| Abstract | The main focus of this research is about recent role in mobilising local financial resources for local development at the Union Parishad (UP) in Bangladesh. The specific objectives of this study are to assess the revenue performance of UP, identification of possible additional sources, analysis of factors affecting UPs financial resources generation, assess the opinions of UP functionaries and local people regarding local resources mobilization, and finally to identify policy implications on UPs own resources generation and resource mobilization. This study has covered the UPs tax instruments, major causes of revenue differentials, revenue sources contribution and their impact on UPs own revenue generation and mobilization performance. Various constraining factors like, weak enforcement in revenue collection, lack of UP members commitment, lack of selfmotivated taxpayers, deficient inventory of local sources, restricted fiscal jurisdiction and revenue limitation of sources. While some facilitating factors affecting UPs resources generation like, UPs open budget discussion, discretionary block grants, performance linkage grants etc are also analyzed in this study. For this study, Three UPs cases are purposively selected from three different districts and Upazila (sub-district). Due to the paucity of data across levels, average annual revenueraising size is used to classify three cases as High Revenue Performing (HRP), Moderate Revenue Performing (MRP) and Low Revenue Performing (LRP) UPs that covered five years (2002/03-2006/07) period of time. Primary data for the cases are obtained from UP functionaries as key informants, local people relevant Upazila, District and Ministry officials and national experts. Secondary data are obtain from offices of UPs, Upazial and Zila Parishad documents including from other published reports, previous studes and existing regulation and policy. Qualitative data in the form of opinions are used to complement the quantitative analysis. Findings show that UPs revenue collection has substantially improved over the five years (2002/03-2006/07) though tax and fees collections are still in embryonic stage and confined to prescribed sources. While the recent improved revenue collection performance is in part due to some efforts of UP officials and for the provision of untied block grant, performance grant including local people's participation in participatory planning and budgeting. This study also finds that UPs revenue differentials are related to fiscal capacity and fiscal efforts while geographic, demographic and socio-economic attributes of the jurisdictions are also liable for revenue variations. Overall, it is evident that total revenue generation and resource mobilization performance has got momentum though it is yet to show the satisfactory level of performance when compared with the existing revenue potential. UPs existing and possible revenue sources have revealed that there are huge unreported revenues including possibilities of enhancing considerable revenues from some legitimate additional sources. However, some real barriers need to be addressed which are related to disparities in central allocations, weak local and central support for local revenue administration, imperceptible coordination of higher tiers transfers, external political interference, weak enforcement for revenue collection, lack of UP functionaries training and skill base, low accountability, lack of political commitment, scarcity of UPs own fund for capacity building and weak utilization of given revenue authority etc. lll It is evident from the study that for the longer term, to fulfill the basic local development needs by the UPs own revenue is difficult if there no strategy and policy to pursue UPs own resources generation as well as central government fiscal and non-fiscal support. Thus, this study suggests that in the shorter term, greater possibilities for UPs own resources expansion depends either from the exploration of local revenue within limited bases of local revenue sources with a simultaneous policy to increase UPs share from the shared revenue or providing a realistic share from national revenues through different grant mechanisms. The grant mechanism strategy should be concentrated to put UP into the force for revenue-raising from own resources for local development. However, this study is concluded with the identification of some policy implications that are necessary both from UPs and central government sides indicating different time frame like, short term, medium term and longer term policy implications. From UPs side, strategy and local policy should include accurate assessment and collection of taxes and fees, tapping umeported revenue and revenue from additional sources, enforcement for collection, enhancing revenue raising capacity, mobilisaiton and sensitization for local local participation with real political commitment. On the other hand, for central government side, policy implications are needed for objective based clear incentive to be provided for resources mobilization, untied block grant and local shared revenue need to be adjusted to augment UPs own revenue, training for UP officials for fiscal capacity building, establishment of a neutral and objective based performance measurement system, development of local coordination mechanism among local actors (like, local citizen, sectoral departments, agents of the line ministry, NGOs and community based organizations). Finally, it is expected that the convergence of local and central governments strategy and policy only can promote local resources mobilization with a clear matching of functional and revenue assignment. Any significant future policy measures to empower UPs will enhance local financial resources and local development. Thus, concerted efforts, across levels, are necessary for the identified structural and operational lacuna and to overcome the real barriers in mobilizing local resoruces for local development, especially, in the rural local governments in Bangladesh. |