ABSTRACT
The financial and political -administrative relations between central and local government in France are at once the consequence of a long tradition and an illustration of the profound changes that have affected the society. The maintenance of an archaic financial system founded on the autonomy of 36,000 communes is not a matter of indifference to communes if local powers and boundaries are to be modified. The Municipal and General Councils only fix the total product they expect from local taxes, and the fiscal administration specifies the tax rates resulting from this decision. The existing situation practically neutralises an authentic territorial industrial development policy and obstructs territorial reform since communes benefiting from locational advantages refuse to share their financial advantage. Globalisation responds to the wish of both the government and locally elected officials to simplify financial and administrative relations between the state and local government.
