ABSTRACT
Italy is a unitary state based upon four levels of government: the central government (stato), the regions (regioni) (20 in number), the provinces (province) (95 in number at present) and the communes (comuni) (about 8,100 in number at present). 1 While local government finances have long had a substantial impact on the citizens’ lives, local authorities are not free to decide their own financial arrangements by themselves: their expenditure responsibilities and their revenue sources are fixed by national laws. The distribution of expenditure functions among the different levels of government has changed through time. During the 1970s the role of territorial authorities (regions, provinces and communes) became stronger with the creation in 1970 of 15 ‘Ordinary Regions’ 2 (which were already foreseen in the Constitution of 1948 but not in force up to that time) and with a large transfer of functions from the central government. In the 1980s there has been an increase in central government expenditures as a percentage of total public expenditures (see Table 1), as a consequence of the transfer of the local government’s debt service at central level. 3
