Financing European Local Government by John Gibson & Richard Batley

Author:John Gibson & Richard Batley [Gibson, John & Batley, Richard]
Language: eng
Format: epub
Tags: Political Science, General
ISBN: 9780714645131
Google: uO48W-VGK0cC
Goodreads: 5557463
Publisher: Routledge
Published: 1993-01-15T09:14:54+00:00

Financing Communal Government in Italy

ANGELA FRASCHINI

Introduction

Italy is a unitary state based upon four levels of government: the central government (stato), the regions (regioni) (20 in number), the provinces (province) (95 in number at present) and the communes (comuni) (about 8,100 in number at present).1 While local government finances have long had a substantial impact on the citizens’ lives, local authorities are not free to decide their own financial arrangements by themselves: their expenditure responsibilities and their revenue sources are fixed by national laws. The distribution of expenditure functions among the different levels of government has changed through time. During the 1970s the role of territorial authorities (regions, provinces and communes) became stronger with the creation in 1970 of 15 ‘Ordinary Regions’2 (which were already foreseen in the Constitution of 1948 but not in force up to that time) and with a large transfer of functions from the central government. In the 1980s there has been an increase in central government expenditures as a percentage of total public expenditures (see Table 1), as a consequence of the transfer of the local government’s debt service at central level.3

In the last two decades the role played by the central government has increased especially with regard to the revenue side. In fact, the financing of local government was profoundly altered by a general reform of the Italian tax system which was introduced in the early 1970s.4 One of the main changes was the considerable reduction of local tax autonomy: from 1972 (the last year before the tax reform) to 1974 (the first year of the new system) the tax revenue of local government declined from a peak of 15 per cent of the total tax revenue5 to 6.3 per cent and this reduction has continued in the following years (see Table 2). Consequently the share of local expenditure financed by transfers increased (see Table 3).

In this paper I shall deal only with the finance of the communes, because they, rather than the provinces, perform the more important functions and have the biggest share of local spending (net of grants) and revenue. In contrast, the finance of regions is almost completely

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