Four centuries of fiscal decentralisation in the Netherlands in view of different economic theoretic perspectives

Frits Bos

MPRA Paper from University Library of Munich, Germany

Abstract: The history of the Netherlands reveals major shifts from centralisation of government tasks towards decentralisation and vice versa. In the seventeenth century, the Republic of United Provinces was the first federal state in modern history. Many transformations later the Kingdom of the Netherlands became a big centralised welfare state. Since the 1980s a reverse development has started: the welfare state is being downsized and decentralised. This paper describes and discusses this evolution in view of a broad spectrum of economic theories. Four conclusions are drawn. Firstly, a major reason for changes in fiscal decentralisation arrangements was a deterioration of economic and political circumstances. Secondly, also many other factors, like the increase in communication, mobility, population density, urbanisation and the role of government, necessitated changes. Thirdly, accountability and transparency of local government has been improved substantially. Fourthly, current arrangements are not optimal and should be changed. For example, Dutch municipalities should increase further in scale and the role of Dutch provinces should be reconsidered.

Keywords: Fiscal federalism; Subsidiary; History of Dutch public finance; Oates; Tiebout; Agglomeration-effects; Dutch Municipalities; Dutch Provinces; Water boards; Spatial planning; Infrastructure; Local taxes; Thorbecke; Local governance; Dutch Republic of United Provinces; Multi-order governance; Theories of fiscal decentralisation. (search for similar items in EconPapers)
JEL-codes: D7 D70 H7 N4 N43 N44 (search for similar items in EconPapers)
Date: 2012, Revised 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in OECD Journal on Budgeting 2012.2(2012): pp. 1-52

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