municipal finance theory

Municipal finance theory studies how local governments raise and manage funds to provide public services, such as roads, schools, and utilities. It explores the methods of revenue generation, like taxes and bonds, and how to allocate resources efficiently while maintaining financial stability. The theory emphasizes balancing debt and income, ensuring that borrowing supports growth without unsustainable risk, and understanding the economic impact of fiscal decisions on communities. Overall, it guides local governments in making informed financial choices to meet public needs responsibly and sustainably.