Οι νέες σχέσεις κεντρικού και τοπικού δημόσιου τομέα με αφορμή τον περιορισμό των κρατικών επιχορηγήσεων και την αύξηση των τοπικών φορολογικών εσόδων

Abstract

The aim of this paper is to study the new type of relationships formed between central government and local authorities. During the 1980’s many European governments, in the context of stabilisation policies, aspired to reduce the political-economic size of the local authorities. We use a sample composed of the government policies of Austria, Denmark, the Netherlands, France and Finland, in 1979-1992. The study is conducted in the framework of political and partisan cycle theories. We find evidence that the behaviour of local authorities differs from central governments. First, local authorities’ spending has not been reduced to the level desired by the central government. On the contrary, the local fiscal resources have been increased, which in turn has caused inflation increases. The result is a disagreement between the central government and local authorities and a deviation from the objectives of stabilisation policy. We show that when local authorities and the central government disagree about a number of policies, then deviations from the purposes of stabilisation policies can also arise. We believe that Local Authorities have the political and economic strength, flexibility and willingness to participate in economic and political planning. This is a very important element for Greece. Greek local authorities do not have the autonomy or the fiscal freedom which their counterparts in other European countries have. However, when the aim to participate in the EMU will be achieved, then a more effective relationship between the Greek central government and local authorities will be forged.