The Assignment of Functions to Decentralized Government: From Theory to Practice

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Abstract
The question of why key academic economic arguments for the assignment of functions to decentralized government have not informed the political debate in Switzerland is examined in this paper. In the first section the most relevant theoretical factors of optimal government organization for service delivery are reviewed. A catalogue of criteria that have been debated in the Swiss context at both federal–cantonal and cantonal–local levels are covered in the second section. The main point is that the discussion is focused on rather different criteria from those noted in orthodox economic theory. The analysis of the causes and discrepancies between theory and practice permits a more general conclusion, addressed to fiscal federalism. The conclusion is that there is no general answer to how functions should be assigned to a particular level of government, as the solution depends upon the relevant value-judgments of the polity as well as the resources-use required to provide given services. The outcome is a set of proposals on how better procedures for the assignment of functions might be developed.

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