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EU MEMBER STATES AND FISCAL DECENTRALIZATION– EMPIRICAL COMPARISON

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Author(s): Žan Oplotnik | Mateja Finžgar

Journal: IIASS : Innovative Issues and Approaches in Social Sciences
ISSN 1855-0541

Volume: 6;
Issue: 3;
Start page: 39;
Date: 2013;
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Keywords: fiscal decentralization | international comparison | EU-27 | local financing | local self-government | local expenditures

ABSTRACT
The purpose of an article is to compare systems of fiscal decentralization in EU member states according to selected quantitative criteria and European Charter of Local Self-Government principles. The results show that a higher number of lower levels of government usually indicate a greater share of local finance within the total public finance, however, this finding does not confirm the inverse link. Even though the structure of expenditures in EU countries is similar, the shares of funds for the implementation of individual tasks differ significantly. On average, the countries allocate most funds to education, social security, healthcare, administration and political systems, with only a quarter of the countries recording the same or higher amounts of revenues than expenditures. Most of the countries still cover the existing deficit either through transfers from the central to lower levels of government or through equalization schemes or borrowing, which otherwise represents a departure from one of the basic principles of the Charter, which stipulates that financial resources must be commensurate with the responsibilities of local self-government.

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