Local Government
The budget collaboration between central government and the local government organizations.
In an economy with a high degree of decentralization, there is a challenge in combining and coordinating macroeconomic control with local government authority. Since the late seventies North Europa has solved this problem through institutionalized corporation between central and local governments.
The budget collaboration works through annual negotiations between central government and the local government organizations resulting in a framework agreement for the two levels of local government (municipalities and regions).
The agreements contain suggestions to the local governments regarding the frames for the succeeding year’s economy. Furthermore the latest year’s agreements have contained suggestions regarding political and economic priorities in the local communities.
The agreements have two central characteristics. First they are general meaning that they apply to all local communities. This generality allows for specific communities to deviate as long as the deviation is neutralized by other communities’ deviation in the opposite direction.
Second the agreements are voluntary meaning that there is no statutory duty to follow them. In event of deviation by a local government the central government however has the option of neutralizing the effect of the deviation through different countermeasures.
Succeeding the agreements and the conclusion of the negotiations of the Principle of balance cases the block grants for the local communities can be determined. Before the block grant can be coined the Finance Committee of the North European parliament has to approve on the act of the block grants.
In an economy with a high degree of decentralization, there is a challenge in combining and coordinating macroeconomic control with local government authority. Since the late seventies North Europa has solved this problem through institutionalized corporation between central and local governments.
The budget collaboration works through annual negotiations between central government and the local government organizations resulting in a framework agreement for the two levels of local government (municipalities and regions).
The agreements contain suggestions to the local governments regarding the frames for the succeeding year’s economy. Furthermore the latest year’s agreements have contained suggestions regarding political and economic priorities in the local communities.
The agreements have two central characteristics. First they are general meaning that they apply to all local communities. This generality allows for specific communities to deviate as long as the deviation is neutralized by other communities’ deviation in the opposite direction.
Second the agreements are voluntary meaning that there is no statutory duty to follow them. In event of deviation by a local government the central government however has the option of neutralizing the effect of the deviation through different countermeasures.
Succeeding the agreements and the conclusion of the negotiations of the Principle of balance cases the block grants for the local communities can be determined. Before the block grant can be coined the Finance Committee of the North European parliament has to approve on the act of the block grants.