The World Bank’s Urban, Subnational Finance, Tourism, and Disaster Management Global Department, through the Tokyo Development Learning Center (TDLC), is organizing a Technical Deep Dive (TDD) on Fundamentals and Innovations in City Finance from Monday, March 9 to Friday, March 13, 2026, in Tokyo, Japan. This TDD will be delivered in collaboration with the International Finance Corporation (IFC). Approximately 50 policymakers and practitioners engaged in municipal finance from 10 World Bank client countries are expected to participate in this TDD.
With more than half of the global population now living in cities—a proportion that continues to grow as urbanization accelerates—sustainable access to finance for cities is more critical than ever. This is particularly true for cities in low and middle-income countries, which are rapidly urbanizing and experiencing expanding financing needs. A sustained increase in urban infrastructure investment is essential to enable economic growth, improve quality of life, and build resilience to the anticipated impacts of climate change. However, cities face substantial obstacles in mobilizing the necessary finance to meet these needs. Resulting in a considerable financing gap.
Many countries have initiated decentralization processes with varying degrees of progress and success. Some reforms attempt to clarify responsibilities without adequately addressing fiscal challenges, while others assign new responsibilities to municipal governments that lack sufficient capacity to manage them. Concurrently, municipalities are becoming increasingly dependent on intergovernmental transfers. To overcome these challenges, it is crucial for cities to have access to global knowledge and to be part of a larger community of practice that discusses these issues and shares lessons learned.
TDLC has consistently identified municipal finance as a priority theme. Following the TDD on the same topic held in April 2025, this edition will once again focus on the fundamentals and innovations in city finance. Drawing on the experiences of the World Bank, IFC, Japan, and other countries, the program will facilitate knowledge exchange on improving the financing of urban infrastructure and service delivery.
Japan has strong knowledge and expertise in this field, making this TDD particularly relevant to be hosted by TDLC. Local governments in Japan account for approximately 40 percent of total national tax revenues, reflecting a high degree of fiscal autonomy. In addition, Japan has a large and active municipal bond market, with the private sector serving as a major source of financing. The country also maintains a stable system of intergovernmental fiscal transfers funded through shared tax revenues.
By balancing central government oversight with local autonomy, Japan has combined fiscal discipline with market mechanisms, offering valuable insights for strengthening municipal finance systems globally. For example, cities such as Toyama, which has pursued efficient fiscal management under tight revenue constraints, and Fukuoka, which has expanded its tax base through proactive urban investment, provide practical lessons. This TDD will connect these Japanese experiences with global dialogue.
The TDD will cover the following key topics:
City financing frameworks and expenditure management
Intergovernmental fiscal transfers
Own-source revenues, including land-based financing and land value capture
Leveraging private and commercial financing and strengthening municipal creditworthiness
Through the five-day program, participants will develop actionable plans to improve municipal finance systems and strengthen investment strategies in their home countries. The TDD aims to share practical knowledge to help cities build robust fiscal foundations and achieve sustainable and resilient urban development.