This preview shows page 1. Sign up to view the full content.
Unformatted text preview: entralization of Italy is provided. Paragraph 1 makes
a summary of the distribution of competencies on the expenditure side between the central and the regional level. A few
data are provided on the share of resources attributed to different layers of government and the ex-post distribution of
expenditure resources both by sector and economic category. The second paragraph deals with the level of
decentralisation from the revenue side and describes briefly the changes which have taken place in the nineties from a
system where local and regional finance were mainly dependent upon state transfers, mostly earmarked, to the greater
fiscal autonomy introduced in 1999 and 2001. The third paragraph tries to picture the actual level of financial autonomy
of the regions. The fourth highlights some of the limitation we encounter as part of a union. The fifth paragraph deals
mostly with the same issues seen from a different angle, that of the Mezzogiorno, or so-called Objective 1 Regions in
the European terminology.
We describe an important experiment of actual decentralisation of expenditures being carried out in the last three years,
the theoretical approach that was chosen to overcome the "gap" between the two areas of the country, financial
arrangements being used to transfer European and National funds to Objective 1 Regions and the balanced cooperative and competitive model applied to regions to spur on the one hand their capacity to link and develop common
projects and increase the competitiveness of their territories and, at the same time, expose them to competition and
"market" incentives. 250 Commission on Fiscal Imbalance 2. REGIONAL AND LOCAL DECENTRALISATION: THE EXPENDITURE SIDE
The definition of a new system of competencies was introduced with Act 59/97, better known as “Bassanini I”. Without
modifying the Constitution, Act 59 used all the space available to implement by ordinary law a large decentralisation of
functions. Indeed it reverses the traditional approach inherited from the Constitution of defining the competencies of
Regions, by defining on the contrary the competencies of the central state, leaving all other competencies to local
autonomies. The principle of vertical subsidiarity was fundamental: public activities were to be carried out by higher
levels of government only where they could not be carried out by lower levels (for example, due to managerial efficiency
or the impact of externalities). In relation to the distribution of functions among regions and local authorities, reference
was made to the “principle of differentiation, in which functions are allocated taking into account different characteristics
--associative, demographic, territorial and structural-- of the local authority”.
Matters of explicit national interest remained within the sphere of the State (external affairs and trade, defense, public
order and safety, justice, university and scientific research, large network infrastructure and heritage). Its implementation
decree (Decreto Legislativo 112/98) transfers around 40% of the administrative functions from the Minis...
View Full Document