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The fiscal problems of large cities in developing countries have become a major national concern. Inadequate urban services may hamper productivity of urban workers and slow national economic growth; however, better urban services may pull urban migrants to cities adding to congestion and increasing the likelihood of urban unemployment. Many LDC governments are trying to establish public policy to deal with this dilemma. A necessary first step in this process is to better understand the financing structures and problems of large cities in developing countries. This paper fills some gaps in our knowledge of this subject.

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