ABSTRACT
This chapter shows how fiscal interdependence in the French system, consistent with the arguments put forth concerning political and administrative relationships. Although the differences in the macro-figures are not negligible, the important policy effect is that in neither country can national leaders easily ignore the fiscal and financial behavior of local government. The dispersion of political power through the fiscal and financial relationships is, of course, reinforced by the territorial complexity of the system itself. From the local level the fiscal and financial state of local government always appears miserable. The very different institutional structures notwithstanding, Britain and France both claim that localities have the freedom to spend whatever they wish. The capacity of the French local government system to adjust to fiscal realities may be underestimated, while the limited capacity of the British system may produce national economic catastrophe.
