The Inter-American Development Bank (IDB) has published a report that explores the Brazilian State of Paraná’s urban development fund in financing municipal infrastructure. The publication seeks to address two main questions: i) the success of Paraná’s Municipal Finance System (SFM) in financing infrastructure and institutional development and providing technical assistance, and ii) the SFM’s contribution to national economic objectives. The State of Paraná in Brazil has 11.3 million inhabitants residing in 399 municipalities.

The paper also examines the international experience with municipal financial intermediaries, identifies the essential conditions for the successful functioning of such markets, and subsequently applies these criteria to evaluate the SFM.

Finally, the paper suggests ways to increase the positive impact of the SFM in addressing infrastructure financing challenges and promoting sustainable urban development. The authors conclude that the SFM can provide additional incentives for municipalities to improve their financial performance by implementing changes such as incentives for improved.