1. INTRODUCTION Local government across the developed world has experienced mounting fiscal stress over recent years. While the causes of this financial pressure differ between different local government jurisdictions, they are often a consequence of vertical fiscal imbalance between the different tiers of government, a limited local tax base and externally imposed restrictions on local revenue-raising activities (see, for instance, Dollery, Garcea and LeSage, 2008). Even greater similarities exist in the consequences of fiscal distress, with the burden of scarce financial resources falling primarily on local government infrastructure rather than on service provision (see, for example, Shah, 2006a; 2006b). The net result has typically been insufficient funding in local infrastructure investment, maintenance and renewal as well as the development of local infrastructure backlogs of varying degrees of severity.