Unformatted text preview: the mechanisms governing
how they operate.
In Spain, two communities operate under the foral regime, giving them considerable autonomy and virtually total control
over tax collection. The 15 other ACs operate under the common regime but, within the common regime, the ACs have
various degrees of autonomy. They all converge towards the same model in this regard, but at different speeds, adapted
to each one’s situation.
The merger of the Flemish executive and legislative bodies (Region and Community) gives, as Marcel Gérard points out,
an asymmetric cast to Belgium’s federal system. There is a single Flemish government but there are two Frenchspeaking governments, that of the French Community in Brussels and that of the Walloon Region in Namur.
In the United Kingdom, the devolution process has advanced further for the Parliament of Scotland than for the
Assemblies of Northern Ireland and Wales. “Asymmetric devolution is, in part, a response to the inherent asymmetry of
the United Kingdom,“ as is pointed out by David Heald (p. 266). In Italy, special regions (islands and alpine minorities)
are distinguished from ordinary regions, with the former being more autonomous in setting their spending. Lastly, in
France, Corsica receives special funding (the dotation-Corse). 3.5. Operating Terms of Intergovernmental Transfer and Revenue Sharing Programs
As we have seen, federations generally stipulate formal mechanisms for the participation of federated states in deciding
intergovernmental fiscal arrangements. Looking beyond the institutional mechanisms, how are the transfer amounts set,
how are they distributed among federated states and how can their growth be forecast?
In the federations studied, the authors’ remarks lead to the following general observation: intergovernmental transfer
amounts are generally set using objective mechanisms that contribute to reduce the federal government’s scope for
arbitrariness in their determination. The overall envelope provided under a transfer program is either set by a formula,
determined according to needs, based on an amount provided in the past and subsequently indexed or depends on the
yield of a tax. The transfer amounts are then distributed according to criteria that reflect needs or seek to achieve
redistribution objectives. Lastly, funding agreements apply over a relatively long period, affording a measure of funding
In Germany, the operating terms of transfer programs feature a high degree of transparency in financial relations among
governments. The rules of the vertical sharing of the proceeds of shared taxes are written into the Constitution (personal
and corporate income tax) and in federal legislation that requires the approval of the governments of the Länder,
ensured through their presence in the Bundesrat (for the VAT). The federal transfer envelopes are then passed by the
18 10 Excluding the two foral regime ACs that collect essentially all the tax revenue generated within their territory.
In this r...
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