Abstract

The essay conducts detailed reconstruction of twenty-five years (from 1971 to 1996) of government policy on communal finance, assessing the impact of transfers by mens of analysis of aggregate magnitudes and providing measurements of them in terms of efficiency and equity. The period is divided into phases (1971-76: end of taxable capacity; 1977-1983: years of recovery and of the boom in local finance; 1984-85: first attempts to rationalize the system; 1986-89: consolidation of the situation; 1990-96: period of reforms). Analysis is conducted by regions and larger geographical areas and focuses on state transfers to the communes, examining their impact on spending and on differentials. Particular attention is paid to the metropolitan cities which, amid growing problems, have seen their spending capacity reduced by government decisions which have directed resources to the small communes. Obviously, this reduced financial capacity is matched by reduced autonomy.