220.127.116.11 Localisation Within a Country
If infrastructure and public services are locally managed, it should be possible to make them more responsive to local needs – though there are problems:
- For a service to be considered autonomous it would have to be able to control both its income and its spending. Without such autonomy it is difficult to fully incentivise good management practice. A local council could be held accountable if it raised all its own taxes, but there are some services which have to be co-ordinated across wider areas and which have a national element – like law enforcement, for example (2.8.5). It is almost impossible to get an alignment between the management of the activities that are spending public funds and the control of their income, which comes from taxation.
- If all taxes were raised at the same level of subsidiarity as the spending, there would be a large disparity between rich and poor areas in the amount of tax they were able to raise. It is therefore impossible to have financial autonomy at different levels of subsidiarity whilst also having equality of services in different parts of a country.
The policy decisions on these questions are made in the Political Dimension (6.6.2), which is appropriate because they have a considerable political impact.
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