ABSTRACT
This chapter demonstrates that there are direct links between the federal fiscal constitution, as a constraining element for choosing fiscal policy instruments, the effectiveness and efficiency of fiscal policies depends very much on how political power is distributed within the federal arena and how actors use this power. It discusses two variables: the federal government's capacity to act and the concentration potential available in the federal arena. In Canada, the Westminster model with its majoritarian political structure and its concentration of power at the federal level has influenced both the territorial division of power and the party system. Fiscal policy-making meets may quite different conditions in Germany in comparison with Canada. The Belgium system has only recently found its statute as a federal system, yet the territorial division of powers has played a role at least since 1970, the year of the first state reform.
