Abstract

This journal article provides a comprehensive theoretical review of various models and theories that underpin local government financing. It explores the Principal Agency theory, the Theory of Fiscal Federalism, the Benefits-Pay-Principle theory, the Cost-of-Service Theory of Taxation, the Efficiency Service theory, the Intergovernmental Fiscal Framework, the Revenue Enhanced Model, the Benefit Model of Local Finance, the Modified Quantitative Service Delivery Model (MQSDM), and the Theory of Fiscal Federalism. The article examines the foundations, principles, and applications of these theories in the context of local government finance. By addressing the theoretical underpinnings of local government financing, this article contributes to a deeper understanding of the complexities and challenges involved in funding essential public services and infrastructure at the local level.