We’ve seen before that Italian politicians don’t know much about the electoral systems of other countries. Now we see that they don’t know much about federalism in other countries either. According to Umberto Bossi,
“Senza il federalismo fiscale, c’e’ il rischio reale che il Paese diventi come l’Argentina…”
“Without fiscal federalism, there’s a real risk that this country will become like Argentina”
Of course - as a moment’s glance at Wikipedia would suggest - Argentina already has a system of fiscal federalism. One which is derided as inefficient.
Comments 3
I miss where Mr. Bossi “eliminates” Federalism - anywhere, in the quoted statement. Perhaps, you could have worked out a less inconsistent title for stressing Bossi’s ignorance on Argentina’s government system. On the other hand, what Mr. Bossi says is substantially correct within the constraints of a single statement. Italy and Argentina government systems share the property of allowing local administration spending out of money that comes from the Center in a centralized budget. This leads to irresponsible local spending, which is further aggravated when a large share of local administrations receive from the Center much more than what they contribute as taxes. A _proper_ form of Federalism where local spending must be financed locally would help both Italy and Argentina in improving their badly engineered government system.
Posted 06 Aug 2008 at 1822 ¶Well, he ‘eliminated’ federalism by imaging it (or forgetting it) away - but the headline was going for the joke as much as anything. I don’t have any strong views on whether regions should rely more on ‘own revenues’, but I think decentralised spending + centralised revenue raising is probably compatible with responsible spending as long as the central state makes it clear to the regions that it won’t bail them out. As one can see from, e.g., aid to the healthcare system in Lazio, that’s not going to happen any time soon.
Posted 06 Aug 2008 at 1856 ¶When local spending is financed by a centralized budget, local administrators compete to increase their regional public spending because, assuming 10 equal regions evenly contributing to the central budget, each 100 Euro of additional local public spending in one Region corresponds to just 10 Euro increase in local taxes in the same Region. Due to such ill engineered incentives, public spending tends to be sub-optimally excessive. Given clever and honest enough central rulers (which Italy lacks more than the rest of the World) any ill engineered government system can work, even bolshevik Communism. In real situations, it is wise to devise a government system that provides reasonably balanced incentives at all levels. For the case of local public spending, a significant correlation with local fiscal pressure is advisable to provide properly counterbalanced incentives.
Posted 07 Aug 2008 at 1820 ¶Trackbacks & Pingbacks 1
[…] segnala Chris Hanretty, l’Argentina ha già il federalismo […]
Post a Comment