Read the following passage carefully:
The fiscal architecture of emerging economies often exhibits a structural paradox between political decentralization and central financial retention. While subnational governments are increasingly entrusted with primary service delivery—ranging from urban infrastructure maintenance to public health administration—their revenue-generation capabilities remain severely constrained by rigid national tax frameworks. Consequently, municipal entities are forced into chronic dependence on central fiscal transfers, which are frequently subject to political discretion and macroeconomic volatility. Proponents of subnational financial autonomy argue that granting local authorities direct access to municipal bond markets could alleviate infrastructure deficits by mobilizing private capital. However, uncritical capital market access risks exacerbating regional inequalities, as wealthier urban centers possess far greater creditworthiness than agrarian municipalities. Moreover, without robust local institutional capacity and transparent debt auditing mechanisms, market-based municipal borrowing can induce systemic fiscal slippage, ultimately requiring costly national bailouts. Therefore, achieving sustainable municipal infrastructure financing requires a calibrated sequencing strategy: strengthening local revenue administration and institutional transparency must precede the financial deregulation of municipal debt markets.
Which of the following statements best captures the central theme of the passage?
- Sustainable municipal infrastructure financing depends on prioritizing local institutional capacity and revenue reforms prior to permitting market-based municipal borrowing.Cevap
- BDirect access to municipal bond markets should be unconditionally prohibited because private capital borrowing inherently causes municipal fiscal collapse.
- CCentral intergovernmental fiscal transfers represent the only stable mechanism for eliminating infrastructure deficits across agrarian municipalities.
- DAgrarian municipalities face higher infrastructure deficits primarily because national tax frameworks restrict central transfer allocations to rural regions.