Comparison of Fiscal Decentralization Systems in EU-27 According to Selected Criteria
Abstract
The paper deals with comparison of fiscal decentralization systems in EU-27 according to selected quantitative criteria and certain European Charter of Local Self-Government principles. The results of comparative analysis 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-27 countries is quite similar, the shares of funds for the implementation of individual tasks and competencies differ significantly from country to country. 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 equalisation 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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