the global South as it is in the global North; levels of poverty might mean that finance is less available, but it is no less significant. Access to finance determines access to opportunities in towns and cities. Cash is needed to secure day-to-day sustenance, and finance is needed for investments in shelter and livelihoods. While other factors such as education, residential location, and health also shape opportunities, too often they only exist with access to finance.

Within the various UN-led global agendas, the Addis Ababa Action Agenda(1) agreed in 2015 stresses that finance is key to sustainable development and poverty eradication, and acknowledges that reform of financial systems is necessary for the achievement of global and local development aspirations. However, it does not address how financial systems have to change to meet the Sustainable Development Goals. Nor does the New Urban Agenda.(2) In part this is because few agencies have the understanding and commitment to change finance systems in ways that secure social justice, equity and poverty reduction on the ground. Additionally, global conversations around urban finance remain narrowly focused on the scale of the financing gap. Wayne Shand and Sarah Colenbrander, in this issue, argue that addressing issues of equitable and sustainable urban development requires a broad view that includes individual and collective finance, private entrepreneurial finance, and municipal and other forms of state finance. As demonstrated by all the papers in this collection, multiple local innovations are underway to address the need for a new financial architecture.

This issue of Environment and Urbanization provides evidence that the conventional processes associated with access to finance often perpetuate social and economic disadvantage. Structural changes to the institutions associated with finance are needed to tackle urban poverty and lay the foundations for improved outcomes at the city and national scales. The collection demonstrates how a new finance agenda could make a major contribution to inclusion and to “leaving no one behind”, as the Sustainable Development Goals pledge, through building individual and collective capabilities, helping to achieve subsidiarity, and strengthening participatory local government and an accountable, effective state.