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By Kyeongae Choe

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The existence, or potential introduction, of these types of enterprises is a sound basis for CCD. 1 Another major consideration is the presence of renowned institutions of higher education and research centers that can supply the human resources for energizing CCD. Taxation, Intergovernmental Transfers, and Fiscal Discipline In most Asian countries, local government units derive the great bulk of their income from internal revenue transfers and grants-in-aid from higher levels of government. While central and provincial or state governments may use such fund transfers to initiate CCD activities (for example, financing urban infrastructure and services), the lack of capacity of local government bodies to raise revenue is a barrier to CCD because sufficient funds for future operation and maintenance of those activities cannot be assured.

Regional waterworks or energy systems), working out a common system of taxation, or developing systems to improve the credit rating of cities within a cluster. Anti-urban bias among local officials can be mitigated by providing them with information that shows the positive correlation between higher levels of urbanization and higher levels of economic growth. CCD supporters may also share with officials key research results that indicate successful cases in which the urban and rural sectors are closely linked to achieve area-wide development.

Economic Growth Potentials and Trade Functions The lack of economic and trade resources in an area is a barrier to CCD initiatives. Obviously, city clusters that already have concentrations of economically robust industries and commercial enterprises are prime candidates for CCD because the authorities can build on these resources to accelerate economic growth. Examples of the types of enterprises that can be used to enhance CCD include information technology, high-tech research and development ventures, light industries, and manufacturing firms that use raw materials located in the area.

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