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Unformatted text preview: an extreme, indeed, simply exotic case.
I do not think so, since it strikes me that the de jure and de facto exercise of public financial power in France is (or at
least, was, until recently) much more decentralized than in many other unitary countries, including in the European
Union. The French public finance “model” undoubtedly primarily reflects the model described by Richard Bird in 1993 as
“multi-unit finance” or “fiscal federalism,” in which the central State is the principal and sub-central authorities are the
agents. However, there is more than that in the play between the central State in France and the authorities that would
compel us to consider a more diversified model in which, without going as far as the “multi-principals game” of “federal
finance” defined by R. Bird, account would be taken of strategic interactions that are more complete than those
underpinned by the principal-agent model.
In anticipation of the conclusion of this presentation, I also believe that the attempts to put public finances in order in the
EMU pose a genuine threat to local financial autonomy in France and are giving the central State the idea of financial
recentralization, because of which the existing system is subject to growing tension stemming from the adaptation of our
public finances to the demands arising from the signing of the Maastricht and Amsterdam treaties. Such tension is so
high that the future of the existing structure is in danger and, as a final paradox, France’s entry into the “common
European house” could serve as a pretext for a (re)centralization of the public finance system.
The first section is devoted to the paradoxes of the structure of public finances at several levels of authority in France.
The second section describes in detail institutional facets of local finances and intergovernmental financial relations to
explain the current state of decentralized finances. The final section will focus on future prospects in the form of two
opposed scenarios. 2. PARADOXES OF THE FRENCH “MODEL” OF DECENTRALIZED PUBLIC FINANCES A historic perspective suggests presenting France as an archetypal nation with a unitary, highly centralized government.
Under the circumstances, local authorities would only obtain a subsidiary place, always dependent on the centralized
authority. In other words, local autonomy, especially financial autonomy, would only be stingily counted and always
Applied to France, this commonplace is largely inaccurate. The financial autonomy of French local authorities is
extensive, effective, strongly supported by decentralization, and guaranteed by the political weight wielded by local
elected representatives in the parliamentary deputation. This autonomy is considerable both from the standpoint of the
mobilization of resources (taxes, transfers and borrowings) and the use to which resources are put. Compared with the
situation of authorities in other European Union member countries, such autonomy is, indeed, exceptionally strong
(Gilbert 2000; Gilbert and Guengant 2001a;...
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