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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).
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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.
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ellenmondásos gazdagságát oly mélyen, a geniális vonásoknak oly
teljességével, mint Kleopatra. Heyse jegyezte meg, hogy
alkotásakor emlékek lebeghettek előtte, talán azok, melyekre
szonettje vonatkozik:
A bűnt magát mi bájossá tevéd!

Mely, mint a féreg rózsa szép kelyhében,
Megrágja bájaid jó hírnevét;
Mily szép alakot ölt nálad a szégyen!
A Götz von Berlichingen csábító Adelheidja is a szóban forgó

jelenségek közé tartozik. Az ő csábító szépsége csalja vissza
Weislingent Götztől a bambergi püspök részére, árulóvá teszi
jegyese és barátja iránt s gyalázatos végre is juttatja, midőn őt, kinek
később felesége lett, szeretőjével megmérgezteti. Ferencz, ez az
őrjöngő gyermek, sem kerűli ki sorsát: «a méreg, mely urát sírba
vitte, őt is utána küldi». A bűbájos asszony megbabonázza (a dráma
első kidolgozásában) még a fejére mondott itélet végrehajtóját is; a
vágy, mely ez emberben Adelheid ellenállhatatlan hangjára és
tekintetére ébred, elfeledteti vele tisztét, mígnem az asszony, tőrt
vonva ellene, maga emlékezteti rá. Ezen, már-már a démoniba
áthajló csábításnak, mely a maga körében megsemmisíti a
nemesebb erőket, Kemény Idunája is jellemző példája.
Ugyanebbe a körbe tartozik, bár olykor másféle vonásokkal van
is vegyítve, a franczia társadalmi drámának és regénynek kedvelt s
minduntalan ismételt női típusa. Dumas Clemenceaunéja, Augier
Seraphineje és Olympiája, Daudet Rislernéje, Sardou Odetteje,
Ohnet Jeanneja s a többiek. Külső szépségök, melynek nem felel
meg lelki becs, végzetessé lesz környezetökre és magukra.
Végzetes épen az öszhangtalanságnál, sőt ellentétnél fogva, mely
testök és lelkök között mutatkozik. Ez teljesen jelentéktelen, amaz
meg túlságosan is fontos. Csábító, lebűvölő szépségök a fulánk,
melyben gyilkos méreg rejlik a maguk és más számára.
Tévedésöknek, vétköknek ez szolgáltatja alkalmát és ez adja meg
az árát. Ezzel nyernek meg mindent s ebben mindent vesztenek. A
modern Helenák csupán ezzel akarják a mi lelkünket is magukhoz
kapcsolni, vonzódásunkat és szánalmunkat fölébreszteni. Azonban
épen mivel szépségök az egyedűl értékes, a mi elpusztúl velök,
bukásuk soha sem lehet annyira megdöbbentő vagy csak megható
sem, mint ha nemesebb erők vesztét látjuk, melyek tiszteletünket és
részvétünket teljesebb mértékben voltak képesek felkölteni.
Antigone feláldozó kegyeletével, Lady Macbeth nagyravágyásának
démoni erejével, Phædra szerelmének őrjöngő lázával, Melinda
nemes ragaszkodásával: ezek mindegyike szól lelkünkhöz is saját
lelki életének valamely elemével, mely félelembe ejt és szánalomra
indít bennünket, s midőn fejökre zúdítja a megsértett egyetemest,
megrendít és kiengesztel. Ez a benső, lelki momentum gyakran
hiányzik az újabb franczia drámák nőalakjaiból, vagy legalább fölötte
gyöngén s nem első sorban ható tényező gyanánt nyilatkozik
bennök. Sorsuk csakis a külsőn, a testen, ennek szépségén fordúl
meg; történetök minden kanyarodásánál ez mutatkozik döntő oknak.
Julia tragédiája is azon indúl, hogy Romeo szeme megakad
szépségén; de innen aztán egészen más motivumok vezetik:
szerelmének mámoros rohamossága és meggondolatlan
kizárósága. Othello Desdemonát hő szánalmaért szereti meg,
melylyel kalandjait hallgatja. A merő testi szépség lehet az új
franczia dráma hősnői sorsának alapja és irányzója; de nem igen
lehet azé a bensőbb, mélyebb viszonyé, melybe a költő hősét
hallgatójával összefűzni törekszik. Íme a szóban forgó színművek és
regények legnagyobb részében találunk látszatra tragikus elemeket,
s mégis hiányzik belőlök az igazi tragikai hatás. Megvan az
egyesnek bizonyos kiválósága, melyből küzdelme és bukása
következik. De e kiválóság külső természetű: a küzdelemben mindig
valami külső küzd, a halálban mindig valami külső vész el, mint a
világ szép asszonyánál Erdélyi népmondái között. Az egész
jelenség oly felfogásból látszik fakadni, mely a női lélek erkölcsi
elemét, nagyobbra hivatottságát ép oly kevésbe veszi, mint a férfi
öntudatos erejét. Innen hatása is inkább külső: izgató és bágyasztó,
mint mélyebb: megrendítő és fölemelő.
Nagyra hivatottság és erő: e fogalmak már kifelé utalnak
bennünket a kellem területéről, hol két tragikai mozzanattal
találkoztunk: az önelégűltség s a csábítás mozzanataival. Mind a
kettő csak kivételkép s elvétve avatja a kellemest a tragikumba, mely
igazi alapját a szép másik területén, a fenségesen, nyilatkozó
kiválóságban találja. Greguss Ágost a kellem tárgyaltuk tragikai
megjelenéseit is abból magyarázza, hogy fenségi elemet rejtenek
magukban, a mennyiben szeretetreméltó csak az lehet, a mit kissé
tisztelünk is. Magunk is rámutattunk a csábító bájnak erőbeli, tehát
félig-meddig már fenségi jellegére; de bizonyos, hogy sem az egyik,
sem a másik jelenség hatásának nem jellemző alkatrésze a tisztelet,
mely ennélfogva alig is szolgálhat tragikai szerepök igazolására.
IV.
Fenségbeli kiválóság: a páthosz.
Az eszthetika atyja, Aristoteles, költészettanának

tizenharmadik fejezetében, következőleg jelöli meg azt a
kiválóságot, melyet a tragikai felfogás feltételének tart: A tragédia
hőse «olyan ember, a ki nem erény és jogosság által tűnik ki, sem
nem gonoszság avagy aljasság által jut szerencsétlenségbe, hanem
valamely vétség által; közelebbről olyan, ki nagy hírben és
szerencsében áll, mint Oedipus és Thyestes s az ilyen
nemzetségekből származó dicső férfiak.» A szerencséből
szerencsétlenségre, változás «ne aljasságból történjék, hanem
inkább nagy tévedése miatt olyan embernek, a minő mondatott,
avagy inkább jobbnak mint rosszabbnak. Bizonyítja ezt a tragikai
költészetnek története is. Eleinte ugyanis a költők sorjában
használtak majdnem valamennyi kinálkozó mesét; most ellenben
néhány nemzetségről költik a legszebb tragédiákat, úgymint
Alkmaion, Oedipus, Orestes, Meleager, Thyestes, Telephosról s ha
kik még azonkívül nagyokat tettek vagy szenvedtek. A művészileg
legszebb szomorújátékot ily alkotás teszi.» A következő,
tizennegyedik fejezet elején pedig azt jegyzi meg: «Olyan legyen a
mese, hogy a cselekvény hallgatója beleborzadjon és szánakozzék
a történtek miatt, mint a hogy Oedipus hallgatója érez.» Ugyane
fejezet végén olvassuk: «Nem sok nemzetségről vannak a tragédiák,
mert tárgyat keresvén a költők, a mithoszokban találtak olyasmit,
nem művészetből, de esetből készet: innen találkoznak nehány
nemzetségnél, melyekben ily szenvedések történtek.»
Ez idézetek elég világosan mutatják, mit értett Aristoteles s mit
kell értenünk nekünk is tragikai kiválóság alatt. Szemünkbe
mindenekelőtt az fog ötleni, hogy a kiválóság körét látszólag igen
szűkre szabja. Azt kivánja, hogy a tragikai alak a fényes származás
dicsőségében, a szerencse ragyogásában s a monda nagyító
avatásában álljon elénk. Példái, melyeket felhoz, kivétel nélkül
ilyenek. Pelops, Laios és Oineos nagy fiai, Thebe, Mykenæ és
Kalydon királyi nemzetségéből, hírrel, dicsőséggel és sikerrel
koszorúzottak. Részesei a trójai vagy aranygyapjas hadjáratoknak: a
hősmonda alakjai. Már születésöknél, helyzetöknél fogva nagyoknak
tünnek föl, bizonyos magasságban mutatkoznak, a fenség színét
viselik, melyet szerencséjök emel s régiségök, a monda, túloz.
Szerencséjök is, mondtuk, mert a régiek felfogása szerint ez is
érdem, tehát a fenség tényezője: Cicero a jeles emberek érdemei
elsorolásánál nem szokott megfeledkezni szerencséjökről, s Brutus
is magasztalva említi gyászbeszédében Caesar szerencséjét.
A franczia klassziczizmus, mely Aristoteles betűjéből fejtette ki
rendszerét s szorosan ahhoz kötötte a képzelet szárnyait, e
tekintetben is következetes maradt magához. Elmélete és gyakorlata
egyiránt ragaszkodott ahhoz a szűk körhöz, melyet Aristoteles a
tragikai kiválóság számára megvonni látszott. Jodelle
Kleopatrájától, az «első szabályos tragédiától» kezdve, az egész
klasszikai dráma tárgyait kivétel nélkül vagy a klasszikai mondából
és történetből, vagy a bibliából s keresztyén hagyományokból, vagy
legalább távoli időkből s messze és ismeretlen országokból
merítette. Corneille és Racine ép úgy, mint Voltaire és
Crébillon. A nemzetit térben és időben közelebb esőnek tartották,
hogysem igazán fenséges lehessen. A mi francziás iskolánk
mindenben híven követte mintaképeit, lelkiismeretesen tisztelte az
egész rendszert, kivéve annak ezt az egyetlenegy pontját. A nemzeti
eszme, mely munkássága fölött oly kiváló mértékben uralkodott,
került itt összeütközésbe a szabálylyal s erősebbnek mutatkozott
nála. A lelkesedésnek, mely a tollat testőreink kezébe adta,
legtermészetesebb tárgya a nemzeti múlt volt. Így lettek
Bessenyeinél, mindjárt Ágis után, Buda és Hunyadi László tragikai
hősökké. Hogy nincsen rajtok a magyar régiségnek saját színe, mint
Kölcsey a Nemzeti hagyományokról írt értekezésében megjegyzi,
szerinte sem bizonyít mást, mint hogy: nem könnyű idegen poézis
világából saját nemzeti világunkba visszaléphetni. Vörösmarty a
Dramaturgiai lapokban szintén kiváló súlyt fektet a történet ismert
nagy alakjainak drámai hatásosságára. «Azonban nemcsak a
történet hősei érdemlik az elsőséget, írja; hanem mindazok, kiket a
remek költemények, népregék és mondák személyesítének és
alkottanak a természet örök törvényei szerint. Ezek szinte
tulajdonainkká, emlékezetünk világa lakóivá lettek s midőn mint
cselekvők lépnek fel, felébresztik kiváncsiságunkat, ismeretségök
által lekötik figyelmünket. S mindezen individuumok, melyek hitünk,
tudományunk, ismereteink után emlékezetünkben honosúlva
vannak, úgy állanak az egészen költött színmű embereihez, mint a
történet a jövendöléshez, az ismeretes múlt a nem ismert
jövendőhöz, mint amannak élesen s határzott vonalakkal kijelelt
alakjai ennek bizonytalan, árnyék gyanánt lebegő lényeihez.» Látni
való, hogy Vörösmarty okoskodása, mely különben egészen Jean
Paulnak eszthetikai előiskolájában nyilvánított nézeteit tolmácsolja,
épen ellenkező irányú azzal, a mit fentebb mondottunk. Nem azért
ajánlja a régi nagyokat, mivel a régiség és monda által még
nagyobbak, hanem mivel ismertebbek. Igaz, hogy az ő szempontja
nem is különösen a tragikai szín és kiválóság, hanem csak általában
a drámai érdekköltés.
Azonban a regés múlt és mondaszerű túlzottság, a fényes
származás és szédítő szerencse: mindez csak emelője, fokozója a
fenség benyomásának. Alapját és lényegét más képezi s a
kiválóság, mely csupán ama mozzanatok által nyilatkozik, még nem
elég, hogy az igazi, a mi értelmünkben vett tragikum természetes
tényezője legyen. Képzeletünk az elsorolt tulajdonságok
mindegyikével fölékesíthet alakokat, kik azonban ennek daczára
sem fognak alkalmasaknak mutatkozni tragikai felfogásra. Maga
Aristoteles utal rá egy mellékesnek látszó, de annál fontosabb
megjegyzésével bennünket, hogy hol keressük az eligazodást. A
tragikus költészet számára kijelöli Oedipust és Thyestest, s «ha kik
még azonkívül nagyokat tettek vagy szenvedtek.» Lehet-e máskép
értenünk ezt, mint úgy, hogy az elsoroltak is nem annyira a hosszan
fejtegetett mellékességeknél, mint inkább ama kiválóságuknál fogva
lehetnek tragikaiak, mert ők is nagyokat tettek és szenvedtek. Ez a
fő, ez az alap, melynek a többi mind csak szilárdítására, diszítésére,
emelésére szolgál. S valóban, Oedipus és Thyestes nagyokat tettek
és szenvedtek. Ismételve hódítottak trónokat maguknak: ezen
alapszik hírök; vakmerő kézzel kaptak bele a végzet kerekébe: ebből
fakadnak szenvedéseik. Alkmæon és Orestes atyjokat boszúlták
meg anyjokon Eriphylén és Klytæmnestrán; Oedipus ismeretlenül
megölte atyját, Laiost, s feleségül vette anyját, Jokastét; Thyestes
testvérével, Atreussal, saját fiát gyilkoltatta le s iszonyú boszút látott,
midőn Atreus meg az ő gyermekeinek holttestét tálalta eléje;
Meleager anyja testvérének lett gyilkosa s édes szüléje, Althæa, által
veszett el; Telephos sebét Achilles dárdája ütötte s gyógyította meg.
A mit íme nagy tetteik és nagy szenvedéseik, amazok elkövetése s
ezeknek elviselése egyképen éreztetnek velünk, az: erejök. E
felfogás már odavezet bennünket, a hol a fenség uralkodó vonásait,
s ezekben a fenségbeli kiválóság föltételét találhatjuk meg: a
nagyságot s különösen a nagyságban nyilatkozó erőt. Főkép az erő
mozzanata az, mely az egyesnek fenségbeli kiválóságát
leggyakrabban, legkönnyebben és legtermészetesebben avatja
tragikussá.
De hát milyen erőt tartunk általában fenségesnek? A szépnek fő
formáiról mondottakból önként következik a felelet. Olyat, mely a
körébe eső erőket annyira felülmúlja, hogy, bár valósággal megvan
mértéke, mégis minden mérték fölé emelkedni látszik. Achillesét,
mely nélkül veszve van az egész görög tábor s a mely magában
képes feltartóztatni a győztes trójaiakat; III. Rikhárdét, melylyel
szemben minden ellenállás csak tehetetlen szenvedélyeskedésnek,
súlytalan asszonyi dühöngésnek s gyámoltalan és következetlen
gyülölködésnek mutatkozik, s még a győztes Richmond személyes
jelentősége is eltörpűl. Minthogy az ilyen erő egy bizonyos körben
mindent túlszárnyal, eszünkbe sem jut, hogy valamely más erő
nálánál is nagyobb lehet. Képzeletünk a végetlenig fokozza;
végetlen erőt érzünk benne. A végetlennek tetsző erő természetesen
legközelebb ér a valóban végetlenhez, az egyetemeshez, s
legkönnyebben tarthatja és viselheti is magát igazán ilyenűl.
Bitorlásánál fogva leghamarabb ütközhetik vele össze,
legnehezebben győzhető le általa, s küzdelme és bukása a
legmegrendítőbb benyomást gyakorolja. Az agg Simon bán nem
gondolhat rá, testi-lelki erőtlenségében, hogy újjat húzzon az
udvarral; Petur és Bánk bán kitámadása egészen természetes.
A végetlenre való törekvés leghatározottabban az ember lelki
ereje, akarata, szenvedélyei s ezekből folyó tettei által jut
kifejezésre. Az olyan erő azonban, mely csak valamely, tőle idegen
akaratnak vak eszköze, őt magát át nem ható eszme harczosa,
kifejtésének forrása magán kívül van: szóval az erő, mint pusztán
szolgáló, nem tarthat fenségre s ennélfogva tragikai kiválóságra
igényt. Eszme és erő itt el vannak szakadva egymástól. A tisztán
zsoldos seregekkel viselt háborúk, az olasz középkor csataterei,
melyeket Macaulay Machiavellijében jellemez, igen kevés fenséges
látványt nyújtanak. Ágnes asszony szeretőjét, «ki a tettet
végrehajtá», alig egy-két szóval érinti a költő: nem volt alkalmas
neki. Mi sem a másnak, hanem a csupán magának szolgáló, azaz a
szabad erőt keressük. Emberi fenségünk szabadságunkból foly s ez
által van föltételezve. Ez alkot minden emberi nagyságot s ez tesz
fenségessé minden erőkifejtést. Az erkölcsi függetlenség, mely
maga határoz, maga tűzi ki czélját s ennek irányában küzdve halad
előre, bukik vagy győz: ez a fenség képe, ilyen a fenségbeli
kiválóság, mely az egyetemessel való összeütközésében és
romlásában tragikai hatású. Ezt a kiválóságot megtaláljuk minden
tragikai jelenségben, mélyebb vizsgálat tisztán láttatja velünk ott is,
hol a felületes tekintetnek hiányozni látszik. A görög tragédiák hősei
kijelentett fensőbb végzés szerint rontják ugyan meg magukat; de a
végzés úgyszólván csak a tragikai helyzetet teremti meg számukra.
Tetteik e visszás helyzetekben ép oly szükségszerűleg folynak
jellemökből, testi és lelki valójokból, mint akár a keresztyén tragédia
alakjaié. A mit pedig az ember jellemének megfelelőleg tesz és
tehet: abban emberi értelemben vett szabadsága nyilatkozik. E
felfogás ép oly szabadnak mutatja Antigonet és Oedipust, Elektrát és
Ajast, mint akár Macbethet és Hamletet. Az akarat fenséges
szabadsága érvényesűlhet Prometheus lánczai és kínjai közt is;
békóit szabadsága szerint viseli, mert azt követeli Zeustól, hogy
előbb engedjen. Igaz, szabadságuk nem föltétlen s helyzetök által
korlátozott; de épen nem kényszer. Ha nem azt tennék, a mit
tesznek, nemcsak az istenit, hanem az emberit is megtagadnák
magukban, s ekként a szabadság nem értelmezhető.
Szabad elhatározásuk, küzdelmes pályájok, megrendítő végök:
mindez erejök bizonyítéka. Mértéke pedig ennek az erőnek: a
legyőzött ellenállás. Az ember erkölcsi és anyagi erejét,
tehetősségét amaz akadályok nagyságán mérjük, melyeket legyőzni,
meghódítani képes. A magyar hitrege szerint az elejtett ellenségek a
másvilágon szolgáivá lettek a hősnek: erejének tanúi, vitézségének
bizonyságai, fenségének hirdetői gyanánt vették őt körül. A szemben
álló erőknek egymás mértékeül felhasználása: a művészetnek
legrégibb és legáltalánosabb gyakorlata. Miért festi a költő oly
hatalmasnak Szulimánt, oly rettenetesnek Viddint? Hogy mértékét
szolgáltassa bennök azok erejének, a kik legyőzték őket, s Zrínyit és
Árpádot annál fenségesebbnek tüntesse föl. Az eszme, melyet az
ember lelkébe fogadott, a czél, melynek valósítását maga elé tűzte,
felkölti indulatait; az ellenállás, melylyel találkozik, tüzeli, fokozza,
elhatalmasítja őket. Az akarat szenvedélylyé hevűl az eszme
szolgálatában, melynek megőrzésére törekszik, érvényesítéseért
küzd az ellenséges viszonyokkal szemben. A szenvedély, mely
bizonyos erkölcsi czél érdekében az embernek egész lelkét eltölti s
minden nyilatkozását áthatja: a páthosz. Az erő, melyet
képviselőjével, harczosával az eszme végetlennek,
legyőzhetetlennek éreztet. Ily páthoszt fejez ki Szent Katalin vértanui
hűsége és Antigone testvéri szeretete, Luther fenséges haragja és
Lear király megrázó keserve, Zrínyi imája és Coriolan átkozódása.
Hegel tartózkodik a páthoszt szenvedélynek mondani, mert ennek
fogalmába szerinte mindig valami alacsony, sekélyes vegyűl.
Azonban magyarázata és példái mégis oda vezetnek, hogy alig
érthetünk alatta egyebet, mint erkölcsi czélért munkás szenvedélyt.
Az istenektől, kik ha harczolnak is, nem komolyan teszik s
czivódásuk mindig inkább szimbolikus jellegű, épen nyugalmok és
szenvedélytelenségök miatt tagadja meg a páthoszt. Hogy ellenben
a görögök mennyire szenvedélynek értették a páthoszt, tanúsítja
Longinusnak egy helye, melyben így festi a pathetikust: «Homér az
Iliászban úgy ront be a csaták zajába mint a szélvész, akár maga
Hektor, ki a láncsavető Areshez hasonlóan dühöng; vagy mint a
hogy a pusztító tűz tombol a hegyeken, az erdő fái közt; ajakát tajték
fogja körül.» Ime együtt, egymás által jellemezve, a költőnek és
hősének páthosza.
A mondottakból lássuk az összevonó következtetést. A belső
szabadságon nyugvó erő, mely a szenvedély hevével tör czélja felé,
szóval a páthosz, uralkodó tényezője és jellemző kifejezése ama
fenségbeli kiválóságnak, mely a tragikum egyik alapvető eleme.
V.
Az egyéni kiválóság öszhangban az

egyetemessel.
A fenségbeli kiválóságot képviselő erő, mely a páthosz alakjában

jelenik meg előttünk, a végetlenre való törekvést jelenti. Épen ez a
törekvés az, a mi fenségessé emeli. Horwicz a fenség fogalmából
azt következteti, hogy a lelkileg fenségesnek mindig egyszersmind
tragikusnak kell lennie. «Mert, azt mondja, ha a szellemi tartalom
nem sértené meg alakját (körülmények, viszonyok, szokás, jog),
hanem vele egyensúlyos maradna, nem esnék a fenség
kategoriájába, hanem a szűkebb értelemben vett szépébe vagy a
méltóságéba.» Látni való, hogy e felfogás egyrészt a fenségnek
kisebb körre szorításából ered, másrészt czáfolatát találja a fenség
fogalmi ellenmondásának szubjektiv megoldásában, melyre annak
idején röviden rámutattunk. Bár ennélfogva a kifejtett módon
nyilatkozó fenség reánk is szükségkép a végetlen benyomását teszi,
még nem hozza kikerűlhetetlen összeütközésbe az általa kiváló
egyént az egyetemessel. Az eszme, mely lelkét betölti, pályáját
kiszabja és páthoszát sugallja, lehet épen az általános tökéletesség
eszméje. Egyességét ennek áldozhatja, ebbe olvaszthatja be;
föltétlenűl hódolhat neki. Törekvése, irányában épen azt az
elismerését juttathatja kifejezésre, hogy minden erejét neki köszöni
és neki ajánlja föl. Egész pályája megadás előtte, valamelyik
uralkodó hatalom előtt, melyek összesége alkotja az egyetemest:
erény, vallás, család, haza, igazság, emberiség. Képviselheti ezeket,
érvényesítésökre törekedhetik, a nélkül, hogy egyikök kedvéért
megsértené a másikat vagy a többit. Diadalt arathat vagy elbukhatik;
de bukása inkább teljes megdicsőülés, a tökéletessel való tökéletes
egyesülés, mint romlás.
Hunyadi János egész életét a keresztyénségnek és hazájának
szentelte; ezek eszméjét képviselve, hit és hazaszeretet által eltöltött
lélekkel, haladt negyedszázados hadvezéri pályáján diadalról
diadalra. Midőn haditetteinek legfényesebbike, a nándorfehérvári
védelem, után haldokolva vett búcsút fiaitól, ily szavakat ejtett: «Az
örökség, melyet rátok hagyok, isten félelme s a haza szeretete;
minden egyéb, a mi halálom után osztályrészetekűl jut, hivságos
adomány, melyet a szerencsétől nyertek, nem tőlem.» Íme e
szavakkal egész fenséges életének zászlaját hódolattal hajtotta meg
az isteni előtt: csak azért tett s csak annak végtelen erejénél fogva
tehetett mindent. – Calderon Fernando herczege a hit védelmében,
harczában esik a fezi arab király rabjává, ki váltságáúl Ceuta
várának átadását kivánja pogány kézre. Duarte, portugál király,
halálos ágyán meghagyja, hogy e váltságdíjat azonnal fizessék le.
Azonban Fernando méltatlannak tartaná magához, hogy
szabadságát a keresztyénségnek bár csak részleges és ideiglenes
hátratételével szerezze vissza. Szabadítójáúl érkezett testvére
szavaira felkiált:
Most király, testvér, ti mórok,

Keresztyének, nap, hold, csillag,
Menny, föld, tengerek, fuvalmak,
És a halmok és vadak,
Mindenek tudják meg: ím egy
Állhatatos fejdelem
Kész katholikus hitét
Dicsőítni és az isten
Törvényének meghajolni.
Az egész mindenség legyen tanúja hűségének az elvhez, melyet ő a

mindenség uralkodó eszméjének érez. Összetépi a felhatalmazást s
nyomorúlt rabságban vész el. De halála csak megdicsőűlés,
egyszerű átmenetel az istenibe, melynek, azonnal kimúlta után,
mintegy részeűl, kijelentésének megfoghatatlan tolmácsáúl jelenik
meg, mint a pogányok ellen érkezett keresztyén sereg szellem-
vezére. A kezében tartott fáklya az isteni világosság jelképe.
Egy lépéssel tovább menve, a páthoszszal nem mint állandóan
hódolóval, hanem mint meghódolttal találkozunk. Ideiglenesen
összetűz az egyetemessel, valója gyarló oldalának felülkerekedése,
szívének elbizakodása, szemeinek vaksága miatt. Feltámad ellene,
kiszakítva magát az általános öszhangból, minden erejének
megfeszítésével küzd vele s maga ellen zúdítja. De az ellentétesség
elvét nem képviseli a végsőig: megtér. A szenvedés téríti magához,
melyet fejére idézett, mikor közte és törekvése közt megtalálja,
felismeri az összeköttetést. A szenvedést méltó büntetésnek, az
áldozatokat megérdemlett lakolásnak tekinti s forrásukat jogosnak
ismerve el, törekvését megváltoztatja, az egyetemes tökéletesség,
az isteni felé fordúl, ennek szolgálatába áll. Egy új eszmének lesz
képviselőjévé. Pál apostol legendája példázza ez átalakulást. A
keresztyének ellen dühöngve, az istenség és emberiség törvényei
ellen bősz gyűlölettel indúl Damaskusba. A város kapui előtt elveszti
szemevilágát s csak három nap múlva Ananiás által nyeri vissza. E
jelenetet ábrázolja Dorfmeister szép képe a szombathelyi
székesegyházban. A csapás megrendíti Pált, ki lelki vakságából is
megszabadúlva, az új hit leglelkesebb apostolává lesz. Egészen
ebben a szellemben fogja föl a legendát Michel Angelo freskója a
vatikáni Capella Paolinában. A kép már rendkívül meg van rongálva,
de régi rajzok és rézmetszetek szerencsére megőrizték a
kompoziczió teljességét és részleteit. Az apostolt épen nem a
mennyei jelenés elragadtatásában tünteti föl. Megvadúlt lova
levetette hátáról s ő, a legnagyobb gyötrelem kifejezésével, kínlódva
és tehetetlenűl hever a földön. Társai körülötte föl akarják emelni s
egyszersmind védelmezik magukat. Nemcsak isten csodáját, hanem
isten itéletét ábrázolja a kép. A felhők között Krisztus, hatalmas
angyal-alakoktól körülvéve, mint valami királyi sas. A szenvedély
erejével lő alá ellenségére és sújtja porba őt. Erő, mely fényeskedik
és világosít, de büntetve. A megtérítés eszköze: a csapás.
Tágasabb körben ily jelenséget éreztetnek velünk a magyar
közviszonyok a mohácsi vész után. A vad szenvedélyek tusája,
pártoskodás, erkölcsi sülyedés közt, az országot sújtó csapásokat,
az idegen hódítást, köznyomort igazságos itéletnek, méltó
büntetésnek hirdeti a nemzet lelkiismerete, mely a prédikátorok és
költők, Tinódi, Balassi, Károli, Magyari és társaik által nyilatkozik.
E felfogásból fakadt a Zrinyiász, mely a szigetvári hős halálát
engesztelő áldozatnak tünteti föl a nemzet bűneiért: a páthosz, mely
benne nyilatkozik, nem ellentétes, hanem öszhangzó az egyetemes
tökéletességgel. Mintegy a megtért, igazulást kereső nemzet megy
általa és benne, legnemesebb képviselőjében, önkéntes áldozatra.
Hogy a megtérés eseteiben a tisztán erkölcsi megoldás, azaz a
bocsánat és az egyén boldogulása, melylyel főkép az úgynevezett
érzékeny játékokban, de elvétve népballadáinkban is, találkozunk,
példáúl Molnár Annában, – hogy az ilynemű megoldás jogosúlt-e
mindenkor széptanilag is vagy sem, erről alább bővebben lesz szó.
Látszólag az Ember tragédiája is abba a körbe tartozik, melyben
épen mozgunk: a kiválóságnak szenvedések által való megtérítése
körébe. Ádám a végetlenre, a mindenhatóságra, a független
boldogulásra törekvésnek, az istentől való elszakadásnak képe.
Pályája bukásról bukásra vezeti, egészen a kétségbeesésig; itt
kénytelen érezni teljes tehetetlenségét: még meg sem semmisítheti
magát, mert mikor az Úr szerető szívet adott neki, vonzalmat
élettársa iránt, biztosította ezzel jövendőjét. «Uram, legyőztél!»
mondja s elismeri tévelygését. Kételkedése még ki-kitör; de
oszladozva a sovár vágyban és megható bizalomban, melylyel a
végetlenhez fordúl. Ez befejezése a drámának, mely voltaképen
csak Ádám bukásának története; kiengesztelésűl az Úrtól elszakadt
ember legyőzetését nyújtja. E legyőzetés, igaz, nem tiszta és
egyszerű bukás. Ádám magába fogadta az isteni félelmet, a
szeretetet, a szép iránti fogékonyságot, szóval a végetlen érzését;
de ettől vezettetve, ezt képviselve már nem Madách tragédiájának
hőse. Innen a sok elágazó magyarázat arra nézve, hogy mi váltotta
meg. Ádám története, a mint előttünk áll, valódi tragédia, azok közűl
való, melyeknek hőse, feltartóztathatatlan bukásában, elismeri az
egyetemes jogát magával szemben. Mint ilyen, az igazi tragikai
páthoszhoz utal bennünket. Maga Madách így fejezi ki egy, Erdélyi
Jánoshoz intézett levelében, műve alapeszméjét: «A mint az ember
istentől elszakad s önerejére támaszkodva cselekedni kezd: az
emberiség legnagyobb s legszentebb eszméin végig cselekszi ezt.
Igaz, hogy mindenütt megbukik s megbuktatója mindenütt egy
gyönge, mi az emberi természet legbensőbb lényében rejlik, melyet
levetni nem bir (ez volna a tragikum), de bár kétségbeesve azt tartja,
hogy eddig tett kísérlete elvesztegetett erőfogyasztás volt, azért
mégis fejlődése mindig előbbre s előbbre ment, az emberiség haladt,
ha a küzdő egyén nem vette is észre s azon emberi gyöngét, melyet
saját maga legyőzni nem bir, az isteni gondviselet vezérlő keze
pótolja, mire az utolsó jelenet küzdj és bízzál-ja vonatkozik.»
VI.
Az egyéni kiválóság meghasonlásban

az egyetemessel.
Az erő, mely az embert kitünteti s pályájában nyilatkozik, a

fenség színében mutathatja mint győzőt, mint kisebb erők leverőjét.
Ezeknek mértéke nagyobbnak tüntetvén fel magánál s mindannál, a
mire csak alkalmazható, fenségesíti őt. A rendes mérték fölé
emelkedés: a fenség. Az ilyen kiváló egyén erejét nyiltan az
egyetemesnek köszönvén, ennek is szenteli s megmarad
öszhangjában. Ennélfogva ez az erő, mely az egyetemest képviseli,
nem ennek végetlen hatalmán, hanem a vele szembenállók
tehetősségén, tehát mind természetöknél fogva alárendelt erőkön,
mérközik. Győz, de kisebb elleneken. Nem így az egyetemessel
meghasonlásba kerűlt egyén. Csak magára támaszkodik, erejének
forrása csak magában buzog. Páthosza a végetlennel száll szembe,
a legyőzhetetlen erővel: ezen méri magát. Mértéke tehát a
képzelhető legmagasabb. Erejét az ellenállás bátorsága,
szilárdsága, heve és kitartása, a végső bukás daczára is,
nagyobbnak, megrendítőbbnek, fenségesebbnek érezteti, mértéke
magasabb voltánál fogva, mint a minőnek az egyetemest képviselő
egyénét érezzük. A csúcs, hol ez győztesen védi magát, nem látszik
oly magasnak, mint a melyre amaz feljutott s a honnan alábukik. «Az
istenekhez méltó látvány egy hős férfi küzdelme a sorssal», mondja
Seneca. Íme az alap-különbség az époszok és tragédiák hősei közt.
Firduzi Rusztemje kétségkívül fenséges, mikor minden embert
meggyőz; de Prometheus fenségesebb, mikor a leghatalmasabb
istennek is ellene bír állani.
A különbséget érdekes példában mutatja a szendrei névtelen
históriája Szilágyi és Hajmásiról. A két ifjú a török császár
tömlöczében sínylik, honnan a szultán leánya szabadítja meg őket.
A kobzos Szilágyi vette meg szívét, s az ő kedvéért segíti a
«kenyeres pajtások» szabadúlását, kikkel maga is velök indúl
Magyarország felé. De a császár üldözőbe véteti vajdáival a
szökevényeket, s a török tábor nyomukba is jut. A névtelen igen
röviden emlékezik a kifejlett harczról; a rokon tárgyú székely
balladák, még pedig mind a Szabó Károly, mind a Szabó Samu
által közölt változatok, részletesebben, hatalmasabb vonásokkal
írják le. A két vitéz győztes marad a harminczadosok, majd meg az
egész tábor ellen, melyből csak egyetlen élő jut vissza urához
hírmondónak: a naiv képzelet mily fenséges világításba állítja a két
leventét, mily erősen veti meg a tragikum ágyát! A mesés diadal
után, a hogy elérének az ország határához, előáll Hajmási, hogy ő
nem engedi pajtásának a szép leányt, hanem vívjanak meg érte. A
szenvedély, mely benne ébredt, bűnös volt: őt odahaza jámbor
hitestársa s két szép fia várja. Megharczolnak; Hajmási elveszti jobb
kezét s talán életét is. Vörösmarty és Gyulai feldolgozásában
elesik; ott leli temetőjét. Így kell történnie. Az igazság Szilágyi részén
van. Őt szereti a lány s neki szabad szeretnie; e szerelem az isteni
segítség eszköze, mely börtönük ajtaját megnyitotta. Hajmásinak mi
joga sincs hozzá, csak az, a mit hősisége ad, melylyel
megvédelmezte, s szenvedélye, melylyel magának kivánja. E
szenvedély azonban, mely elfeledteti vele övéit, meghasonlásba
keveri az egyetemessel, mely a család jogát, az eskü szentségét
őrzi. Úgy érezzük, mintha Szilágyi karját ellene egy felsőbb hatalom
is támogatná; mintha e küzdelemnek nem is lehetne más
kimenetele, mint Hajmási veszte. S mégis nem Hajmási hat-e ránk
erősebben; nem az ő szenvedélye illeti-e mélyebben szívünket; nem
magasabbra állítja-e őt képzeletünkben ez a győzhetetlen indulat s e
kétségbeesett küzdelem, mint isten-segítette ellenfelét?
A benyomás, melyet e historia két hőse gyakorol ránk, elég
elevenen éreztetheti velünk, legalább alapjában, a különbséget: az
egyén között, ki az egyetemes öszhangjában maradva harczol s
kivívja igazát, és ama másik között, ki harmoniájából kiszakítva
magát, vele meghasonlik s saját vesztére tör. Az epikai és tragikai
jellem, melyekről utóbb részletesebben is meg kell majd
emlékeznünk. Amott a hős a mindenhatóság segítségével áll helyt,
emitt a mindenhatóság ellen. Amaz elismervén, hogy kiválóságát az
egyetemesnek köszöni, hódol egy magánál magasabb erő előtt; ez,
saját erejét végetlennek tartván, hódolatot követel, mely csak az
egyetemest illeti meg. Amaz egyéniségét beolvasztja az általánosba,
tökéletességét csak ennélfogva érzi sikeres erőnek, az egyetemes
világosság egy sugarának; ez magát akarja azzá tenni, föléje kerűlni
mindennek, saját bélyegét nyomni az általánosra. Ő is csak az
egyetemesben foglalt valamely eszmét, hatalmat képvisel: Oedipus
a kérlelhetetlen lakoltatást, Romeo és Julia a mindent felülmúló
szerelmet, Bánk és Petron Maxim a boszú jogát a becsületen ejtett
sérelem miatt. De ezt a hatalmat aztán úgy képviseli, hogy minden
mást semmibe sem vesz, elemészteni s szétrombolni törekszik. Egy
bizonyos tekintetben nem ismer urat maga fölött. Üdvét nem az
öszhangban keresi, melyből kiszakítja magát, hanem az
öszhangtalanságban, mely fölött tehetetlen s a melyben el kell
tévednie és vesznie. A maga képére akarná átteremteni a világot, a
mely jól meg van teremtve. Ez a korlátlanságra való igyekezet, ez a
törekvés: az egyéni akaratot, érzést, czélt, tudást egyetemes
érvényre emelni, általánossá tenni s mégis egynek maradni: ez a
fenségi eleme minden igazán tragikai jelenségnek.
Már a gondolat ébredése a fenség tényezőihez, nagysághoz és
erőhöz, van kötve: a nagy költők tudják, mily szoros
összeköttetésben van ezzel a tragikai benyomás. Macbeth
diadalittasan közelg a fifei csatából. Hogy mit tett ott, elmondja
Rosse thán:
A norvég király maga

Töménytelen haddal s az áruló
Cawdori thántól támogatva, kezdé
A bősz csatát; míg Macbethünk szilárd-
Bizton, Bellona vőlegényeként,
Csapott reája, nem alább való
Erővel; ott kárt kárra, bősz aczélt
Aczélba vágva, megtöré azok
Kevély daczát; – egy szóval a miénk
A győzelem.
Így jelenik meg Macbeth, a győztes hadvezér dicsőségében,

hatalmával és nagyságában, Fores alatt, hol a boszorkányok s
ezekkel a nagyravágyás szédítő gondolata feltünik előtte. Mily
emésztő, mily vészterhes és fenyegető fájdalom az, mely Hamletnek
legelső monologjában borong! Bánk bán épen országjárásból tér
meg az udvarhoz s egy egész elnyomott nemzetnek fojtott
kétségbeesését rejti lelkében: belegyűlt mintegy mind az az erő,
mely országszerte kitörni készűlt az idegen, zsarnoki és tobzódó
udvar ellen. Mennyivel erősebben ragadja meg lelkünket már e
mozzanat által, mint Teleki hőse, kiről megjelenésekor csak annyit
tudunk, hogy derék senator, jó konyhát tart, fiatal felesége van s
olykor bölcselkedni is szokott.
Így van már a tragikai kitámadás gondolatának megszületése is
mintegy a fenség tényezőihez kötve, melyek aztán még
megragadóbbnak mutatják az egyén fenségbeli kiválóságát a kihítt
és kitartott küzdelemben. A gondolat első megvillanásától,
küzködésén át, egész romlásáig kísérik az embert. A bukásban ép
úgy megőrzi és kifejezi magát kiválósága, mint pályájának bármely
mozzanatában. Tragikuma fenségében született, fenségében hal.
Tragikai hős nem veszhet kisszerűen, megernyedt akarattal s nem
alkudhatik gyáván a halállal, mint valami kivégzett gonosztevő. Ez
lealacsonyúlás lenne s ő utolsó lehelletéig nem lehet hűtelen saját
nagyságához. Hogyan halnak Rikhárd és Macbeth? Mindketten a
csatatéren hullanak el. Amaz a harcz dühének elragadtatásával,
sárkánymérgével, mint tajtékzó véreb; emez hősi fölemelkedéssel,
iszonyodva a megadástól s e pillanatban legyőzve még életének
egyetlen kínzó gyöngeségét, a gonosz jelektől való babonás félelmet
is: szembeszállva a megindúlt birnami erdővel s a nem-anyaszülte
Macduffel. Coriolan és Othello, mintegy felmagasztosúlva önmaguk
fölé, maguk mondják ki s hajtják végre halálos ítéletöket. Shakspere
szereti a tragikai hősök bukását az általános romlás szó-képével
fejezni ki s nagyszerűségét ezzel is éreztetni. Midőn Octavius hírt
vesz vetélytársa elvesztéről, ily szavakban tör ki:
Antonius halála
Nem egyesé; e névben a félvilág
Feküdt.
Julius Caesar megöletésén pedig így keserg Antonius:
Nagy Caesar elesett.

Oh mily esés volt az, jó honfiak!
Elestem akkor én, ti, mind,
Míg véres ármány kérkedett felettünk.
A tragikai veszedelem e megrázó képeivel szemben mily

kisszerű Ponsard Galileijének bukása, ki családja érdekében
megalkuszik a szent inquiziczióval, fejet hajt előtte s legalább életét
vásárolja meg szabadsága árán. Nem érezteti a megtérésnek
fentebb említett megnyugvását sem, mert voltaképen nem térhet
meg: a hatalmat, mely előtt meghajlik, jogtalannak kell tartania.
Bukásának módja, körülményei nem erejét, hanem gyöngeségét
teszik nyilvánvalóvá.
Az emberi lelket eltöltő érzések, gondolatok, erők különfélesége
szerint az egyénnek korlátlanságra törekvése is igen különböző
irányú és tartalmú lehet. Érzelmeink és gondolataink közűl sok
hatalmasodhatik el a többi fölött, hathatja át egész valónkat s
törekedhetik ez által egyetemes érvényre. Az általánossal
meghasonlott s vele szembenálló egyéni páthosz ennélfogva
számtalan változatot, módosulást, eltérést, fokozatot mutathat. De
valamennyi nyilatkozata, különféleségök daczára is, két fő osztályba
sorozható, melyek közűl az egyik magát az akaraterőt, másik meg
az érzést tünteti föl korlátlanságra törekvésében s az egyetemessel
meghasonlásában.

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Vanishing Borders of Urban Local

Finance: Global Developments with

Theorising Urban Development From the Global South

Guide to Local Government Finance in California

Environmental Health: From Global to Local (Public

Land finance dependence and urban land marketization in

Global Urban Heat Island Mitigation Ansar Khan

Foundations of Finance, Global Edition 9th Edition,

Fundamentals of Corporate Finance, 5th Global Edition

Gun Trafficking and Violence: From The Global Network

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