First, SNGs must have a strong base of own-source financing. Treating these regions and cities under a different transfer regime and granting them more power to set and collect taxes and fees would be essential. If local agencies have instruments for managing local budget revenues, local borrowing for capital investment would be expedient (Makhmutova, 2006). If infrastructure is to be maintained and debt obligations are to be met, regional and city governments need to be able to control their level of budgetary resources.