Intergovernmental Relations as Central Control Policies: The Case of Italian Local Finance

At the beginning of the nineteen eighties the observers of Italian local government system were divided between those who, looking at the unexpected social and economic development of the peripheral areas, labelled the situation as ‘neolocalism’ and those who, emphasizing the total dependence of the municipalities on the central government grants, spoke of ‘neocentralism’. The difficulty in assessing the centralized or decentralized nature of the Italian system—it is suggested in this paper—depends on the inadequacy of such concepts to cope with the complexities of contemporary political systems. From a reconstruction of the local finance reforms, which is able to show the possible objectives of such a policy, the outcomes of its implementation, as well as the actors of the process, their rationales, and their interactions, it is concluded that the intergovernmental relations have not been altered in favor of the central power and that the traditional fragmentation of the Italian political administrative system has been strenghtened. Conceptualizing intergovernmental relations as policies gives a much more realistic and promising way to depict the issue than does the simplistic zero-sum assumption implied in the traditional centralization-decentralization debate.