Incluye bibliografía

Executive summary -- 1. Introduction -- 2. Assignment of responsabilities for provision of public services at the subnational level -- 3. Revenue assignment to improve efficiency and equity while maintaining fiscal discipline -- 4. Santiago metropolitan region: inter-governmental dependencies and management of metropolitan development -- 5. Management efficiency and accountability -- 6. Elements of a strategy -- Annex 1: Methodology and coordination with country economic and sector work -- Annex 2: Outline of an action plan for a financial management information system -- Statistical appendix -- Map (IBRD 20805)

Major reforms in the institutional structure and spending responsibilities of subnational governments in Chile are being enacted into law. The new legislation will make subnational governments a much more important part of Chile ' s consolidated public sector. Improving the efficiency of subnational governments is critical because they are becoming increasingly important providers of public services. As spending by these governments increases, their growing relative importance in Chile ' s public sector will increasingly affect efficiency, equity and fiscal discipline. This report addresses the issues of: the assignment of responsibilities for provision of public services at the subnational level, revenue assignment to improve efficiency and equity while maintaining fiscal discipline, inter-governmental dependencies and management of Santiago ' s metropolitan regional development and management efficiency and accountability. The report ends by discussing how the above issues must be addressed for the design and implementation of democratic reforms at the subnational level in order to increase (or at least maintain) macroeconomic efficiency, equity and fiscal discipline. Thus, the report views the issues as elements of a strategy that will promote Chile ' s public sector.