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20.09.2014.

The Financial Relationships between Regional and National Governments in Europe

A study on the financial relationship between national and regional government in Europe, with recommendations for best practice, using Austria as an example.

 
The Austrian System of revenue sharing is marked by vertical revenue sharing, i.e. taxes are
levied centrally by federal authorities, and afterwards the financial resources are distributed to subnational local authorities. A second horizontal distribution occurs on federal state-level, to the municipalities of the respective federal state.
 
This allocation of funds isn’t primarily task-orientated, but determined by demographic and
politico-economic factors. Therefore it doesn’t seem odd that the criteria of efficiency and
effectiveness of performance are eclipsed by the public sector.

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