Devolution - Strenghtening Regional and Local Democracy in The EU

Strengthening regional and local democracy in
the European Union
Volume II
CoR Studies E-1/2004

Brussels, February 2004
PLAN
VOLUME ONE
page
INTRODUCTION 1
AUSTRIA 13
BELGIUM 89
DENMARK 163
FINLAND 221
FRANCE 273
GERMANY 355
GREECE 431
VOLUME TWO
page
IRELAND 1
ITALY 43
LUXEMBOURG 133
NETHERLANDS 173
PORTUGAL 227
UNITED KINGDOM 297
SPAIN 365
SWEDEN 441
CONTENTS
page
IRELAND 1
INTRODUCTION 1
I. THE EVOLUTION OF FEDERAL/REGIONAL DYNAMICS. 3
THE ROLE OF LOCAL GOVERNMENT
1.1 Organisation of the State in the last thirty years. Historical profile 3
1.1.1 The evolution of regionalisation/federalisation procedures and 7
decentralisation processes. The most recent institutional developments
1.1.2 Relations between central government and the regional/local levels of 11
government
1.1.3 Local authority cooperation and associations 12
1.1.4 The evolution of the metropolitan government model: the role of the 13
metropolitan cities
1.2 The political and social players in the regionalisation/federalisation 14
processes. The role of political parties and of other forms of
associations
1.2.1 Regional organisation of political parties and movements 15
1.3 The importance of cooperation and social dialogue 16
II. DEMOCRATIC PARTICIPATION AT REGIONAL AND 17
LOCAL LEVEL
2.1 Voting in national and regional/local elections 17
2.2 Forms and instruments of direct democracy 20
2.3 Community identification with regional and local government 20
III. REGIONAL AND LOCAL ECONOMIC DEVELOPMENT 21
3.1 The constitutional framework (economic and financial aspects) 21
3.2 Privatisation and economic regulation 24
3.3 The budget of regional and local authorities: the local authority share 24
of national tax revenue
3.4 Public-private cooperation instruments. The intermediary role of the 25
unions
3.5 European integration and economic development at regional and 27
local level: management of the Structural Funds
IV. LOCAL AND REGIONAL AUTHORITIES AND 29
MANAGEMENT OF PUBLIC SERVICES
4.1 Management of public services. The regional and local dimension of 29
public services
4.1.1 The impact of privatisation 30
V. THE IMPACT OF INFORMATION TECHNOLOGY ON 32
REGIONAL AND LOCAL DEMOCRACY
5.1 Computerisation of public administration (projects, experience and 32
results)
5.2 Procedures and safeguards for electronic voting. The role of 34
electronic discussion forums. The rise of local television networks
5.3 Information technology and changing public services 35
Bibliography, useful links 38
page
ITALY 43
INTRODUCTION 43
government
metropolitan cities
associations
1.2.2 Regional parties 75
LOCAL LEVEL
3.3.1 Current regional funding rules: changes established by Legislative 96
Decree 56/2000
3.3.2 Current local funding rules 99
unions
public services
results)
page
LUXEMBOURG 133
INTRODUCTION 133
government
metropolitan cities
associations
LOCAL LEVEL
unions
public services
results)
page
NETHERLANDS 173
INTRODUCTION 173
government
metropolitan cities
associations
LOCAL LEVEL
unions
public services
results)
page
PORTUGAL 227
INTRODUCTION 227
government
metropolitan cities
associations
LOCAL LEVEL
unions
public services
results)
page
UNITED KINGDOM 297
INTRODUCTION 297
government
metropolitan cities
associations
LOCAL LEVEL
unions
public services
results)
page
SPAIN 365
INTRODUCTION 365
government
metropolitan cities
associations
LOCAL LEVEL
unions
public services
results)
page
SWEDEN 441
INTRODUCTION 441
government
metropolitan cities
associations
LOCAL LEVEL
unions
public services
results)
IRELAND
INTRODUCTION
The Constitution of Ireland, as originally worded, only mentioned local government

in passing, with no specific provision being made1.
The Twentieth Amendment to the Constitution, approved by referendum on 23 June

1999, accorded constitutional recognition to local government. The new Article 28A
introduced into the 1937 text not only enshrines the democratic and representative
role of local government, but also requires local elections to be held every five years.
Local government comprises 114 authorities (29 County Councils, five City
Councils, five Borough Councils and 75 Town Councils) which, as well as serving as
centres of decision-making at local level, are responsible for providing the main
public services in a specific range of sectors: housing; transport and road safety;
water supply and sewerage; development incentives and controls; environmental
protection; recreation facilities and amenities; agriculture, education, health and
welfare; and other services.
The Local Government Act of 1998 brought substantial changes to the machinery of
local government financing, which is now channelled through a centralised system
based on a combination of two separate sources: a central fund, and the proceeds of
motor vehicle taxes.
1
As for example in the provisions of the Constitution regarding the nomination of candidates
for the Presidency of Ireland. Article 12(4) stipulates that “Every candidate for election [to
the office of President] (…) must be nominated (…) by not less than twenty persons, each of
whom is at the time a member of one of the Houses of the Oireachtas, or by the Councils of
not less than four administrative Countries (including County Boroughs) as defined by law”.
1
Although until the first half of the 1990s the role of local government had been
significantly eroded by a series of initiatives and the growth of local bodies, a
programme of renewal launched by the Government sought to redress the democratic
deficit by giving local government a new position within the system. The publication
in 1996 of a Government White Paper on Better Local Government marked the
beginning of an overhaul of local government by identifying a series of specific
targets such as strengthening democracy at local level, providing adequate resources,
boosting forms of cooperation with local communities and representatives of various
sectoral interests, and ensuring greater efficiency in the supply and delivery of
services.
The Local Government Act of 2001 marked an important stage in the reform process,
reorganising the Irish system of local government to make it more efficient and more
democratic. The 240 sections comprising the Act redefine the role and functions of
local authorities, giving a more important role to local elected bodies, laying down
rules on the holding of local elections, and involving society more closely in local
institutions by setting up and recognising channels for democratic participation.
Within the system, the role of the regional authorities set up under the Local
Government Act, 1991 (Regional Authorities) (Establishment) Order, 1993 is
recognised. These authorities, which began operating on 1 January 1994, are charged
with coordinating the availability and delivery of public services between the various
counties and towns they cover.
In the light of the above, the system of local government in Ireland may fairly be
described as being marked by strong central government control. Local authorities
are seen as executive agents of government departments, responsible for
implementing central government policy.
2
The Local Government Act 2003 banned public representatives from holding a dual
mandate as a member of parliament and as a local councillor with effect from the
2004 local elections. This represents a further step forward in the reform process
launched in the mid-1990s, as it reinforces the separate responsibility of local
government as granted by the Constitution.
I. THE EVOLUTION OF FEDERAL/REGIONAL DYNAMICS.

1.1 Organisation of the State in the last thirty years. Historical

profile
Described by contemporary historians as “a small country with a big history”, all of

Ireland was long under British domination; the adoption by the Westminster
Parliament of the Act of Union in 1801 made Ireland an integral part of the United
Kingdom, represented by 100 Irish MPs in the House of Commons and 28 life peers
in the House of Lords.
The possibility of a gradual loosening of the nation’s bonds began to emerge towards
the end of the 19th century, reflected in the 1886 and 1893 Home Rule Bills. These
bills, supported by the Liberal leader Gladstone, were rejected by the British
Parliament and so failed to become law. A third Home Rule Bill providing for the
establishment of a twin-chamber Parliament in Dublin with legislative powers in the
domestic sphere, and for the appointment of an autonomous Irish executive, was
adopted by the House of Commons in the teeth of fierce opposition from the House
of Lords; Home Rule was to come into force in 1914 but was postponed by the
outbreak of the First World War.
3
The First World War period was decisive for Irish independence, with the emergence
of the Sinn Féin Party2, led by Eamon De Valera. The party, with its openly
republican ideology, made increasingly vociferous demands for full independence
from Great Britain. The first significant step in this direction came in July 1921 after
a series of bloody uprisings (1916-1920), when the British government signed a
peace treaty with a Sinn Féin delegation sent to London by De Valera. Under the
treaty, the country was partitioned into two territories; six counties of the northern
province of Ulster, with their own government answerable to a local parliament in
accordance with the Government of Ireland Act 1920, were separated from the rest of
the island and remained under British control. The remaining 26 counties secured
limited independence and formed the new Irish Free State which, under its 1922
Constitution, was a British dominion and a member of the Commonwealth, with the
British monarch as Head of State.
The compromise enshrined in the treaty inevitably prompted Republicans, led by

De Valera, to launch a fresh process of reform; on gaining power in the Free State,
De Valera introduced a new Constitution in 1937, which officially came into force
after a popular referendum on 1 July of that year and was followed by a declaration
of independence3. The lack of any reference in the Constitution to the fact that Ireland
was a republic probably reflected De Valera’s hope that agreement could be reached
with the British parliament to recover the six Ulster counties; references to the
2
Sinn Féin was in fact founded in 1905 by the journalist Arthur Griffith. Its poor electoral
performance in the early years gave no hint of how it would grow in the years immediately
before the First World War.
3
The entry into force of the 1937 Constitution marked the replacement of the “Irish Free
State” by “Éire”. Legal ties with the Commonwealth were only finally cut in 1949 with the
Republic of Ireland Act, which laid down that the country’s external relations were to be
conducted by the President in agreement with the government, and that the “description of
the State shall be the Republic of Ireland”.
4
republican nature of the system were therefore contained in ordinary legislation,
which it was necessary to invoke when John Costello’s coalition government
formally declared a Republic in 1949.
The Irish Constitution of 1937 has changed significantly over the years. Its twenty six
amendments represent the efforts of successive governments to smooth out the
discrepancies which have arisen over time between some of the Constitution’s
articles, and reflect the values of a society going through rapid social, political and
economic change.
Government structures in Ireland clearly reflect their British origins, particularly the
way in which the workings of Parliamentary government has been adopted4. The
bicameral structure of the Oireachtas (National Parliament), laid down in the 1922
Free State Constitution, is based on the neighbouring British model with its lower
house, the Dáil Éireann, elected directly by voters, and an upper house, the Seanad
Éireann, representing socio-occupational interest groups.
Article 28 of the Constitution stipulates that the Government, comprising the

Taoiseach (Prime Minister), who is appointed by the President on the nomination of
the lower house, and the ministers, also appointed by the Head of State at the
suggestion of the Prime Minister, shall be responsible to Dáil Éireann. The
Constitution provides that, in the event that relations between Parliament and
Government break down, either the Taoiseach and the members of his Government
shall resign, or the President, at the express request of the Taoiseach, shall dissolve
the Dáil.
4
Casey, J. (1987); Chubb, B. (1996); Dooney, S., O' Toole, J. (1998); Farrel, B., The
Government, in Coakley, J., Gallagher, M. (1996); Gallagher, M, Parliament, in Coakley, J.,
Gallagher, M. (1996).; Kelly, J.M., Hogan, G.W., White, G. (1994).
5
The President of the Republic is entrusted with a specific role within the workings of
government, as set out in the first articles of the Constitution.
Article 12 provides that the President “shall take precedence over all other persons in
the State”, and establishes two distinct mechanisms for election to the post,
depending on whether or not there is agreement between the political forces
represented in Parliament. In the event of a single candidate for the presidency, no
ballot is required. When, however, there are at least two candidates and no agreement
is reached between the contending parties, a direct election, using the single
transferable vote proportional representation system is held. The second scenario,
which was borne out in practice in the presidential elections in 1997, has led some
authors to reconsider their view of the Irish constitutional system and to describe it as
a semi-presidential form of government.
Analysis of Ireland’s practical experience, however, would suggest, that as in Austria

and Iceland, the Head of State, although elected by universal suffrage and enjoying
independent powers, does not have full discretion in the exercise of his/her powers.
In spite of the attempt made during the presidential election campaign of October
1990 to extend the powers of the Presidency beyond those expressly laid down by the
Constitution by means of ordinary legislation, Article 13.9 explicitly states that “the
powers and functions conferred on the President by this Constitution shall be
exercisable and performable by him only on the advice of the Government […] or
after consultation with or in relation to the Council of State, on the advice or
nomination of, or on receipt of any other communication from, any other person or
body".
6
Although direct election of the Head of State is usually an attempt to move closer to a
presidential form of government, in the Irish case it is more of an anomaly within a
parliamentary-type system.
1.1.1 The evolution of regionalisation/federalisation procedures and

decentralisation processes. The most recent institutional
developments
Local government first emerged in Ireland in the Middle Ages, when County Sheriffs
wielded delegated administrative powers, assisted for practical purposes by the Grand
Juries.
Over time, local government was vested in a number of ad hoc bodies (Town
commissioners; Poor Law Guardians; Health Boards; Boards of governors of
hospitals and asylums, etc.) set up to meet the requirements of on-going economic
and social development.
These arrangements lasted until 1898 when the Local Government (Ireland) Act
thoroughly reformed the system, setting up County Councils, Urban District Councils
and Rural District Councils (subsequently abolished in 1925), clearly based on the
centralised British model of democracy and efficiency.
Irish sub-national institutions are still centralised, and the structure’s functional
efficiency remains the strong point of a system which, for this very reason, may be
somewhat lacking in terms of democracy.
A need emerged in the late 1980s for reform of the Irish local government system,
and this was in part met by the creation in 1990 of the Advisory Expert Committee on
7
Local Government Reorganisation and Reform chaired by Tom Barrington; its report,
published following a year’s work, looked in particular at how to restructure and
reinforce local government with a view to making it “a valid partner in the process of
government”. The Government’s rather unconvincing response to the Barrington
committee’s requests was to set up eight regional authorities with effect from
1 January 1994 to promote coordination of public services at regional level and to
monitor the use of funds allocated to local authorities by the European Union.
A more significant step in the process of overhauling the system of local government
was the adoption on 23 June 1999 of the Twentieth Amendment of the Constitution.
The insertion into the 1937 text of a new Article 28A stands out as a watershed in
Irish local government arrangements, since not only does it stipulate that local
elections are to be held every five years, but also, and for the first time, gives
institutional status to the role of local government as a forum for the democratic
representation of local communities.
The 1999 constitutional amendment was followed by the Local Government Act
2001, which marks the final phase of reform, recasting the Irish local government
system in more efficient and democratic form.
The 240 sections of the 2001 act redefine the role and functions of local authorities,
giving a more important role to local elected bodies, laying down rules on the holding
of local elections, and involving society more closely in local institutions by setting
up and recognising channels for democratic participation. The way local government
is organised has also been modernised through new forms of financing.
The position of Cathaoirleach (chairperson) – which may be in the future receive the
title of mayor – has been introduced. From 2004 onwards, this will be a full-time
elected post for a five-year term.
8
One of the most significant changes brought in by the 2001 act was the reorganisation
– albeit nominal – of the various tiers of Irish local government. Prior to the reform,
local authorities in the Republic were made up of County Councils (29), County
Borough Corporations (5), Borough Corporations (5), Urban District Councils (49)
and Town Commissioners (26); since 2002 the Borough Corporations have been
known as Borough Councils, the County Borough Corporations have become City
Councils and the Urban District Councils and Town Commissioners have been
renamed Town Councils.
As a result of these changes, the Republic's local government system operates on

three separate levels: regional, county and sub-county.
For the first of these levels, Section 43 of the Local Government Act, 1991 made the
Minister for Local Government responsible for establishing regional authorities, with
the consent of the Minister for Finance. Under the Local Government Act, 1991
(Regional Authorities) (Established) Order 1993, eight regional authorities were
established5 and began operating on 1 January 1994. The area covered by each
regional authority consists of a number of Administrative Counties and Cities. The
function of the regions is to coordinate public services in the relevant area and to
monitor the use of EU structural funds. The role of the regional authorities was
broadened considerably by Sections 21 and 27 of the Planning and Development Act,
2000. The act enables regional authorities, after consultation with the local authorities
in the specified area, to draw-up long-term strategic planning guidelines for
development of the regional authority itself.
5
The eight regions are: Border, Dublin, Mid-East, Midland, Mid-West, South-East, South-
West, and West.
9
The 29 County Councils are the principal organisational bodies and the main
providers of local services (there are 26 geographical counties but 29 administrative
counties, with County Tipperary being divided into two administrative counties and
County Dublin into three) and five City Councils for the urban areas of Dublin, Cork,
Galway, Waterford and Limerick; at sub-county level the administrative model is
more uniform than in the past, comprising five Borough Councils and 75 Town
Councils, bringing together the earlier Town Commissioners (committees of senior
public officials represent the 26 smaller towns).
The regionalisation plan launched by the Irish authorities also led to the creation in
July 1999 of two regional assemblies, one for the Border, Midland and Western
Region, and the other for the Southern and Eastern Region, intended to promote the
coordination of public services in their respective areas, to launch new regional
development programmes as part of the Community support structure, and to monitor
the overall impact of Community assistance programmes financed by the structural
funds.
The 2001 act lays down a single set of rules for all local authorities, replacing a
jumble of laws dating from the end of the 19th century. An independent commission
was set up to decide on any changes to electoral boundaries; it also has powers in
respect of local electoral laws. The 2001 act also emphasises the role of elected
councils as bodies for determining policy options, while providing a wide range of
instruments for supervising and monitoring their implementation. In addition, it
introduces the Strategic Policy Committee (SPC) concept to City and County
Councils, providing for representation of major interests groups from local
communities.
Moreover, local communities have been given major consultative powers by the
legislative amendments concerning the County/City Development Boards (CDB)
10
recently set up (2000); the CDBs bring together actors at local level (the State, local
government, the social partners) to devise a long-term economic, social and cultural
development plan for the area in question.
The reform of local institutions took a further step forward with the introduction in
April 2003 of the Local Government Act 2003 which, in three brief sections,
abolishes dual mandates, making the office of member of the Dáil and that of local
councillor incompatible with effect from the 2004 local elections, and also provides
for direct election of the Cathaoirleach (Chair) of all local bodies.
1.1.2 Relations between central government and the regional/local levels

of government
Ireland is described as a unitary State with a highly centralised system of local

government. Viewed against the theoretical model opposing fused and dual systems,
Irish local government is considered as a typical example of a two-tier unitary system
with a formal separation between central and local government; thus the lower tier
must always operate within centrally-defined parameters. Relations between local
and central Government are regulated through the Department of the Environment
and Local Government, which exercises administrative, financial and technical
controls over the basic local units. Central Government control over local institutions
means that local authorities are the executive agents of government departments and
are responsible for implementing central Government policy. The effect of central
Government reluctance to delegate powers to sub-national levels has been to trigger
the emergence and growth of numerous State Sponsored Bodies and agencies,
together with the widespread development of Community Groups.
11
The 1999 constitutional amendment and the 2001 Local Government Act do however
leave the door open to further devolution of powers from the central State to local
government.
The first step in this direction came with the creation of the Strategic Policy
Committees (SPC), bodies made up of elected officials and representatives of local
interest groups, with the task of helping to formulate policy in the area covered by the
local authority in question.
1.1.3 Local authority cooperation and associations
Local associations are particularly well-developed in Ireland. The General Council

of County Councils (GCCC), set up in 1899, is one such association of local
authorities recognised by law (although membership is voluntary), representing
County Councils and County Borough Councils. The Association of Municipal
Authorities of Ireland (AMAI) represents urban local authorities. It too is a
voluntary association, recognised by law. It represents 82 councils (5 County
Boroughs, 5 Borough Councils, 49 Urban District Councils and 23 Town
Commissioners). Each member council sends two delegates to the association. The
Local Authority Members Association (LAMA) was set up in 1980 and represents
the elected members of the main local councils6.
6
In connection with forms of cooperation, see also points 1.1.1. and 1.1.2.
12
1.1.4 The evolution of the metropolitan government model: the role of the
metropolitan cities
In the Republic, the metropolitan government model is represented by five cities7:

Cork, Dublin, Galway, Limerick and Waterford. Renamed under the Local
Government Act 2001, since 2002 each city has had a City Council. City Councils,
responsible for local government in the areas they cover, act independently of the
county authority, with their own management boards and managers. The number of
members on each City Council (52 for Dublin, 31 for Cork, 17 for Limerick and
15 each for Galway and Waterford) is laid down in Section 7 of the 2001 Act.
Dublin City Council, for example, delivers services to a population of 500,000

covering an area of 115 square kilometres. More particularly, the Council provides
essential services such as water, sewerage, waste disposal and libraries: the country’s
economic boom during the 1990s had a major impact in driving up the cost of
housing and increasing traffic.
Counties contain further local government areas, towns.
Some 13% of the country’s entire population live in towns.
Residents of these areas elect the County Council and the Town Council, either at the
same time or in separate elections.
7
The Local Government Act, 2001, renamed the County Boroughs – introduced by the Local
Government Act of 1898, as Cities.
13
Prior to the Local Government Act 2001, local authority in towns consisted of five
Borough Corporations, 49 Urban District Councils (UDCs) and 26 Town
Commissioners.
The Town Councils have taken over the functions formerly exercised by the Borough
Corporations, UDCs and Town Commissioners prior to the reform in the areas of
housing, roads and planning, except for water services which were transferred to
County Council level on 1 January 2004.
1.2 The political and social players in the

regionalisation/federalisation processes. The role of political
parties and of other forms of associations
There is a wide range of parties on the Irish political scene although the main rivals in
the political arena are Fianna Fáil and Fine Gael.
The practice of majority government, established as far back as the Irish Free State
period under the Cosgrave government, has been a continuous feature in Irish
politics, with only rare interruptions.
The trend which saw Fianna Fáil as the party of government for a virtually unbroken
32-year stretch, apart from brief bouts of coalition government, has undergone
substantial change since 1986, with the entry into the Irish political arena of new
party groupings such as the Progressive Democrats, a conservative faction, and the
Workers’ Party on the left.
Fianna Fáil’s 1989 decision to go into a coalition with the Progressive Democrats
signalled a significant change in the pattern of contest which had shaped the post-war
14
period in terms of “Fianna Fáil versus the rest”. Fianna Fáil’s new tactic was to have
a considerable impact. The breakdown of the traditional line-up triggered a serious
crisis in the party founded by De Valera: in the 1992 elections, support for Fianna
Fáil fell to a level unprecedented since the entry into force of the 1937 Constitution.
A party which had long been the only one capable of ensuring stability and continuity
by forming single-party governments now found itself on the same footing as other
political organisations.
However, Fianna Fáil continue to occupy a central position in elections; the

increasing fragmentation among parties in the early 1990s was in itself enough to
guarantee that no coalition could be formed without its support.
In the wake of its 1992 gains, for example, the Labour Party opted to go into
government with Fianna Fáil, bringing to an end the system of competition which had
marked the previous fifty years.
General elections in 1997 and again in 2002 saw Fianna Fáil obliged to form a
coalition government with the Progressive Democrats, a liberal-minded party set up
in 1985 with the aim of providing a real alternative to the “civil war parties” which
had previously dominated the political arena.
1.2.1 Regional organisation of political parties and movements
The Irish party system is marked by a highly decentralised organisation, with local
branches enjoying considerable levels of independence from central structures. The
same spread of electoral opinion can therefore be found at local level as at national
level, as shown by the 1999 local elections:
15
Political parties Local elections Dáil elections
1999 2002
Total seats: 817 Total seats: 166
Fianna Fáil 352 80
Fine Gael 258 31
Labour Party 78 21
Sinn Féin 20 5
Progressive Democrats 21 8
Green Party 7 6
Others/Independents 81 15
1.3 The importance of cooperation and social dialogue
In view of its success at national level, the social partnership model was extended to
the local level as part of an attempt to respond to the problems caused by
unemployment and social exclusion in various parts of the country. Social partnership
was first recognised at level in 1991 when twelve area-based partnership companies
were set up under the Programme for Economic and Social Progress (PESP). The
number of locally-based partnerships rose to 38 between 1994 and 1999 under the
National Development Plan. Established as limited liability companies subject to the
Companies Acts, each of the area-based partnership companies has a board of
management comprising representatives of the local community (groups working in
fields such as social services, tenants’ rights and crime prevention) and voluntary
organisations, the social partners (trade unions, farmers, business or industry
associations, etc.), the local authorities and agencies established by law. Up to 1999
local partnerships were partly financed by the Structural Funds, but since 2000 they
have been entirely funded by the national Treasury. In 2002 the responsibility for
local partnerships was transferred from the Department of Tourism, Sport and
16
Recreation to the newly-created Department of Community, Rural and Gaeltacht
Affairs. The specific function of the partnership companies is to draw up local
development plans designed to help their reference areas to overcome their
disadvantages, and to implement these plans with funding provided by Area
Management Ltd., a national body which acts as an intermediary for administering
the programme.
II. DEMOCRATIC PARTICIPATION AT REGIONAL AND LOCAL

LEVEL
2.1 Voting in national and regional/local elections
On 11 June 1999, some eight years after the last local elections, Irish voters went to
the polls for simultaneous European and local authority elections. The local elections
were used by the political parties not only as an indicator for the general elections in
2002, but principally as an opportunity to recruit potential candidates for the national
elections (incompatibility between the post of "Teachta Dála (member of parliament)
and of a local authority having been abolished by the Local Government Act 2003,
with effect from the 2004 local elections).
With a few variations, the support gained by the individual parties in the local council
elections mirrored the results of the previous ballot in 1991.
As can be seen in table 2.1, Fianna Fáil’s results in the county and borough council
elections were the result of two opposing trends: on the one hand, a rise – albeit
modest – in support, rising from 37.9% in the 1991 elections to 39%; and on the
other, the failure once again to break through the 40% barrier, a disappointing result
for a party which had governed the country during an era of unprecedented economic
17
recovery. For its part, Fine Gael secured an increase of 1.7%, its electoral support
rising from 26.4% in 1991 to 28.1%, a result which was however offset by the serious
reverse suffered by the party’s deputy leader, Nora Owen, in the Dublin North
constituency.
In spite of the merger with the Democratic Left in 1999, the Labour Party lost 16 of
the 101 local authority seats it had won in the previous election. Although its level of
support rose by 0.2% to 10.8%, this result was 3.4% lower than the overall vote
obtained by the parties before their merger.
Sinn Féin was the major winner of the 1999 local elections, tripling the number of its
representatives on local councils. The capture of four seats in the Dublin area in
particular represented an important result and a significant pointer to the party’s
break-through in the 2002 general elections.
Local elections 1967-19998
Year Fianna Fine Labour Workers Progressive Sinn Green Others Turnout
Fáil Gael Party Party Democrats Féin Party
1967 40.2 32.5 14.8 - - - - 12.5 69.0
1974 40.1 33.7 12.8 1.5 - - - 11.9 61.1
1979 39.2 34.9 11.8 2.3 - 2.2 - 9.6 63.6
1985 45.5 29.8 7.7 3.0 - 3.3 - 10.7 58.2
1991 37.9 26.4 10.6 3.7 5.0 1.7 2.0 12.7 55.1
1999 39.0 28.1 10.8 0.5 2.9 3.5 2.5 13.7 49.5
8
Source: Coakley, J., Gallagher, M. (1999).
18
The general elections to the Dáil on 17 May 2002 produced no major changes in the
make-up of the government majority, which remained virtually unchanged from the
1997 general elections. Bertie Ahern, T.D., was elected Taoiseach of a Fianna
Fáil/Progressive Democrats coalition government for the second time on 6 June of
that year by 93 votes to 68 in the Dáil.
The real change to emerge from the parliamentary elections occurred on the
opposition side. Although retaining the same overall number of seats, there was a
dramatic slump in Fine Gael’s vote, while small parties and independent candidates
made significant gains, winning 15 seats.
General elections 1987-2002
Year Fianna Fine Labour Progressive Sinn Green Others Turnout

Fáil Gael Party Democrats Féin Party
1987 44.1 27.1 6.4 11.8 1.9 0.4 8.3 73.3
1989 44.1 29.3 9.5 5.5 1.2 1.5 8.9 68.5
1992 39.1 24.5 19.3 4.7 1.6 1.4 9.4 67.5
1997 39.3 27.9 10.4 4.7 2.6 2.6 12.5 65.9
2002 41.5 22.5 10.8 4.0 6.5 3.9 10.9 62.7
The above tables show a steep decline in voter turnout, starting with the 1999 local
elections and continuing with the 2002 general elections. This trend, already present
in the 1997 presidential elections, led to the historically low turnout of 49.5% for the
local elections. The high level of abstentionism can probably be traced to the
financial and economic scandals involving leading political figures.
19
2.2 Forms and instruments of direct democracy
The rules governing the direct involvement of the people in political life are set out in
Article 27 of the Constitution providing for referendums on legislation, and in
Articles 46 and 47 regarding compulsory referendums on changes to the Constitution.
Under the first of these referendum scenarios, the President may, upon receipt of a
request of one-third of the members of the Dáil and a majority of the Seanad,
accompanied by a statement of grounds, decline to promulgate as law a bill passed by
both houses, if he or she considers it a matter of such importance that the will of the
people should be ascertained. However, the strong government control over
appointments to the Seanad, and its homogeneous majorities reflecting those in the
Dáil, provide a clear explanation of why this constitutional instrument has remained
unused.
In contrast, the Constitutional referendums referred to in Articles 46 and 47 are a

mandatory stage in the revision process of the Constitution, and have been put into
practice on many occasions.
For the purposes of the present study, the most relevant of the 27 referendums held
between 1937 and the present day is that on the Twentieth Amendment of the
Constitution Act, 1999; this amendment which was supported by 77.8% of votes,
gives recognition and institutional standing to the role of local authorities in the new
Article 28A of the Constitution.
2.3 Community identification with regional and local government
Local government is the governmental tier most accessible to citizens and offers the
best opportunity for their involvement in the management of public affairs. In the
20
Irish setting, the importance of local government as part of the national system of
democracy has often been overlooked. This can probably be traced to the political
culture inherited from a strongly centralised Britain.
Local government’s importance therefore stems from its functional ability and
efficiency as a service provider rather than as an instrument of local democracy.
The importance of local government in Ireland received a boost in the early 1990s
with the launch of a radical reform process.
This process, together with globalisation, which has dominated the political agenda
and made it important for communities to preserve a sense of their own identity, has
expanded and rekindled the Irish population’s feeling of local level community
involvement. In Ireland, this feeling has traditionally been nearly as strong as that of
national identity. In a survey published in 20029, 96 % described their feeling of
belonging to the nation as high or quite high; at the same time, 95% said their feeling
of belonging to their own town or village was high or quite high, 94% were highly or
quite highly attached to their county and region.
III. REGIONAL AND LOCAL ECONOMIC DEVELOPMENT
3.1 The constitutional framework (economic and financial aspects)
Article 10 of the Irish Constitution states that all natural resources, including the air
and all forms of potential energy and all royalties and franchises within the Irish
jurisdiction, belong to the State, subject to all estates and interests lawfully vested in
any person or body.
9
In Callanan, M., Keogan, J. F. (2003), 3, note 1.
21
The right to private ownership is set out in part in Articles 40(3) and 43 of the
Constitution. In the former, the State guarantees by its law to respect and, as far as
practicable, to defend and vindicate the personal rights of the citizen, including
property rights, while Article 43 enshrines man’s natural right to private ownership of
goods and stipulates that its exercise in Irish civil society must be regulated by the
principles of social justice. In consequence that State may, but only as occasion
requires, delimit by law the exercise of said rights with a view to reconciling their
exercise with the exigencies of the common good.
Under the terms of Article 45(3), the State favours and, if necessary, supplements
private initiative in industry and commerce, and endeavours to secure that private
enterprise is so conducted as to ensure reasonable efficiency and the production and
distribution of goods and as to protect the public against unjust exploitation.
Article 11 of the Constitution, dating from 1937, lays down that all revenues of the
State from whatever source, are to form one fund and are to be appropriated for the
purposes and in the manner and subject to the charges and liabilities determined and
imposed by law.
The Central Fund, established by section 6 of the Constitution (Consequential

Provisions) Act, 1937, is subject to the examination of the Comptroller and Auditor
General who, in accordance with Article 33 of the Constitution, checks on behalf of
the State all disbursements and audits all accounts of moneys administered by the
Oireachtas.
Article 28(4) stipulates that the Government must prepare estimates of receipts and
expenditure of the State for each financial year and present them to the Dáil for
consideration.
22
The Dáil is required to consider the estimates of receipts and expenditure of the State
for each financial year as soon as possible after they are presented to it. As mentioned
above, all revenues of the State, from whatever source, are channelled into the
Central Fund, and under the terms of Article 17(2) of the Constitution, the Dáil
cannot pass any resolution or law for the appropriation of revenue or other public
moneys unless the purpose of the appropriation is forwarded to it by a message from
the Government signed by the Taoiseach.
Once the estimates have been discussed and the package passed, a Money Bill is
presented, which details appropriations for each item.
Under Article 21 of the Constitution, once passed, Money Bills – which can only be
initiated in the Dáil – must be sent to the Seanad (upper house) for its
recommendations. The upper house must, within 21 days, return the bill to the Dáil,
which may accept or reject all or any of the recommendations. If the bill is not
returned within this period or if the Dáil decides not to accept the recommendations,
it is deemed to have been passed by both houses.
The power to refer bills to the Supreme Court for a decision on their constitutionality,
vested in the President by Article 27 of the Constitution, is restricted in the case of
Money Bills, which can only be referred after they have been enacted.
23
3.2 Privatisation and economic regulation
Whereas in the United Kingdom an extensive and far-reaching process of

privatisation was launched in the 1980s, privatisation in Ireland only began to get
under way in the early 1990s, with the privatisation of the telecommunications
services operator, Telecom Éireann10.
3.3 The budget of regional and local authorities: the local authority
share of national tax revenue
Local government funding was thoroughly overhauled in the late 1990s. The Local
Government Act 1998, which came in the wake of the New deal for Local
Government initiative launched in January 1998, led to significant innovations in the
local government financing procedure. The domestic rates era, in which a substantial
portion of revenue was raised locally, finally came to an end in 1999, being
abandoned in favour of a centralised system of financing through a Local
Government Fund (LGF) entirely dedicated to local government financial
management, and supported by two sources: a contribution from the Exchequer and
the proceeds of motor tax.
The Exchequer Contribution, which stood at EUR 343 million at the time of its
inception, is adjusted annually in line with inflation and the various needs arising
from new activities undertaken by local authorities.
10
For more details, see point 4.1.1.
24
The Local Government Fund 1999-2003*
1999 2000 2001 2002 2003

Exchequer Contribution 343.0 400.0 475.0 419.6 420.1
Proceeds of motor tax 453.0 479.0 511.0 538.0 553.0
Interest earned on the LGF 0.6 1.8 2.0m 1.5m 1.0
Total LGF 796.6 880.8 988.0 959.1 974.1
* Figures in EUR millions
The Local Government Act, 2001 represented further progress in the machinery of
local government finance, launching a process of renewal and modernisation of local
financial management with the aim of making it more transparent and, above all,
more comparable from authority to authority. To this end, Section 12 of the Local
Government Act 2000 provided that each authority must prepare a budget indicating
all estimated revenue and expenditure for the financial year.
Section 108 of this act also provides that local authorities may set up a community
fund to finance cultural or recreational initiatives, or to carry out joint projects.
3.4 Public-private cooperation instruments. The intermediary role

of the unions
One of the main achievements of public-private collaboration has been the creation of
Public Private Partnerships as instruments for cooperation between the public and
private sectors in the preparation of projects or provision of services traditionally
supplied by the public sector. The need to devise such forms of association arises
from a determination to ensure that services and infrastructure are provided in the
most efficient and economically advantageous manner possible.
25
The Department of Environment and Local Government set up a unit in 1999 to
promote and facilitate the development of PPPs in its areas of responsibility. At the
end of the same year, the Government announced the launch of a pilot programme
specifically focusing on the management of certain public services such as streets,
water supply and waste disposal.
The PPP Work Programme has developed substantially, with a wide range of projects
being submitted – some 80 in 2002, of which 44 have now made considerable
progress.
The trade unions play an important part in public-private cooperation. The legal
status of trade unions in Ireland is governed by the Trade Union Acts of 1871, 1913,
1941, 1975 and the Industrial Relations Act of 1990.
The Irish Congress of Trade Unions (ICTU) was created in 1959, following the
merger of the Irish Trade Union Congress and the Congress of Irish Unions.
ICTU is the largest and most important trade union federation, with 72 affiliated
unions, 52 of which operate exclusively within the Republic. They play a decisive
role in the negotiations between employers and workers in reaching collective
agreements. Collective bargaining may be either centralised or decentralised
depending on the relevant level. Centralised bargaining applies to the public sector,
within bodies operating at national level such as Government departments, State
agencies and semi-State bodies.
Decentralised bargaining, in contrast, takes place at the level of individual sector

associations.
26
3.5 European integration and economic development at regional and
Irish society, politics and the economy have been profoundly affected by the process
of European integration, which got under way in the early 1970s following the
adoption of the constitutional referendum on Ireland’s accession to the European
Community and the simultaneous amendment of Article 29(4) of the Constitution; the
integration process was deepened further by the adoption of the Single European Act,
and the Maastricht, Amsterdam and, most recently, the Nice Treaties.
Although initially many sceptical commentators sought to interpret the European

Union’s role solely as a potential source of funding, they were soon forced to change
their views in the light of the real impact EU legislation was judged to have on
various Government and local government activities in Ireland, with EU directives
being transposed through acts of Parliament or ministerial regulations.
The Structural Funds certainly represent one – although not the sole – factor in the
country’s economic success during the 1990s, providing a major source of income for
local government. The Structural and Cohesion Funds have enabled local authorities
to achieve large-scale objectives, such as the construction of road networks or
reorganisation of the water supply network, but have also been used for smaller-scale
purposes such as renovation projects for urban centres and villages, or the promotion
and implementation of cultural and arts initiatives.
The inflow of structural funds and the impact of European legislation have also been
of considerable effect in stimulating a reorganisation of the sub-national tier of
government. In 1999 the country was considered to form a single region and
management of funds was highly centralised, but at the prompting of the European
Commission in connection with Agenda 2000, two regions were created; the Border,
27
Midland and Western Region (B.M.W. Region) and the Southern and Eastern Region
(S&E Region) with particular reference to Structural Funds management. The two
regional assemblies, which came into being on 21 July 1999 under the Local
Government Act 1991 (Regional Authorities) (Establishment) Order, 1999, are
responsible for monitoring the impact of European Union programmes on the basis of
the National Development Plan 2000-2006 and promoting the coordination of public
services in their respective regions.
Approximately EUR 3.8 billion has been allocated to the Irish Government by the
Structural and Cohesion Funds under the National Development Plan 2000-2006.
The Structural and Cohesion Funds 2000-2006
Structural Funds Cohesion Funds

Contribution Contribution
EUR million EUR million
Economic and Social 855 576
Infrastructure
Productive Sector 333 -
Employment and Human 901 -
Resources
Regional OPs 972 -
PEACE OP 106 -
28
IV. LOCAL AND REGIONAL AUTHORITIES AND
4.1 Management of public services. The regional and local

dimension of public services
Irish local authorities are responsible for providing a wide range of services which
can be broken down into eight broad categories: housing; transport and road safety;
water supply and sewerage; development plans and controls; environmental
protection; recreational facilities and amenities; agriculture, education, health and
welfare; and various services.
Although the list of services which local authorities are required to provide or
manage is so extensive as to suggest a considerable devolution of powers by central
Government, actual analysis reveals that with the exception of housing, the level of
devolution is quite restricted.
In this regard, it is clear that local authorities have striven over the last ten years to
improve the quality of the public services they provide, making them more
responsive to consumers’ demands and to the needs of their territorial areas.
As elsewhere, provision of public services takes place within the principles and limits
laid down by national policy. Local authorities are therefore given general powers
giving them some leeway in how they attain the objectives set by central Government
and adjust policies and services to local needs.
Local authorities enjoy general competence under the terms of the Local Government
Act 1991, which was adopted following the push for renewal provided by the 1991
29
Barrington Report. Section 6.1 of the Act gave local authorities the general
competence required to promote the interests of the local community in whatever
way they consider necessary or desirable.
The general competence principle, which is restated in the Local Government Act
2001, has the effect not only of overturning the ultra vires rule created by the courts,
forbidding local authorities from any action not specifically authorised by law, but
also of extending the scope of local authority activity in the area of supplying public
services, allowing them to be tailored to specific needs. Section 66.3 of the 2001 act
provides that local authorities may take measures or engage in activities in
accordance with law in order to promote the interests of the local community. For the
purposes of promoting the interests of the local community, it is necessary to adopt
measures facilitating social inclusion or the social, economic, environmental and
recreational development of communities within the relevant administrative area.
This general power attributed to local authorities is, however, limited not only by the
areas of competence conferred by law on other bodies, but also by their inability to
undertake any activity that would prejudice or unnecessarily duplicate activity arising
from a statutory function of another body, or that would involve wasteful or
unnecessary expenditure.
4.1.1 The impact of privatisation
Privatisation, which was in the past very limited in Ireland, has speeded up
considerably in recent years, with the privatisation of the telecoms operator Telecom
Éireann plc, which became Eircom plc in 1999.
30
Whereas the United Kingdom boasted privatisation in a wide range of sectors in the
first half of the 1980s, public services in Ireland were provided by "Semi-State
Bodies"11 (SSB) holding a legal monopoly position.
The tax policy and various trade-related measures implemented by successive

Governments over the last 20 years, together with the process of European
integration, spotlighted the need to change the fundamentally monopolistic position
of the SSBs and to commence a gradual process of privatisation.
Privatisation has been approached cautiously, as a result of the distaste expressed by

the country’s trade unions and the Labour Party. It is worth mentioning, in this
regard, that the law setting up An Post and Bord Telecom Éireann12 allowed only the
Minister for Posts and Telegraphs to split it up. This restriction was revoked by the
Telecommunications (Miscellaneous Provisions) Act 1996.
Before 1996, the way to privatisation was paved by two major legislative initiatives,
the Insurance Act 1990 and the Sugar Act 1991.
The first semi-State body to be fully privatised was the telecommunications

company, Telecom Éireann. The Postal and Telecommunication Services
(Amendment) Act 1999 laid the groundwork for Bord Telecom Éireann plc (BTÉ) to
be placed on the market, its shares being put on sale on 8 July 1999. The Eircom
experiment heralded further privatisation moves. The Electricity (Supply)
Amendment Act 2001 and the Irish National Petroleum Corporation Limited Act
11
The first semi-State body was the Electricity Supply Board (ESB), set up in 1927. It was
followed by the Agricultural Credit Corporation (ACC), the Irish Sugar Company and a
series of enterprises geared to supplying services in the fields of transport,
telecommunications, information, etc..
12
Postal and Telecommunications Act, 1983, section 21.
31
2001, provided for the privatisation of the Electricity Supply Board (ESB) and the
Irish National Petroleum Corporation Ltd (INPC).
V. THE IMPACT OF INFORMATION TECHNOLOGY ON

5.1 Computerisation of public administration (projects, experience

and results)
As seen earlier, investment in and use of information technologies were seen as key
stages in the process of local government reform set out in the 1996 document, Better
Local Government (BLG); practical implementation of a computerised system of
organisation would certainly improve the quality of service provision to the public
and streamline exchange of information between the State, local authorities and other
important bodies; Information and Communication Technologies (ICT) would not
only optimise the working conditions of local government personnel and minimise
the impact of geographical constraints on service delivery, but would also increase
public involvement in defining significant options, providing an up-to-date, easily
understandable information system and allowing on-going public consultations on
policy matters.
At local level, some authorities have been more active than others in developing hi-
tech information systems. A number of local authorities have set up Intranet sites, for
the purposes of internal information and for exchanging information and news
between their different departments, together with Extranet sites to support the work
of local councillors.
32
Although most local councils have created their own Internet sites, enabling users to
send e-mails, web applications allowing citizens to deal with the local authority
electronically are still few in number and not completely active. One exception to this
is Co Kerry, which has experimented with forms of direct cooperation between local
institutions and residents.
The fact that use of ICTs has begun does not, however, mean that delivery of public
services has been fully computerised, as a number of significant changes must first be
made within local authorities. These organisational-type changes which will then
allow all the benefits of computerisation to be reaped in practice.
Although much remains to be done, it is worth pointing out that those local
authorities which have been notably successful in the use of ICTs are those which
have adopted a “think big, start small, move fast” approach such as Co Meath, which
decided to change its own Council organisational structure in order to implement
decentralised public service delivery13.
In order to put on-line delivery of public services into practice, the Local Government
Computer Services Board (LGCSB) is working together with local authorities and the
Department of the Environment and Local Government in a number of specific fields,
such as housing, funding systems, the electoral register and education.
In the area of electronic voter registration, for example, the personal data protection
issue has drastically slowed the process of computerisation, although users have been
assured that as soon as it becomes technically possible, they will be able to check if
they are registered and, if not, to register on-line; regarding tax, the Department of the
13
For details on the Co Meath experience, see. Boyle, R., Humphreys, P.C., O’Donnell, O.,
O’Riordan, J., Timonen, V. (2003), 82 ss.
33
Environment and Local Government is about to launch a pilot project allowing users
to pay taxes and charges on-line.
In spite of the efforts made over the last few years to computerise services, the
feeling remains – including among local authority figures themselves – that the ICT
use is still in many areas embryonic, and that the road to complete computerised
management and efficient on-line delivery of public services is lengthy and full of
obstacles.
5.2 Procedures and safeguards for electronic voting. The role of

electronic discussion forums. The rise of local television
networks
Electronic voting was tried out for the first time in the 2002 general elections. The
pilot project, announced by Bertie Ahern’s Government back in February 2000, and
restricted to three constituencies – Dublin North, Dublin West and Meath – was to be
the first test-bed for a voting system to be fully introduced in the local and European
elections in 2004.
The Government’s enthusiasm for e-voting as likely to produce major advances in

electoral procedure, by providing faster and more reliable results and making it easier
for voters to express preferences, was countered by critics who believed that e-voting
would reduce electoral transparency and public awareness.
Concern that electronic systems could confuse less expert users on how to express
their preferences prompted the Department of the Environment, Heritage and Local
Government to launch an information campaign during which two booklets were
34
distributed in the relevant constituencies: Making It Easier to Vote and Electronic
Voting - It’s Easy.
Despite the efforts made, the e-voting system failed to simplify electoral procedures
as expected. Long queues, the need in any case to go to the polling station to use the
voting machine, a substantial fall in turnout and voters’ fears about the secrecy of
their votes all pointed to the advisability of replacing this arrangement with mobile
methods of e-voting (e.g. via Internet or mobile phone), and failed to realise its huge
potential benefits for the future.
5.3 Information technology and changing public services
The introduction of computer technology was highlighted by the document Better

Local Government - A Programme for Change 1996 as one of the key points in the
process of local government reform in terms of the quality, efficiency and delivery of
public services.
Like the 1994 Strategic Management Initiative before it, the programme emphasised
that strategic use of Information and Communication Technologies (ICTs) could help
build a system of local government able not only to provide citizens with a wide
range of services, but also to act as a partner for central Government in bringing
about the information society in Ireland.
The first Action Plan for the Information Society, entitled Implementing the
Information Society in Ireland and published by the Government in January 1999,
argued that electronic delivery of services must be implemented in three separate
stages; firstly, websites for all Government departments and agencies providing on-
line service information while maintaining more traditional means of delivery;
35
secondly, provision of interactive services and their on-line delivery; and lastly,
remodelling information and service delivery in line with users’ requirements.
Three years after the first Action Plan for the Information Society, the Irish
Government published the New Connections report (2002), restating the importance
of ICTs as essential tools in cutting costs and maximising quality and efficiency in
the provision and delivery of public services.
The Government has set itself a specific target for on-line availability, by the end of
2005, of all essential public services which can be delivered electronically.
The Government has set up an interdepartmental body to press ahead with the
modernisation of public service management. Reach was established in 1999 to help
implement eGovernment. Its particular brief is to improve the management and
delivery of public services through its website www.reachservices.ie. Users key in
their PPSN14 to enter the site, where they can, for example, apply for a health
insurance card, planning permission, an education grant or a birth certificate. The
site also represents the first step towards a standardised mechanism for access to
public services, to be known as the Public Service Broker. The electronic broker,
scheduled to enter service in late 2003, will act as an intermediary between users
and public service agencies, and will be responsible for developing a single access
point to services in order to enhance their delivery through both traditional means
(telephone or in person) and the new self-service electronic channel. Over the last
three years, and pending the creation of the Public Service Broker, a broad range of
eGovernment information and service delivery projects have been put in motion.
Three of the most important of these projects are Oasis (Online Access to State
Information and Services), launched in 2001 with the aim of providing citizens with
14
The Personal Public Service Number (PPSN), similar to a Pin, identifies the user and opens
access to the system.
36
information relevant to life events, Basis (Business Access to State Information and
Services), set up to supply 24-hour information on business and employment
matters, such as setting up a business, paying taxes or recruiting personnel, and ROS
(Revenue On-Line Service), which allows users to fill in electronic tax assessment
forms and pay some taxes on-line15.
15
There are many other projects apart from Oasis, Basis and Ros, including the Land Registry
Electronic Access Service (www.landregistry.ie), FÁS (www.fas.ie), eTenders
(www.etenders.gov.ie), Driving test information (www.drivingtest.ie), the higher education
Central Applications Office on-line (www.cao.ie), the State Examinations Commission on-
line results service (www.examinations.ie), Public Sector recruitment (www.publicjobs.ie),
and information on physical and social infrastructure in Ireland (www.infrastructure.ie).
37
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41
USEFUL LINKS
Local Government Computer Services Board (LGCSB) http://www.lgcsb.ie

Government of Ireland http://www.irlgov.ie
Dublin Regional Authority http://www.dra.ie
Midlands Regional Authority http://www.midlands.ie
Mid-West Regional Authority http://www.mwra.ie
South-East Regional Authority http://www.sera.ie
South West Regional Authority http://www.swra.ie
Border, Midland & Western Regional Assembly www.bmwassembly.ie/
Southern and Eastern Regional Assembly www.seregassembly.ie/
Central Statistics Office http://www.cso.ie
eGovernment Ireland http://newsweaver.ie/enn1/index000017163.cfm
Reach - eGovernment in Ireland http://www.reach.ie/
Information Society Commission www.isc.ie
Regional newspapers http://www.unison.ie/allpapers.php3
Ireland newspapers http://newsdirectory.com/
42
ITALY
INTRODUCTION
Since 1999, and in accordance with constitutional laws 1/99, 2/01 and 3/01, the entire
Italian institutional framework has undergone a substantial overhaul. Under
constitutional law 1/99, regional presidents are to be elected by direct suffrage and
regions are granted statutory autonomy. Law 2/01, in turn, grants special statute
regions the right to self-government, parallel to the amending legislation provided
under Law 1/99 for ordinary regions. Finally, under Law 3/01, the republic has been
defined as a unit composed of municipalities, provinces, regions and the state. The
legislative powers of regions have been considerably extended, while government
restrictions on regional legislation have been curtailed. A new legal framework for
governance has thereby been created, and new criteria for the distribution of
administrative duties amongst the state, regions, municipalities, provinces and
metropolitan cities have been established, whilst external controls have been lifted.
New provisions governing the financial autonomy of regional and local authorities
have been laid down. Finally, regional powers over relations within the European
Union and at international level have been redefined. The cooperative nature of the
federal model chosen in the 2001 constitutional legislation is apparent in the revised
text of Article 118(1) and (3) of the constitution, upholding the principle of
subsidiarity. However, the revised Title V has not given sufficient attention to the
principle of loyal cooperation between the state and the regional authorities. The only
permanent bodies that provide for coordination between the state and regions on the
one hand, and between the state, regions and the local authorities, on the other,
remain respectively the State-Regions Conference and the Joint State-Regions-Cities-
Local Authorities Conference, which were most recently regulated by legislative
43
decree in 1997. Regarding coordination within regions, under the terms of
constitutional law 3/01, the newly established regional statutes are to regulate the
Council of Local Authorities, which is the body entrusted with coordination between
the region and the local authorities.
In recent years, Lega Nord (the Northern League) is beyond doubt the political
movement that has made federalisation its top political priority. Nevertheless, the
above-mentioned reforms towards federalisation in Italy took place during the XIII
Legislature, when Lega Nord was not a member of the ruling (centre-left) coalition.
However, the centre-right coalition that won the national elections in 2001, and
which passed Act 131/03, is responsible for drafting implementing legislation for
revised Title V. Federalism is therefore an ongoing process in Italy. In 2003, further
bills amending Title V were submitted to parliament.
From an economic point of view, Italy's uneven socio-economic development and the
structural crises affecting certain areas made it eligible for a share of the Structural
Funds. For instance, in the north, Lombardy has a gross domestic product equivalent
to 132% of the European Union average, whereas in the south, in Calabria, GDP
stands at 61%. Disparities in employment rates are equally striking: unemployment
stands at 24% in Campania, which is over five times as high as the unemployment
rate in Trentino-Alto Adige (4.5%).
With regard to domestic economic policy, privatisation has been a matter of

government policy since the 1990s. The national debt and the need to bring public
spending in line with the Maastricht rules and the national antitrust law establishing
the Italian competition authority have greatly influenced and accelerated the
conversion of public enterprises, which were previously state-controlled. The
privatisation process in Italy has resulted in a transition from state ownership to state
regulation. In practice, however, the regulations governing privatised companies are
44
still public-law related to a large extent. Thus the special powers, share ownership
restrictions and regulatory provisions that characterise the public sector are still
prevalent in the liberalised sectors.
I. THE EVOLUTION OF FEDERAL/REGIONAL DYNAMICS. THE

ROLE OF LOCAL GOVERNMENT

profile
The implementation of Title V of the Italian constitution and, in particular, of the

"ordinary regions" system began in 1970, when the first elections for regional
councils were held. The first law on regional elections, Act 108, was enacted in 1968.
Act 281, enacted in 1970, lays down the financial provisions for the implementation
of the new regional system and authorises the government (Article 17) to enact
legislation transferring functions and personnel from the state to the regions. Under
Act 382/1975, the state undertook to complete the delegation of powers through new
delegating legislation, which resulted in Decrees 616-617-618 in 1977. The third
phase in the transfer of administrative functions to the regions was carried out
recently and was decidedly regionalist, not to say federalist, in character. This process
has come to be known as “federalism with an unchanged constitution”. It was
initiated through Act 59/1997, known as the Bassanini Bill (Bassanini was the
minister for public administration at the time). This act, which was partly inspired by
the principle of subsidiarity, led to the enactment of important legislative decrees
delegating administrative functions and responsibilities to the regional and local
authorities, in particular, legislative decree 112/1988. As this major devolutionary
process based on an unchanged constitution began to take shape, the full-scale
constitutional reform which had been prepared by a special bicameral commission
45
failed yet again. Faced with the inability to implement a full-scale reform, a new
“sector-by-sector” approach was adopted and was used between 1999 and 2001 to
reform Title V of the constitution.

developments
In 1999 and 2001, two important constitutional laws were adopted that radically
amended Title V of part II of the constitution, governing regions, provinces, and
municipalities1. The laws in question are constitutional law 1 of 22 November 1999
and constitutional law 3 of 18 October 2001. Furthermore, constitutional law 2 of
31 January 2001 grants special statute regions administrative powers relating to self-
government that run parallel to reforms under constitutional law 1/99, regulating the
form of government and statutory autonomy of ordinary regions.
1.1.1.1 Reforms concerning the statutory autonomy of regions
Constitutional law 1/99 regulates procedures for the approval of statutes for ordinary
regions, and the contents thereof. The most significant reform regarding approval
1
Under Article 131 of the constitution "The following regions have been established:
Piedmont, Valle d'Aosta, Lombardy, Trentino-AltoAdige/Südtirol, Veneto, Friuli-Venezia
Giulia, Liguria, Emilia-Romagna, Tuscany, Umbria, Marche, Lazio, Abruzzi, Molise,
Campania, Puglia, Basilicata, Calabria, Sicily, Sardinia".
With regard to special statute regions, Article 116(1) and (2) provides that “Friuli-Venezia
Giulia, Sardinia, Trentino-Alto Adige/Sudtiröl and the Valle d'Aosta are granted specific
forms and conditions of autonomy under the terms of special statutes governed by
constitutional law.
The Trentino-Alto Adige/Südtirol region is made up of the autonomous provinces of Trento
and Bolzano."
46
procedures is that these statutes are no longer subject to approval by an Act of
Parliament, as stipulated in the previous constitution, but through strengthened
regional procedures. Revised Article 123(2) of the constitution thus stipulates that
statutes are to be approved twice by an absolute majority of the regional council at
two separate sittings that are separated by a period not inferior to two months. The
statute should be published following the second approval. If one fiftieth of the
regional electorate or one fifth of the regional council so request, a referendum on the
statute may be held within three months of publication. The statute will not be
adopted unless it is approved by a majority of valid votes. Furthermore, the
referendum for the adoption of the statute is not subject to a turn-out quorum2.
The government may challenge the constitutionality of a regional statute by bringing

it before the Constitutional Court within 30 days of its publication (see Constitutional
Court ruling 304/023)4.
With regard to the content of the new statutes, revised Article 123 identifies certain
essential aspects that must "comply" with the constitution. The concept of
"compliance" has recently been defined by the Constitutional Court, which ruled that
statutes "must comply with the precepts and principles that derive from the
constitution"5.
2
Minimum percentage turn-out of eligible voters required to validate the referendum
3
For a commentary on ruling 304/02, see Mangiameli S. (2002), pp. 2358-2365
4
For government control over regional statutes, see Olivetti M. (2002), p. 103 et seq.
5
Rulings 304/02, 196/03 and 2/04 in www.giurcost.org
47
Article 123 identifies six specific areas which are to be governed by the regional
statutes: the form of government6, the fundamental principles underlying organisation
and administration, the right of initiative, referendums, the publication of laws and
regulations, and the composition and organisation of the regional council (regional
parliament).
Furthermore, in constitutional case 313/03, the Constitutional Court ruled that, since
the regional statute regulated relations between the regions' constitutional bodies, it
was the instrument best suited to designate the competent authority for approving
regional regulations. Needless to say, this does not exclude the possibility that several
institutions might share such regulatory powers. In such cases, this would enable
regional law to "regulate and administer such powers according to the matter to be
regulated and within the discretionary scope that the law conferred upon the
regulatory authority"7.
Other areas to be governed by the statutes, in accordance with the increased

legislative powers devolved upon the regions under constitutional law 3/01, might
include "programmatic" provisions and provisions of principle8, or the identification
of principles for regional organisation and regulations; under law 3/01, these matters
now fall within the exclusive legislative remit of regional authorities. The statutes
could also be used to further develop principles mentioned in revised Title V, such as
6
In constitutional case 196/03, in www.federalismi.it , the Constitutional Court ruled that the
concept “form of government” must also include the regional bodies’ prorogatio, which
should, at least in principle be governed by the regional statute except in exceptional cases
where dissolution has been ordered in accordance with Article 126(1) of the Constitution.
7
For a commentary on ruling 313/03, see Caravita (2003); Lucarelli A. (2003); Salvemini L.
(2003); Balboni E. (2003); see also ruling 324/03 in www.federalismi.it
8
Programmatic provisions - unlike preceptive provisions, which are addressed to all those
who are subject to the legal order – are addressed to the legislator, who is responsible for
their actual implementation.
48
the "removal of obstacles that prevent men and women from participating in social,
cultural and economic life on equal terms" and the "promotion of equal access to
elected office for men and women" (Article 117(7) and Constitutional Court ruling
49/03) and the principles of vertical and horizontal subsidiarity (Article 118). (For
recent developments on the same subject, see Constitutional Court ruling 2/049.)
1.1.1.2 Changes to the form of regional government
Constitutional law 1/99 defined a non-mandatory model for regional government

which overturned the previous model centring on a parliamentary assembly, and
made provision for regional presidents to be elected directly by the regional
electorate. Although the president’s authority has been reinforced, the form of
regional government remains parliamentary in character10.
According to the terms of new Article 126(3), a vote of no confidence is not the only
means whereby a regional council may be dissolved. Article 126 provides that certain
events affecting the directly elected president of the regional cabinet (or giunta) could
lead to the dissolution of the regional council and the resignation of the giunta,
namely the dismissal, permanent incapacitation, death or voluntary resignation of the
giunta president.
The revised text of the last paragraph of Article 126, however, prevents such action
from being taken in cases where the regional statute has provided for a form of
government other than the one proposed in the constitution and based on the election
of the giunta president by direct universal suffrage.
9
For a commentary on ruling 2/04, see Grassi S. (2004)
10
Caravita B. (2002), p. 61
49
In fact, whilst constitutional law 1/99 provides a model form of regional government
based on the election of the giunta president by direct universal suffrage, it
nevertheless grants the regional statutes the right to opt for a different form of
regional government, albeit within certain limits.
According to the terms of the final paragraph of revised Article 122, the regional
giunta president is to be elected by direct universal suffrage "unless the regional
statute provides otherwise. The elected president shall appoint and dismiss the
members of the giunta."
Hence, the regional statute is the source of law that governs the region’s form of
government and the fundamental principles underpinning its organisation and
administration. Such statutes must comply with the constitution, as specified in
revised Article 123(1) and confirmed by recent constitutional case law.
Should regions opt for a form of government other than the one defined in the
constitution, they nevertheless remain bound by other constitutional provisions, in
particular Article 126(2) entitling the council to initiate a motion of no confidence
against the giunta president. Furthermore, Article 126(3)11 specifies in its final
sentence that the voluntary resignation of a majority of the council’s members entails
the dissolution of the council and the resignation of the giunta.
In the recent Constitutional Court ruling 2/04, concerning the constitutionality of the
Calabrian regional statute, the Court went further in defining the limitations placed
upon the regional statute’s authority to decide the region’s form of government. In
particular, making reference to its own case law on compliance with the constitution,
it ruled that once a region opts for the model proposed by the constitution, (i.e. that
11
Mangiameli S. (2000), p. 572 et seq.
50
the regional president be elected by direct suffrage), the region can no longer alter
those constitutional provisions12.
Finally, given that the fiduciary bond is an inalienable aspect of regional government,
it follows that a regional statute may not adopt a presidential or "directorial" form of
government. A semi-presidential model is also excluded since the two-headed nature
of its executive is its defining characteristic. Such a situation would be inadmissible
at regional level since the giunta president is also the regional president.
1.1.1.3 The regions’ legislative powers over electoral matters (Article 122
of the constitution)
Other competences entrusted to the regions by constitutional law 1/99 concern the
regulation of the electoral system, and the ineligibility or incompatibilities of the
giunta president and the regional councillors, with due respect for the fundamental
principles of the constitution. Under Article 122(1), the establishment of fundamental
principles lies solely with the state, as do the elected bodies’ terms of office.
Article 122(2) states that a regional councillor may not at the same time be a member
of the national or European Parliament or of another regional council or giunta.
Constitutional Court ruling 196/03 recently defined the limitations of regional
legislative powers in electoral matters. A subsequent ruling, 2/04, on regional
legislative authority over electoral matters, specified that "statutory provisions that
directly regulate, at least in part, aspects of the electoral system which should be
governed by national law are inadmissible ... as are those that fall within the region’s
jurisdiction but are contrary, in spirit or fact, to the fundamental principles laid down
in Article 122 of the constitution".
12
For an opinion on the ruling see Grassi S. (2004) and Vizioli N. (2004). The regional statute
of Calabria may be accessed on www.federalismi.it
51
Parliament is currently examining draft legislation governing the underlying
principles. Nevertheless, regions are permitted to legislate on related matters before
the promulgation of the relevant regulatory principles (Constitutional Court rulings
304/02 and 383/02).

of government
Constitutional law 3/01, amending Title V of the constitution, profoundly modifies

the complex relationship between the state, the regions and the local authorities.
Under the terms of revised Article 114, "the republic is made up of municipalities,
metropolitan cities, provinces, regions and the state". The old text specified that "the
republic is made up of regions, provinces and municipalities". Revised Article 114(2)
extends the application of abolished Article 11513 (which referred exclusively to
regions) to cover regions, provinces, metropolitan cities and municipalities. The
constitution thereby expressly recognises, not only regions, but also municipalities,
provinces, and metropolitan cities as autonomous entities with their own statutes,
powers and functions14.
The constitution therefore remains the guarantor of self-government powers and

defines relations between the state and local authorities15.
13
Article 115, which was abolished under Constitutional law 3/01, specified that "the regions
are autonomous entities having their own powers and functions in accordance with the
principles laid down in the Constitution".
14
With specific reference to local authorities, under revised Article 117, the state has exclusive
legislative powers over electoral matters, and over the fundamental governing and
administrative bodies of municipalities, provinces and metropolitan cities.
15
Caravita B. (2002), p. 33
52
Article 114, final paragraph, affirms the role of Rome as the capital of the republic
and specifies that its status must be governed by national law.
Revised Article 114 thus places the components of the republic on a broadly equal
legal footing but with differing competences, as constitutional law 3/01 abolished the
heteronomous control of one component over another.
In particular, the constitution no longer provides for state control over regional laws
(Article 127 – old text)16, state control over regional acts (abolished Article 125)17, or
regional control over local authorities' acts (abolished Article 130). Constitutional law
3/01 also abolished the role of the government commissioner. This was a government
representative, based in each regional capital, who supervised the state's
administrative activities there and coordinated such activities with those of the region
(abolished Article 124).
Nevertheless, Title V of the constitution makes frequent reference to the concept of

economic and legal unity cited in revised Article 120(2), which lays down the terms
under which the state may substitute regions or local authorities. This paragraph
clearly serves to counterbalance the above-mentioned abolition of state control and,
most probably, to compensate for the deletion of the specific stipulation in the old
Article 117 that regional legislation must respect the national interest, a matter that
was left to the discretion of the national parliament.
16
Drago F. (2003a)
17
Corpacci A. (2001), p. 1321 et seq.
53
There are differing schools of thought as to whether the concept of national interest
survives in the revised Title V. According to some commentators18, although the
revised text does not explicitly refer to national interest, it is implied by the concept
of the "unity" and "indivisibility" of the republic referred to in Article 519. According
to other authorities, a generic "national interest" has ceased to exist and has been
replaced by other specific concepts: legal unity; economic unity; the setting of basic
standards for those civil and social rights which must be guaranteed throughout the
national territory (Article 117(2)(m)); exclusive state control over foreign policy
(Article 117(2)(a)); fundamental principles of national law governing concurrent
powers, including the coordination of public finance and taxation, and the
equalisation fund. Hence, the concept of "national interest" as a means of restricting
and assessing regional laws through (parliament and) the Constitutional Court is
substituted by a reference to enabling provisions that are applicable in separate and
distinct cases20.
Constitutional Court ruling 303/03 recognises that "the national interest no longer
constitutes a legal or substantive constraint on regional legislative powers".
Nevertheless, it points out that the Italian constitutional system possesses the means
to react to the need for national unity. In the above-mentioned decision, the Court
affirms that the Italian constitutional system contains devices that allow flexibility in
contexts where rights and responsibilities overlap in such a way as to impinge upon
the need for unity in innumerable aspects of life "which, as a matter of judicial
principle, rely upon the principle of unity and indivisibility laid down in Article 5 of
18
Barbera A. (2002)
19
Article 5 of the Constitution lays down that "The republic, which is one and indivisible,
recognises and promotes local autonomy. It fully applies administrative decentralisation of
state services and adapts its principles and methods of legislation to the requirements of
autonomy and decentralisation."
20
See Tosi R. (2002) and Anzon A. (2002b), pp. 213-215
54
the constitution". Basing itself on this premise, the Court cites Article 118(1) (see
point 1.1.2.4 below) as demonstrating such an element of flexibility. The paragraph
specifies that the administrative functions generally entrusted to municipalities may
be delegated to another tier of government to ensure uniform practice, in accordance
with the principles of subsidiarity, differentiation and adequacy. The Court considers
that when the need for uniform practice requires that administrative functions be
performed by the state: "legal principle dictates that even functions governed by the
subsidiarity principle should be administered and regulated by law. It therefore
follows logically that individual regions, with different laws, are unable to organise
and regulate administrative functions of national scope, and that such functions can
only be governed by national law"21.
21
For opinions on ruling 303/03 see Anzon A. (2003)a, Caravita B. (2003), D’Atena (2003)a,
Morrone A. (2003). See also ruling 370/03 wherein the Court reaffirms that "the national
interest no longer constitutes a legal or substantive constraint on regional or legislative
powers". See also the more recent ruling 6/04.
55
1.1.2.1 The redistribution of legislative and regulatory authority: the
integration of competences
Constitutional law 3/01, amending Article 117 of the constitution, redistributes

legislative and regulatory powers22 between the state and the regions, and lays down
the regulatory framework for local government.
With regard to legislative authority, revised Article 117 includes a list of matters that
fall under the exclusive authority of the state (paragraph 2), which did not appear in
the old Article 117. It further includes a much more extensive list of matters that are
subject to concurrent legislation of both the state and regions (paragraph 3), and a
concluding provision that assigns to the exclusive legislative authority of the regions
(also described as "residual" competences), matters that do not fall within the
exclusive remit of the state or the concurrent remit of the state and region
(paragraph 4).
22
Under Law 400/88, the state is responsible for "enforcement" legislation (governing the
enforcement of laws, legislative decrees and Community law); "implementing and
supplementing" legislation (laws that govern the enactment and implementation of laws,
legislative decrees on principles of law. Legislation on matters within the remit of the region
is excluded); "administrative" law (governing the administration and functions of public
administration in accordance with the relevant legal provisions; "independent regulations"
(governing matters not regulated by law or acts having force of law, provided that such
matters are not strictly matters of law); authorised regulations (concerning matters that are
not strictly governed by law foreseen by the constitution and which, falling under the
regulatory authority of the government, determine the general regulatory provisions and the
abolition of regulations in force, with immediate effect upon the entry into force of the
regulatory provisions). In the hierarchy of legislation, formal laws take precedence over
regulations. However, in some cases (independent and authorised regulations), regulations
have force of law in substantive terms. At a national level such provisions emanate from the
government. On a regional level, following the revision of Title V of the constitution, the
statute must specify which body (legislative assembly, regional government) or bodies
(both) have authority (Constitutional Court ruling 131/03). On this subject, see point 1.1.1.1
above.
56
In retaining concurrent legislative powers, extending the number of matters to which
they apply and broadening the regions’ scope for exercising these powers (which are
now their prerogative "barring" the State’s authority over fundamental principles and
no longer "with due respect for" the latter23), the revised constitution has clearly
opted for a federal model that aims to integrate rather than separate legislative
powers.
Nevertheless, it remains unclear whether it would be admissible, under the new Title
V, to introduce provisional national legislation on matters of concurrent competence
if the regional legislator failed to act, with such legislation remaining in force until
the regional legislator remedied this omission24.
The state’s lead-role in matters of concurrent competence – such as "the setting of

basic standards for those civil and social rights which must be maintained throughout
the national territory" and the protection of the environment25 – is surely indicative of
the 2001 constitutional legislator’s preference for a "cooperative federalist model". In
exercising such powers, the state is able to intervene in matters that fall exclusively
within the region’s legislative remit (see Constitutional Court rulings 282/02 and
536/02)26.
23
As provided under the old Article 117.
24
See Constitutional Court ruling 282/02 in Constitutional Jurisprudence 2002, see D’Atena
A. (2002b) p. 2026 et seq. See also ruling 303/03.
25
As interpreted in Constitutional Court ruling 407/02.
26
In ruling 282/02 in www.federalismi.it, regarding state authority over basic standards for
services relating to civil and social rights, the Court ruled that civil and social rights are not
"matters" in the strict sense of the word. They include all areas where the state legislator
should have the authority to introduce the necessary measures to ensure that all citizens
throughout the national territory have access to the same services, which are fundamental to
such rights. This being the case, such services may not be curbed or conditioned by regional
legislation.
57
The provisions of revised Article 117 of the constitution were implemented under
Act 131/0327.
Constitutional law 3/01 introduces a further new dimension to the distribution of

legislative powers, which is embodied in Article 116(3) of the constitution. This
establishes the right for ordinary statute regions to obtain "further forms and specific
conditions of autonomy" in matters subject to concurrent legislation, as well as in
certain specified matters subject to the state’s exclusive authority28.
27
Article 1(2) of Act 131 specifies that "State legislation regulating matters that are governed
by regional legislation will continue to apply after the present law has come into force and
until the relevant regional legislation is in place as per paragraph 3 and subject to any
subsequent rulings by the Constitutional Court. Similarly, regional provisions governing
matters within the state’s exclusive jurisdiction will continue to apply until the relevant
national legislation is in place, and subject to any subsequent rulings by the Constitutional
Court".
Article 1(3) of Act 131 specifies that "in matters subject to concurrent legislative powers,
the regions shall exercise their legislative authority within the framework of the fundamental
principles laid down by the state or, in the absence of expressly stated principles, in
accordance with principles that may be inferred from state legislation in force". With a view
to orientating the state and regional legislative process prior to the entry into force of
parliamentary Acts laying down the fundamental principles, Article 1(4) of Act 131
delegates to the government the responsibility of adopting, "within one year of the present
law’s entry into force", one or more legislative decrees of a purely indicative nature,
outlining the fundamental principles that may be inferred from existing legislation on
concurrent legislative powers and based on the principles of exclusiveness, adequacy,
clarity, proportionality and homogeneity, as well as other criteria specified in Article 1(5)
and (6).
28
This refers to some of the matters mentioned in Article 117(2) of the constitution: (l)
administration of law and order (n) general provisions on education and (s) protection of the
environment, ecosystem and cultural heritage.
58
According to some authoritative legal opinions29, in substantive terms, "promoting
autonomy in this manner should result in a transition from concurrent powers to full
regional authority, and, in the case of matters referred to under the above-mentioned
subparagraphs, a transition from exclusive state authority to concurrent authority".
At the initiative of the region concerned, and after consultation with the local
authorities, the above-mentioned further conditions of autonomy may be granted to
other regions through national legislation, subject to respect for the principles of
financial autonomy laid down in Article 119. Under Article 116, such legislation may
be passed subject to an absolute majority in the houses of parliament, and contingent
upon prior agreement between the state and the region concerned.
Furthermore, the constitutional legislator of 2001, mindful of the fact that ordinary
statute regions might now have broader autonomy than had previously been granted
to special statute regions, established the principle whereby the provisions of
constitutional law 3/01 became applicable to special statute regions and to
autonomous provinces "in all instances where those provisions grant greater
autonomy than had previously been accorded" (constitutional law 3/01, Article 10)30.
Revised Article 117 grants the state the power to issue by-laws in matters that fall
within its exclusive jurisdiction, insofar as it does not devolve this power to the
regions. In any other matters, the power to issue by-laws is vested in the regions.
Finally, it grants local authorities regulatory power with respect to the organisation
and fulfilment of the functions assigned to them (Article 117(6)).
29
Martines. T., Ruggeri. A., Salazar C (2002), p. 21
30
See Constitutional Court ruling 8/04.
59
1.1.2.2 The constitutionality of substitution by the state. The regions’
substitution powers
As previously specified, constitutional law 3/01 explicitly gives "the government" the
authority to substitute regional and local bodies in order to safeguard legal unity,
economic unity, public safety and security, and basic social services, and to ensure
compliance with international and Community law31.
However, it remains unclear whether the government is entitled to intervene at a

legislative, as well as an administrative, level. According to one school of thought32,
such a possibility is excluded by the explicit reference, in Article 120(2) of the
constitution, to the substitution of "bodies" and, more generally, by the "manifest
intention of the constitutional legislator to uphold previous provisions concerning the
state's powers to substitute the regions, based on ordinary legislation preceding the
Bassanini reform", which restricted state intervention to administrative functions
alone.
Nevertheless, it must be noted that, in deference to traditional constitutional case law

on substitution powers, Article 120(2) gives state law the responsibility of
establishing procedures to ensure that such powers are exercised in accordance with
the principles of subsidiarity and loyal cooperation33.
31
Article 120(2) of the constitution provides that "the government may substitute the bodies of
the regions, metropolitan cities, provinces and municipalities in case of non-compliance
with international or Community legislation, grave risk to public safety or security, or
wherever necessary in order to safeguard legal or economic unity, or basic social services
pertaining to civil and social rights, irrespective of local government boundaries. The law
shall lay down appropriate procedures to ensure that substitution powers are exercised in
compliance with the principles of subsidiarity and loyal cooperation".
32
Anzon A. (2002)b, p. 217
33
See Dickmann R. (2003), p. 485 et seq., on substitution powers.
60
Furthermore, in its recent ruling 43/04, the Constitutional Court reaffirmed that
"Article 120(2) does not, as a matter of principle, exclude the possibility that, in
matters which fall within regional jurisdiction, and in regulating the exercise of
municipal administrative functions in accordance with Article 117(3) and (4), and
Article 118(1) and (2), regional law could provide for regional substitution powers
for mandatory acts or activities, in case of non-performance by the competent body,
in order to ensure that unity is not compromised by that non-performance".
1.1.2.3 Prohibition of State acts intended to guide or coordinate matters

governed by the concurrent legislative powers of the regions
Act 131/0334 implementing revised Title V of the constitution no longer makes any
reference to state acts guiding or coordinating regional administrative activities,
whose regulation had been reformed under Article 8 of constitutional law 59/1997.
In the light of revised Title V’s silence on this subject, and shortly after constitutional
law 3/01 came into force, legal doctrine35 and administrative case law supported the
view that the prohibition of State acts guiding or coordinating concurrent legislative
powers arose directly from revised Title V. Under revised Article 117(3) and (6), the
state may only intervene through laws of principle (see Council of State, Consultative
section, plenary session of 11 and 22 April 2002, and Regional administrative court
of Lombardy ordinance 546/02)36.
34
For a commentary on Act 131/03, see Carli M. (2003); also Bassanini F. (edited by), (2003),
and a compilation by various authors - A.A. VV (2003a).
35
Martines T., Ruggieri A., Salazar C. (2002), p. 248-249
36
For the principle of subsidiarity, see previously cited Constitutional Court rulings 303/03
and 4/04. For a commentary, see Bartoli S. (2003).
61
1.1.2.4 Revised Article 118 of the constitution, upholding the principle of
subsidiarity
The reference to the subsidiarity principle in Article 118(1) and (3) is another
characteristic element of the cooperative federalist model promoted by the 2001
constitutional reform.
The principle of subsidiarity is referred to in its vertical sense, in that the constitution
expresses a preference for administrative functions being carried out by the local
authorities that are closest to the citizen (Article 118(1)). It is also referred to in its
horizontal sense, in that it promotes the public-interest initiatives of citizens, be they
individuals or associations representing civil society. More specifically, Article
118(1) and (3) specify that:
1. Administrative functions are assigned to municipalities except in cases where the

need for uniform practice requires that they be assigned to provinces, metropolitan
cities, regions or the state, in accordance with the principle of subsidiarity.
3. The state, regions, metropolitan cities, provinces and municipalities are to promote
the independent initiatives of citizens, be they individuals or associations, in the
performance of activities that are in the public interest, in accordance with the
principle of subsidiarity.
62
1.1.2.5 The principle of loyal cooperation: absence of provisions making
express reference to said principle or to the establishment of
permanent debate and coordination forums for the state, regions
and local authorities
Revised Title V of the constitution does not pay sufficient attention to the principle of
loyal cooperation between the state and the regions. This principle, which is only
referred to in Article 120(2), seeks to avoid formalistic separations of power between
the two tiers of government in order to ensure that their respective functions are
performed in as efficient and as coordinated a manner as possible, and in accordance
with the constitutional principle of well-managed public administration. The principle
was established by constitutional case law, which traditionally cites Article 5 of the
constitution as its premise37. (See Constitutional Court rulings 359/85; 151 and
153/86; 214/88; 101 and 138/89; 21 and 351/91; 389 and 520/95; 242/97393/99.)
In 1997, Act 59, for the first time, transmuted the concept from case law to statutory
law. Since then, it has even been cited by other legal texts as a reference for relations
between regions and local authorities (see legislative decree 267/00). Despite this, the
2001 constitutional legislator chose not to include it in the revised constitution.
The only new element introduced by constitutional law 3/01 concerning loyal
cooperation is found in Article 11, whereby parliamentary standing orders may
provide for the participation of representatives from regions, provinces and other
local authorities in bicameral commission proceedings that concern regional affairs.
37
Article 5 of the constitution states that "The republic, which is one and indivisible,
recognises and promotes local autonomy. It implements extensive administrative
decentralisation of public services and adapts its principles and methods of legislation to the
requirements of autonomy and decentralisation."
63
However, according to some legal commentators, regional and local participation, as
provided for in constitutional law 3/01, would appear to be "purely functional (and
not structural), being conducted on an ad hoc basis, within the limits to be established
by parliamentary regulations"38.
Furthermore, under Article 11 of constitutional law 3/01, when the joint commission
expresses a negative or not entirely positive opinion regarding amendments to draft
legislation concerning matters of concurrent jurisdiction or federal taxation, and the
examining commission has failed to reach a compromise, the final decision on the
relevant passages rests with the Assembly, on the basis of an absolute majority.
Most legal commentators feel that these procedures are inadequate for ensuring
proper regional participation.
In fact, several authorities emphasise the need for permanent cooperation bodies at
constitutional level, for instance a "house" or a "senate" of regions that could become
"the region's forum for dialogue with central government ..., and central
government’s instrument for dialogue with the regions"39. The establishment of a
"house of regions" would also ensure regional participation in the ultimate authority,
i.e. the constitutional reform process.
1.1.2.6 Cooperation forums established by state legislation, and the role

of agreements between the state and the regions
At present, the only permanent forums for cooperation between the state and regions
on the one hand, and the state, regions and local authorities on the other, are the
38
Martines T., Ruggeri A., Salazar C. (2002), p. 103
39
Caravita B. (2002), p. 160-161
64
State-Regions Conference and the Joint Conference, i.e. the Joint State-Regions-
Cities-Local Authorities Conference, whose functions were recently defined in
legislative decree 281/97. This decree also encompassed the State-Cities Conference,
as a forum for dialogue between the state and local authorities.
However, the main shortcoming of such conferences is that only regional executive
bodies are represented.
With regard to functions, the State-Regions Conference must be consulted on draft

legislation and legislative decrees or government regulations that concern the
competences of regions and autonomous provinces, whereas the Joint Conference
meets to deal with matters and responsibilities that are common to regions, provinces,
municipalities and mountain communities.
The State-Regions Conference and the Joint Conference are both authorised to
promote and approve agreements between the government and the regions, in the first
case, and the government, regions, provinces, municipalities and mountain
communities, in the second case. These agreements are designed to coordinate the
exercise of each authority’s competences and coordinate activities of joint interest,
and to ensure the exchange of information between the authorities concerned40.
The problem presented by state-region agreements is substantially a matter of where

to situate them within the legislative framework. In fact, in order to gain force of law
40
When legislative decree 281/97 came into force, the state and the regions concluded an
important agreement on health, which was later implemented through Act 405/01.
Following the reform of Title V of the constitution, the state and the regions entered into
another agreement on tourism, which falls within the regions’ exclusive jurisdiction. This
agreement was later implemented through prime ministerial decree (DPCM) of 13
September 2002. Other agreements between the state and specific regions concern the
implementation of state legislation regarding public works.
65
they must be transmuted into state laws or into prime ministerial decrees.
Nevertheless, Constitutional Court ruling 197/0341 would appear to have implicitly
recognised the regions’ authority to enter into agreements to regulate matters that fall
within their exclusive jurisdiction (for previous case law see Constitutional Court
rulings 206 and 437/01)42.
In the wake of revised Title V, and in particular the new distribution of legislative
and regulatory powers established under constitutional law 3/01, a more thorough
analysis of both the scope and legal efficacy of these agreements is necessary. In
particular, concerning matters that fall within the regions’ exclusive jurisdiction, such
agreements would, in all probability, apply primarily to sectors that nevertheless
require a degree of coordination at national level. On the other hand, in matters of
concurrent authority, an agreement could serve as a state-regions coordination
mechanism for identifying the most congruent form of application of state legislation
principles, even at the level of secondary and administrative application.
Finally, reference should be made to two other bodies: the Conference of Regional
Presidents, which is the forum for the heads of regional executive bodies; and the
Conference for Presidents of the Assembly and Regional and Provincial Councils,
which is the forum for the presidents of Italian regional councils.
41
See www.federalismi.it
42
See recent Constitutional Court rulings 313/03 and 6/04 on the same subject.
66
1.1.2.7 The constitutional enshrinement of the Council of Local
Authorities (revised Article 123(4))
The revised Article 123(4) of the constitution requires new regional statutes to set up
a Council of Local Authorities as a forum for internal regional coordination, i.e. "a
body for consultation between the region and the local authorities".
According to some legal authorities, "the revised constitution has paid greater
attention to coordination between subnational authorities than to state-region
relations, even though the statutory provisions restrict the council to a consultative
role"43. Prior to constitutional law 3/01, Article 3(5) of legislative decree 112/98
granted regions the authority to establish, within the framework of their legislative
autonomy, "mechanisms and procedures for dialogue and coordination, which could
even have a permanent nature, with a view to establishing structural and functional
forms of cooperation that would ensure the cooperation to coordinate the respective
activities of regions and local authorities". Many regions implemented this provision
by establishing local government "conferences".
The composition and role of the Councils of Local Authorities are still being debated,
together with the question of whether their opinions should be binding.
Three important local authority associations are currently operative in Italy: the
National Association of Italian Communes (municipalities) (ANCI), the Union of
Italian Provinces (UPI), and the National Union of Mountain Communes
(municipalities) and Communities (UNCEM). These associations have a high level of
43
Martines T., Ruggieri A., Salazar C. (2002), p. 252-253.
67
local representation and are represented in various political institutions at national,
supranational and Community level. Finally, we should mention the Italian
Association of the Council of European Municipalities and Regions (AICCRE)44.
1.1.3.1 The National Association of Italian Communes (municipalities) -

ANCI
ANCI was founded in 1901 and currently represents 6,406 of the 8,104 Italian
municipalities, i.e. 90% of the overall population. ANCI represents its members at
institutions established under national law such as the State-Cities Conference and the
Joint Conference, and also at European institutions such as the Committee of the
Regions. It also promotes the role of its members and coordination between them, as
well as their international relations and decentralised international cooperation
activities. In this capacity, it is a member of international institutions such as the
International Union of Local Authorities (IULA) and the Congress of Local and
Regional Authorities of Europe (CLRAE). ANCI established Ancitel 25 years ago in
order to provide local authorities with videotel information and consultation services
on matters relevant to them. In recent years, it has added further important services
(Anciform, Ancicnc, Anciservizi), known collectively as "the ANCI group". Within
each region, ANCI's regional associations, whose organisational structures mirror the
national structure, fulfil the same role and objectives as the national association.
In 1999, the "coordinating body for metropolitan city mayors" was added to ANCI.
This provides a discussion forum where all metropolitan areas can meet to exchange
experiences. Coordination activities are divided into three categories: institutional,
economic and organisational.
44
For methods of cooperation, see points 1.1.1 and 1.1.2 above.
68
1.1.3.2 The Union of Italian Provinces – UPI
The Union of Italian Provinces (UPI) was formed in 1908 and currently comprises
100 Italian provincial authorities and 14 metropolitan cities. UPI's main objectives
include promoting and facilitating the activities of provincial authorities and
metropolitan cities, and representing its members’ interests at national, regional and
European institutions. It also promotes initiatives that enhance the value of local,
provincial and metropolitan city institutions, in furtherance of democracy, efficiency
and citizen participation.
UPI's regional unions, in addition to acting as mouthpieces for the provinces and
metropolitan cities at regional level, help to define the national union’s policies and
participate in their implementation at regional level. Upitel, which offers
technological administrative support to members, was set up to provide a "single
computer network for Italian provinces".
1.1.3.3 The National Union of Mountain Communes (municipalities) and

Communities – UNCEM
The National Union of Mountain Communes (municipalities) and Communities

represents 10 million Italian citizens distributed over 54% of the national territory.
Founded 55 years ago, UNCEM includes 361 mountain communities and 4,201
municipalities that are classified as mountainous or partly mountainous, a number of
provincial authorities and other authorities operating in mountain areas. The
association aims to promote the socio-economic, civil, spatial and environmental
development of mountain areas. To this end, it maintains relations with other local
government and regional associations, and participates in the State-Cities Conference
and the Joint Conference. Within the framework of decentralised international
69
cooperation, and for the purpose of furthering the establishment of a sustainable
development policy for mountain regions, it participates in the work of the Congress
of Local and Regional Authorities of Europe (CLRAE), the European Association of
Elected Representatives from Mountain Areas (AEM), and the Alpine Convention, as
well as in the activities of the Committee of the Regions.
1.1.3.4 The Italian Association of the Council of European Municipalities

and Regions - AICCRE
Local government associations are also active in the international arena through their
participation in international associations, particularly at European level. Founded in
1951, the Council of European Municipalities and Regions (CEMR) currently
includes 46 regional and local government associations from 33 European countries
and has had a representation at the European Commission for 15 years. At the time of
writing, AICCRE - the Italian associate member of CEMR - includes 84% of the
provinces and 30% of the municipalities (communes) in Italy. The association seeks
to further "the development of European Member States that are founded on the full
recognition, reinforcement and enhancement of local and regional self-government"
(AICCRE Statute, Article 1, 17 February 2003). AICCRE’s objectives include the
promotion of exchanges and twinning between European local and regional
authorities, preservation of the ethnic, linguistic and cultural identities of different
regions, and coordination of its members’ initiatives to promote a united Europe
based on federalism.
70
metropolitan cities
One of the first responses to the need for providing Italian cities with adequate
instruments to govern themselves dates back to 1990 (Act 142/1990 on the regulation
of local authorities). Ten years later, T.u.e.l 267/2000, the consolidating statute on
local authorities, laid down more detailed provisions for the establishment of
metropolitan cities and areas.
However, the governance of metropolitan cities in special statute regions was

entrusted to the legislative authority of the region concerned.
According to Article 22(1) of the consolidating statute (T.u.e.l), "the areas

comprising the municipalities of Turin, Milan, Venice, Genoa, Bologna, Florence,
Rome, Bari, Naples and other municipalities that are closely integrated with them …"
are considered to be metropolitan areas. In the above-mentioned areas, "the principal
municipality and its geographically contiguous municipalities ..." may constitute a
metropolitan city (T.u.e.l Article 23(1)), having the "functions of a province" (T.u.e.l
Article 23(5)). Metropolitan cities in special statute regions include Cagliari
(Sardinia), Catania, Messina and Palermo (Sicily), and Trieste (Friuli-Venezia
Giulia).
Constitutional law 3/01 granted metropolitan cities constitutional recognition for the
first time. Revised Article 114 of the constitution thus provides that "the republic is
made up of municipalities, provinces, metropolitan cities, regions and the state.
Municipalities, provinces, metropolitan cities and regions are autonomous entities,
having their own statutes, powers and functions in accordance with the principles
enshrined in the constitution. Rome is the capital of the republic. Its states is
governed by national law." Furthermore, metropolitan cities are once again
71
mentioned in Article 118 of the constitution, which regulates the distribution of
administrative functions amongst state, regions and local authorities, and in
Article 119, which places them on equal footing with regions, municipalities and
provinces as regards financing.
Article 2 of Act 131 of 5 June 2003, implementing constitutional law 3/01, requires
the government to issue, within one year of its entry into force, one or more
legislative decrees specifying the basic functions that metropolitan cities, as well as
municipalities and provinces, must perform for the administration and fulfilment of
the relevant community’s primary needs. The above-mentioned law further requires
the government, in its capacity as national legislator, to revise legislation governing
local authorities so as to ensure compliance with constitutional law 3/01.
Ad hoc governance of metropolitan cities became a necessity due to the economic

and demographic preponderance of Italy's 14 metropolitan cities, which house 40%
of the Italian population and generate 42% of national wealth45.

In recent years, the Lega Nord (Northern League) is undoubtedly the political
movement that has placed the federalisation of Italy at the top of its political agenda.
Established in 1989 following the merger of a number of centre/northern protest
movements, the Lega Nord initially adopted separatist policies. However, nine years
later, abandoning its more radical secessionist stance, it argued forcefully in favour of
institutional processes of devolution to subnational authorities, specifically citing the
45
See Declaration of intent of the mayors of the metropolitan cities, 21.12.2000
72
example of Scotland46. Nevertheless, the first significant steps towards Italian
regionalisation/federalisation were applied to the institutional framework during the
XIII Legislature, when the Lega Nord was not a member of the ruling centre-left
coalition. As specified above, constitutional laws 1/99, 2/01 and 3/01 amended a
number of articles in Title V of Part II of the constitution. The reforms concerning
governance and statutory autonomy granted by constitutional law 1/99 (see
point 1.1.1) to ordinary regions were extended to special statute regions. Prior to the
adoption of these laws, the reform process had evolved merely through doctrinal and
political debate, amendments to ordinary legislation and failed constitutional reforms
such as the Labriola draft bill of 1992, the Speroni proposal of 1995, and the text
drawn up by the D’Alema commission for constitutional reform.
The reform process of Title V of the constitution also involved the limited
participation of Italian citizens through a referendum approving the amendments
introduced by constitutional law 3/01, in accordance with Article 138 of the
constitution. The referendum of 7 October 2001 produced a turn-out of 33.9% and
resulted in a 64% majority of valid votes in favour of the constitutional reform. The
drafting of implementing legislation for Title V was carried out by the centre-right
coalition that came into power following the 2001 national elections. Eighteen
months after constitutional reform law 3/01 came into force on 8 November 2001, the
Italian Parliament approved Act 131 on 5 June 2003.
In April 2003, whilst the implementing legislation for revised Title V was still being
examined by parliament, the government drew up a bill amending revised Title V.
This came to be known as "the reform of the reform" (constitutional reform bill
amending Title V of the constitution, adopted by the government on 11 April 2003).
Umberto Bossi, leader of the Lega Nord and minister for institutional reform and
46
Vandelli L. (2002), p. 21, 25; Colarizi S. (1996), pp. 742-745
73
devolution at the time of writing, has since presented a constitutional bill proposing
the devolution of exclusive legislative authority over health, the education system and
local policing to the regions (Atto Senato - A.S. 1187 - draft constitutional bill
amending Article 117 of the constitution). At the time of writing, the bill is being
debated in parliament, as is the draft legislation amending the second part of the
constitution, referred to as the Lorenzago draft law, which was adopted by the
government on 10 October 2003. The draft law proposes reforms that would affect
regions, including a federal senate (upper house) and regional involvement in the
appointment of constitutional judges47.
The organisation of regional parties and political movements does not differ
substantially from that of national parties in so far as parties and movements are
divided into national, provincial, inter-municipal and municipal sections. Their
organisation reflects the size and political strength of the party. For instance, the Lega
Nord intends to open sections at all the above-mentioned levels48 whilst the Union
Valdôtaine only has a municipal section49. In comparison with national parties,
regional parties pay considerable attention to associations linked to their respective
parties. The Lega Nord leads in this respect, with 23 associations operating in the
social, cultural and religious spheres.
47
Constitutional bill 2544, in www.federalismi.it
48
Statute of the Lega Nord, 2002, Article 2
49
Statute of the Union Valdôtaine, Article 11
74
1.2.2 Regional parties
Italian regional parties came into being after the second world war, and for the most
part are still in existence. Their emergence is closely linked to the end of fascism and
of its policy to "Italianise" all parts of the Italian state. In the case of Alto Adige
(South Tyrol/Südtirol) and the Valle d'Aosta/Vallée d'Aoste, where the majority of
inhabitants are German and French speaking respectively, the first regional parties
were founded at the time of the liberation of Italy by the allied troops. The Südtiroler
Volkspartei and the Union Valdôtaine were thus founded in 1945 to promote the
autonomy of these regions and to safeguard their ethnolinguistic identity. Also in
1945, and for the same reasons, the Association for Regional Autonomy Studies was
established in Trentino. This gave rise to various political movements including the
Partito del Popolo Trentino Tirolese (party of the Tyrolean population of Trentino),
which evolved into the present-day Partito Autonomista Trentino Tirolese (Tyrolean
autonomist party of Trentino) (Paat Statute, 1999, Article 1). On the main Italian
islands, i.e. Sardinia and Sicily, local parties defending their geographic and
ethnolinguistic particularities had already come into existence before the end of the
second world war. The establishment of the Movimento Indipendenza Sicilia (Sicilian
independence movement) (MIS) coincided with the landing of allied troops in Sicily
in 1943, whilst the Partito Sardo d’Azione (Sardinian action party) (PSDAZ) dates
back to 1921. In 1946, when the Constituent Assembly met to draw up the future
Italian constitution, the MIS and PSDAZ were represented by four and two members
respectively. Given the geographical, political and ethnolinguistic peculiarities of
these islands, the Constituent Assembly had already envisaged a special autonomy
regime for them50. At the time of writing, there are 20 Italian regions (Article 131 of
the constitution), five of which - Friuli-Venezia Giulia, Sardinia, Sicily, Trentino-
50
Martines T. (1988), pp. 757, 771
75
Alto Adige/Südtirol (South Tyrol) and Valle d'Aosta – "have their own special
conditions of autonomy [….]" (Article 116(1) of the constitution).
Political and administrative elections in recent years reveal a rather patchy picture as
regards regional parties51. In the central and northern regions, i.e. Piedmont, Liguria,
Lombardy, Veneto, Emilia-Romagna, Tuscany and Umbria, the Lega Nord has wide
representation. The Lega Nord includes the Liga Veneta, Lega Lombarda, Piemont
Autonomista, Uniun Ligure, Alleanza Toscana-Lega Toscana-Movimento per la
Toscana, and Lega Emiliano-Romagnola (Lega Nord Statute 2002, Article 4). In the
other ordinary statute regions, in particular Abruzzo, Basilicata, Calabria, Campania,
Marche, Molise, Lazio and Puglia, there are no regional parties whose defining
ideology is autonomy. The nomination of giunta presidents (law 43/95) and,
subsequently, their election by direct suffrage, resulted in "a restructuring of the
political system around the person of the president", producing what has been
described as a "personal party"52 at regional level. This has led to a considerable
weakening of the long-standing role of parties as catalysts for consensus53. No such
party has, however, gained significant political weight. The five remaining special
statute regions have deeply rooted regional parties whose political weight
nevertheless varies greatly from one region to another. The most successful are
undoubtedly the Südtiroler Volkspartei and the Union Valdôtaine. During the last
regional elections, the Südtiroler Volkspartei obtained 21 of 35 seats in the Province
of Bolzano54, while the Union Valdôtaine won 18 of 35 seats at the Valle d'Aosta
51
See election results, in particular, regional elections on the Ministry of the Interior website
http://www.interno.it/sezioni/attivita/Le%elezioni/s_0000000050.htm and
http://cedweb.mininterno.it:8900/ind_regio.htm
52
Calise M. (2000), p. 5
53
Olivetti (2002), p. 312
54
See Ministry of the Interior, regional elections, Trentino-Alto Adige of 22 November 1998:
http://cedweb.minintero.it:8900/ind_regio.htm
76
regional elections held on 8 June 2003, thus obtaining an absolute majority in the
regional council55.
Very few regional parties have won seats in the national parliament. They hold fewer
than 30 seats in the senate56, and no more than 40 in the chamber of deputies. The
regional party with the greatest overall representation is the Lega Nord, which is part
of the Casa delle Libertà coalition which won the 13 May 2001 elections. The Lega
succeeded in securing three ministries: justice, institutional reform and devolution,
and labour and social policy.
At regional level, several statutes drafted since constitutional laws 1/99 and 3/01,
have given full recognition to the principle of cooperation, and have established
regional economic and labour councils to act as consultative, study and research
bodies of the regional council and the giunta in the following fields: economic,
social, and financial policy; budget and planning; socio-economic development;
labour market and employment.
As has been observed by some legal authorities, the Council of Local Authorities
referred to in Article 123 of the constitution could serve to represent the interests not
only of subnational authorities, but also of administrative and social authorities,
thereby ensuring that the latter have a forum for dialogue with the region.
55
For further analysis, see Sterpa, A.
56
Senate elections, 13 May 2001: http://www.parlamento.it/leg/14/Elezioni/ef_naz.htm
77
LEVEL
National elections
During the first forty years of the Italian republic (1947-1987), the national political
landscape was essentially characterised by two constants. The first is the continuity of
parties: most of the parties that stood for the elections of the Constituent Assembly
were still active in the late 1980s57. The second is the parties’ stable political strength.
Barring a few specific exceptions, the voting percentages of individual parties rarely
fluctuated by more than a single percentage point between one election and the
next58. Turn-out fluctuated between 93% and 89%, showing a downward trend, whilst
the number of blank votes rarely exceeded 2%. Meanwhile, regional political parties'
representation in the two chambers of parliament gained strength slowly but surely.
Regional political forces with well-established local roots, such as the Partito Sardo
d’Azione, the Südtiroler Volkspartei and the Union Valdôtaine, have almost
invariably succeeded in obtaining one or more seats at national level. Nevertheless,
the number of parliamentary seats held by the representatives of regional parties
never exceeded six or seven in total59.
Liga Veneta first gained a representative in the two chambers of parliament in 1983.
According to research carried out in 1990 by Istat, several new parties and/or
movements began to emerge from 1987 onwards. Some of these embraced
57
Istat, 1999, p. 59
58
Istat, 1990, p. 60
59
Istat 1990, p. 35-59
78
environmental or "green" concerns, while others presented a populist challenge to
national centralisation and/or an extreme regionalist stance (Liga Veneta, Lega
Lombarda)60.
During the 1990s, the Italian political landscape changed dramatically. At the 1992
elections, Lega Nord won 10.3% of the votes. This was a regional party that opposed
the party system and was anti-centralisation and anti-south. The Lega provided a
mouthpiece for the dissatisfied industrial classes and areas of northern Italy. The
Lega's success combined with other domestic61 and foreign62 political phenomena to
provoke substantial changes in the Italian political arena and particularly affected the
traditional parties. The 1990s thus witnessed the breakdown of two of Italy’s major
parties, the Christian Democratic Party and the Communist Party, and the birth in
1994 of Forza Italia, the party founded by the subsequent Prime Minister, Silvio
Berlusconi. Forza Italia currently has the highest electoral representation in the
national parliament. One decisive factor in the evolving Italian landscape was the
referendum held on 18 April 199363. On that occasion, 83% of the electorate voted to
abolish the proportional representation system, effectively overturning the traditional
balance of power between political parties and initiating the transition and
transformation of the Italian political system64.
60
Istat 1990, p. 55
61
In particular, "Tangentopoli" (Bribe-opolis). This was an inquiry conducted by Milan
investigating magistrates on bribes that had passed from private enterprises to political
figures on behalf of their parties in exchange for contracts subject to public tender.
62
Including events in eastern Europe and the flagging global economy
63
Parliament implemented the reform through Acts 276 and 277 in 1993. Under the new
electoral system, 75% of the members of each chamber of parliament are elected according
to the single-member system. The remaining 25% are assigned according to proportional
representation.
64
Diamanti I./Mannheimer R. (1994), p. 9
79
The 27 March 1994 elections, which were carried out under the new system, revealed
strong voter support for Forza Italia and its allies, mainly Lega Nord and Alleanza
Nazionale (National Alliance). Together they obtained 58% of the seats in the
chamber of deputies and 49.2% of those in the senate65.
Diamanti and Mannheimer explain Forza Italia’s success by pointing out that
"[Berlusconi] transferred northern industrial leadership to Rome. However, in doing
so he 'nationalised' and therefore neutralised the tensions that the Lega had previously
triggered and stifled the confrontations that had emerged vis-à-vis the south"66.
Nevertheless, northern Italian voters still strongly supported the policies of the Lega
Nord, which succeeded in winning 180 parliamentary seats.
Two years later, in 1996, Lega Nord decided to leave the coalition, triggering a crisis
in the Berlusconi government and the calling of new elections. On that occasion,
Lega Nord stood for election alone and lost more than half the seats it had obtained in
1994. Nevertheless, it succeeded in retaining 87 seats in parliament.
Finally, Lega Nord once again joined a coalition headed by Berlusconi, La Casa della
Libertà, in the 2001 elections. However, it failed to reverse the downward trend in its
election results, obtaining 30 seats in the chamber of deputies and 17 in the senate.
The national representation of the other regional parties mentioned above has,
however, remained substantially unchanged, even during the 1996 and 2001
elections67.
65
66
67
For instance, the Südtiroler Volkspartei obtained the following results: 1996 – 3 deputies
and 2 senators; 2001 – 3 deputies and 3 senators (the results for 2001 were the same as those
for 1992 and 1994).
80
Voter participation continued its downward trend. The lowest turn-out was in 2001,
when 81.3% of registered voters cast their ballot at the senate elections68. Turn-out
has thus fallen by more than 12% between the late 1940s and the time of writing.
During the same period, the number of blank votes rose. In the 2001 chamber of
deputies elections, 4.2% of the votes cast were blank, a figure that is two percentage
points higher than the average attained prior to the 1980s69.
Regional and local elections
In discussing voter behaviour in regional elections, it is necessary to distinguish

between ordinary statute regions and special statute regions. Between 197070 and the
late 1980s the political landscape of the 15 ordinary statute regions reflected the
national scenario. This is also true for turn-out and the percentage of blank votes
cast71. At the regional elections on 12 May 1985, Liga Veneta, described as "the
mother of all leagues" by Franco Rocchetta72, the president of Lega Nord, put
forward candidates in all ordinary statute regions and won two seats on the Veneto
regional council73. In the subsequent elections in 1990, Lega Lombarda followed suit
and put forward candidates in all 15 regions. Its success was noteworthy in the
Lombardy region, where it obtained 15 of the 80 seats on the regional council. In the
68
Ministry of the Interior – Senate elections – 2001, p. 37
69
Ministry of the Interior - Chamber of Deputies elections – 2001, p. 144
70
In 1970, the first regional elections were held in the 15 ordinary statute regions. In special
statute regions, regional elections date back to the immediate post-Second World War
period (Sicily 1947; Trentino-Alto Adige 1948; Aosta Valley 1949; Sardinia 1949; Friuli-
Venezia Giulia 1964).
71
Istat 1990, pp. 177-185. Voter turn-out: highest voter turn-out – 92.7% (1975), lowest voter
turn-out – 89.6% (1980), highest rate of blank votes cast – 3.5% (1980).
72
Diamanti I. (1993), p. 43
73
Ministry of the Interior, regional elections 1985
81
other regions, Lega Lombarda, like other regional parties, failed to shift the
traditional political balance of power74. An extremely similar political landscape was
revealed during the 1995 elections. As a political party with strong regional ties, Lega
Nord (Lega Lombarda, Lega Piemontese, Liga Veneta) remains the only regional
party to have gained political weight (in northern Italy, from 21 seats in 1990 to 29 in
1995)75. However, at the same elections, the central and southern Italian electorate
showed a preference for national parties76.
Elections in special statute regions
The following data have been gathered regarding the five special statute regions
(Valle d'Aosta, Friuli-Venezia Giulia, Trentino-Alto Adige/Südtirol, Sardinia and
Sicily).
Election results since 1949 reveal growing support for the local Union Valdôtaine
party. In 1954, it won its first seat on the regional council. In 1988, it held 12 of the
35 seats. In 2003, it obtained 47.25% of the votes cast, equivalent to 18 seats and,
therefore, an absolute majority on the regional council.
Until 1976, voting trends in Friuli-Venezia Giulia were similar to those in the rest of
Italy. During the following decade, Lista per Trieste, a party with ethno-local
leanings, succeeded in establishing itself, although it never gained more than four
seats on the council. However, in contrast with trends in Valle d'Aosta, during
regional elections in the 1990s the electorate swung back towards the national parties,
74
75
However, it is worth noting that in Lombardy from 1994 to 1995, Lega Lombarda dropped
from a 22.1% share of votes in the national elections to 17.5% in the regional elections. See
Levy C. (1996), pp. 189-190.
76
82
which had started to address topical ethno-local issues77. This trend was confirmed in
the June 2003 elections, when most of the parties standing for election were national
parties. None of the three regional parties that stood for election obtained more than
five seats78. Furthermore, turn-out was markedly below the national average, at
merely 64.27%79.
Similar trends regarding the political weight of local parties at regional elections have
been observed in Sardinia and, above all, in Sicily. Here too, the electorate have
traditionally favoured candidates from national parties. At the time of writing, local
parties hold only six of the 80 seats on the Sardinian regional council, while in the
Sicilian regional assembly, only 13 of the 90 members represent local political
parties80.
The provincial council of the Autonomous Province of Bolzano is made up of 35

members, who are also members of the Trentino-Alto Adige/Südtirol regional
council81 alongside provincial members from the Province of Trento. The Südtiroler
Volkspartei has traditionally held an absolute majority on Balzano provincial council
(Landtag) winning 22 of the 35 available seats in 1988, 19 in 1993 and 21 in 1998.
The elections of 26 October 2003 confirmed these figures. Despite falling from
56.6% to 55.6% of the vote, Südtiroler Volkspartei remains the dominant political
party with 21 seats; the second strongest party, Alleanza Nazionale, won only 8.4%
77
Diamanti I. (1993), 36-41; Istat 1990, pp. 195-197
78
http://elezioni.regione.fvg.it/Amministrative2003/candidature/sito/
Affluenza_Risultati/index.htm
79
http://elezioni.regione.fvg.it/Amministrative2003/candidature/sito/
Affluenza_Risultati/index.htm
80
http://consiglio.regione.sardegna.it/crorg/crorg07.htm;
http://www.ars.sicilia.it/deput/default.asp (date at time of access to information: 14.10.2003)
81
http://provinz.bz.it:aprov/alto-adige/consiglio.htm
83
of the vote, and the weakest, Lega Nord, only 0.5%. Luis Durnwalder (Südtiroler
Volkspartei) has been extremely successful in his own right as president of the
provincial giunta since 1989. He was re-elected by 110,108 voters, i.e. one third of
the province. Finally, it should be emphasised that the Südtiroler Volkspartei has
succeeded in maintaining an absolute majority in the autonomous province for 55
years82.
Trento provincial council presents a completely different picture. No single party, be

it national or local, has succeeded in having the same impact as the Südtiroler
Volkspartei. During its previous term of office, the council was, in fact, made up of
12 political grouping, none of which held more than eight of the 35 seats83. In further
contrast to the Province of Bolzano, there is a longstanding and tangible
predominance of national parties. The most successful party in the elections of 23
October 2003 was the Lista civica della Margherita, a centre-left coalition, which
obtained 25.88% of the vote and 11 seats. The second most successful grouping was
also a centre-left party, Sinistra Democratica e Riformista, which lagged behind by
12.25%, obtaining 13.63% of the vote and five seats. A similar result (13.42%) was
achieved by the present majority party at national level, Forza Italia, which has five
members on the council. Local political parties were far less successful than in
Bolzano. The four local parties elected to the provincial council were the Partito
Autonomo Trentino Tirolese (8.99%, 3 seats), Lega Nord Trentino (6.22%, 5 seats),
Leali al Trentino (2.62%, 1 seat), and Unione Autonomista Ladina (1.11%, 1 seat)84.
82
http://www.landtag-bz.org/it/consiglieri.htm; Corriere della Sera of 29 October 2003 p. 11
83
http://www.consiglio.provincia.tn.it/consiglio/consiglieri_provinciali/
composizione_attuale_consiglio.asp.
84
http://www.provincia..tn.it/elezioni:/nuovoconsiglio/eletti.htm; Corriere della Sera of
29 October 2003 p. 11
84
As regional instruments of direct democracy, the constitution provides for legislative

initiatives and referendums on regional legislation and administrative provisions.
Article 123(1) establishes the regional statute’s obligation to regulate these
instruments.
There would appear to be no restraints upon the regional statutory legislator’s powers
to decide which bodies should have the right of initiative, or the structure thereof.
In addition to the bodies identified in statutes currently in force, draft statutes

prepared by regions since the revision of Title V also vest the right of initiative in the
Council of Local Authorities (see Article 39 of the Calabria draft statute, which was
passed at a second reading on 31 July 2003).
With regard to referendums, the wording of revised Article 123(1), as amended by

the Title V reform, does not differ from the old text, specifying that the statute
regulates "the exercise ... of referendums on regional laws and administrative
provisions".
Article 123(3) also provides for possible statutory revision proceedings through
confirmative referendums: "a popular referendum on the statute will be called if,
within three months of its publication, one fiftieth of the regional electorate or one
fifth of the regional council members so request. The statute shall not be adopted
unless it is approved by a majority of valid votes".
The referendum is thus "optional", and plays a role alongside government control,
during the incorporative phase of the regional statute’s implementation. No quorum is
required for the statute’s adoption, which consequently facilitates its amendment.
85
Article 123(3) does not identify the body vested with the authority to initiate the
referendum process. It may therefore be inferred from Article 12385 that such
authority resides in the statute itself. However, the first revision of regional statutes
presents problems since the statute cannot regulate the procedures for its own
formation.
In practice, some regions have solved this problem by adopting ad hoc regional
laws86.
Article 132 of the constitution identifies referendums as the appropriate instruments

for decisions relating to the merging of existing regions, the creation of new regions,
or the transfer of a province or municipality, upon its own application, from one
region to another.
Under Article 132(1), a constitutional law may, subject to consultations with the
regional councils, authorise the merging of existing regions or the creation of new
regions with a minimum of 1 million inhabitants, upon application from a number of
municipal councils representing at least one third of the affected population, and
subject to approval by a referendum majority of that population. Under Article 132(2)
it is possible, by means of a national law, for provinces or municipalities that so
desire to leave one region and join another, subject to approval by the majority of the
85
Such inference is made from Article 123(1), which stipulates that "the statute regulates the
exercise of the right of initiative and referendum on regional laws and administrative
provisions", and from Article 123(2), where the statute is described as law of the region.
86
Emilia Romagna law 29/00, Calabria region law 35/01, Marche region law 28/02, Tuscany
region law 6/03. For legal authorities on the subject see Zanon N. (2000), p. 985 et seq.;
Tosi R (2000); Drago F., (2003b).
86
inhabitants of the affected province(s) or municipality or municipalities as expressed
in a referendum, and following consultation with the regional councils87.
Furthermore, referendums may also be held upon application by a sufficient number

of citizens.
Finally, with regard to instruments of direct democracy, legal debate is ongoing as to

whether regional statutes may institute the right of recall (a decision by the electorate
to revoke the authority of a body or individual that holds public office).
Italians traditionally feel a strong identification with their local community, and in
northern and central Italy this local feeling has always hindered the establishment of a
wider regionalism88. Voters' sense of allegiance to their town or district presented
substantial problems even for the political leagues that emerged in the regions during
the 1980s89. In southern Italy, and notably in Sicily, regional ethno-linguistic and
autonomist movements are not widespread, and the political classes have traditionally
taken a centralist stance90.
However, the importance of language as a key aspect of autonomous movements is

well documented in Sardinia and Alto Adige (South Tyrol). In Sardinia, where there
is widespread awareness of an "island identity", autonomist movements are, as has
been seen, fairly limited. Local politicians, with a view to protecting the island’s
87
On this subject, see constitutional case 343/03.
88
Levy C. (1966), p. 4-5, 15-16; For an in-depth analysis see Lyttelton A. (1996), p. 33-51,
Hine D. (1996), p. 112-127.
89
Levy C. (1966), p. 15
90
Levy C. (1966), p. 7; Davis J.A. (1966), p. 53
87
interests, have always maintained strong ties with central government91. The same
tendency is apparent in Friuli-Venezia Giulia, and particularly in Trieste. In recent
years, this has also been the case in Valle d'Aosta, due to the decline in Alpine
agriculture92.
The establishment of special statute regions and ordinary statute regions, in 1970, and
the emergence of political leagues, ten years later, have not changed people's sense of
local allegiance. Precisely because of this, it has been suggested that the devolution
process should grant further powers to local authorities93.
In the historiography of the 1990s, there was discernible concern about a growing
loss of Italian national identity, which was attributed to the rise of the regional
leagues and a more pronounced Europeanism. A very recent study on this subject by
Renato Mannheimer suggests that the situation has now changed. Mannheimer’s
research has revealed that the number of Italians who considered themselves to be
"first and foremost Italian" (as opposed to European, or citizens of their city or
region) has risen significantly since 200094. Of one hundred people interviewed, only
eight stated that they considered themselves to be citizens of the region they lived in,
whereas 52 felt that they were, quite specifically, Italian95.
91
Levy C. (1996) p. 10-12, 16; Clark M (1996) p 100-101; Hine D. (1996), p.112
92
Levy C. (1996) p. 16
93
Levy C. (1996) p. 17
94
Mannheimer R. (2003), p. 47
95
Mannheimer R (2003), p. 49
88
The provisions of the constitution outlining the pattern of state intervention in the
economy are mainly laid down in Articles 41, 43 and 44. These articles define the
relationship between private enterprise and property on the one hand and forms of
public ownership on the other, and are directed at developing an economy designed
to meet social objectives (Article 41), meet objectives of general interest (Article 43),
ensure rational land use and establish equitable social relations (Article 44). There are
several constitutional provisions for fulfiling these objectives: planning
(Article 41(3)); the expropriation of specific enterprises and categories of enterprises
linked to essential public services, energy sources or monopolies which are pre-
eminently in the public interest, and their transfer to state, public authorities, or
worker and consumer communities (Article 43); and agricultural reform (Article 44).
Until a few years ago, direct state economic intervention was common; nowadays,
the trend is for a gradual privatisation of public enterprises.
With regard to financial arrangements, the constitution establishes two fundamental

principles of taxation: everyone has to contribute towards public expenditure in
proportion to their taxpaying capacity, and tax matters must be regulated by law.
The former principle is enshrined in Article 53, which stipulates that "everyone has to
contribute to public expenditure in proportion to their taxpaying capacity. The tax
system is founded on the principle of progressive taxation".
89
The latter principle is enshrined in Article 23, which establishes the legal nature of
taxation96.
The reform of Title V of the constitution introduced new regulations on the financial
autonomy of regions and local authorities; these mainly stem from revised
Article 119.
Article 119, paragraph 1 stipulates that "municipalities, provinces, metropolitan cities

and regions have revenue and expenditure autonomy". This new constitutional
element implies that "they are self-financed, that is, they fund their own running,
intervention and administrative costs, generally via contributions from local
taxpayers; however, this is of course subject to the need to redistribute funds to help
less advantaged areas”97.
Article 119, paragraph 2 stipulates that "municipalities, provinces, metropolitan cities

and regions have independent financial resources. They set and levy taxes and collect
revenues of their own, in compliance with the constitution and according to the
principles of coordination of public finance and the fiscal system. They receive a
share of the proceeds of state taxes related to their territory". In identifying the legal
framework within which the financial autonomy of public authorities is established,
this provision mentions both the constitution and "the principles of coordination of
public finance and the fiscal system"98. The new Article 119 thus also makes a
96
Article 23 of the constitution stipulates that “No obligations of a personal or a financial
nature may be imposed on any person except by law.”
97
See Cerulli Irelli, V., (2001).
98
This provision recalls, in parts, the wording used in the old Article 119, paragraph 1, which
gave national laws the task of coordinating regional funding with that of the state, provinces
and municipalities. These national laws, however, were never enacted: in practice, the state
only issued laws which regulated money transfers to the regions on an annual basis. The
only coordination regulations are, perhaps, those relating to the internal stability pact.
90
reference to "coordination" and, particularly, to the principles of coordination by
which regions and other authorities "set and levy taxes and collect revenues of their
own". It is to be noted that, although regions were allocated that their "own taxes"
under the original Article 119, constitutional law 3/01 clearly establishes a definite
increase in the regions’ tax-raising autonomy by extending this to "own taxes and
revenues"99. Moreover, the new Article 119 seems to have extended pre-existing
regional powers by specifying that regions and other authorities "set and levy taxes
and collect revenues". The new Article 119, paragraph 2 stipulates that regions and
other subnational authorities "receive a share of the proceeds of state taxes related to
their territory"100. The most important innovation is the use of the wording "related to
their territory": it highlights the fact that the regions’ and local authorities’ shares in
state taxes are now commensurate with the revenue from state taxes in the area
concerned. In other words, the provision introduces what some legal authorities have
defined as the principle of "territoriality of taxation", i.e. the principle by which the
revenue drawn from a given area, though collected by the state, must be returned to
the same area. Following the amendments to Article 119, "the share of the proceeds
of state taxes" should therefore be the sum produced in the area of the authority
benefiting from the share system.
Revised Article 119, paragraph 3 also stipulates that national law establishes an
equalisation fund to benefit areas where the fiscal capacity per inhabitant is lower,
with no restrictions as to the allocation of the proceeds. This is the third and final
provision under Article 119 on the funding of regions and local authorities.
99
See also Pinelli, C., (2001), p. 122.
100
The old Article 119 allocated “shares of state taxes” to regions.
91
Therefore, regional and local funding is essentially made up of the following: 1) own
revenues; 2) shares from proceeds of state taxes; 3) financial contributions to an
equalisation fund.
With regard to the equalisation fund - introduced ex novo “with no restrictions as to

the allocation of proceeds” – the rule laid down in the third paragraph of Article 119
raises a problem of interpretation: it is unclear whether "lower" fiscal capacity means
"lower" than that of the richest region, or lower than the regional average.
Article 119, paragraph 4 stipulates that "the funds deriving from the sources
mentioned in the previous paragraphs shall enable municipalities, provinces,
metropolitan cities and regions to fully finance the public functions attributed to
them".
This provision thus provides a general yardstick for assessing the adequacy of the
resources allocated to the regions, as the resources mentioned in the first three
paragraphs of Article 119 should together ensure that regional responsibilities can be
carried out appropriately.
Article 119, paragraph 5 stipulates that "in order to promote economic development,
social cohesion and solidarity, to remove economic and social inequalities, to foster
the effective exercise of human rights, or to pursue ends other than those pertaining to
the exercise of their ordinary functions, the state shall allocate additional resources
and carry out special actions to the benefit of certain municipalities, provinces,
metropolitan cities and regions". The old Article 119 assigned "special contributions"
to individual regions earmarked for "specific purposes, and particularly to improve
the Mezzogiorno": the new text thus considerably extends the areas in which the state
may allocate additional resources.
92
Privatisation has been included in the government’s programme since the 1990s: the
severe budget deficit, the need to reform public accounts to bring them in line with
the Maastricht criteria, and the establishment of the Autorità garante della
concorrenza e del mercato (Italian Competition Authority) under the national
antitrust law (Law 287/90) have greatly heavily influenced and accelerated the
conversion of public enterprises which were previously state-controlled101. The
privatisations of the 1990s began with the conversion of credit institutions into semi-
public companies in order to increase the efficiency of banks and open up the lending
sector to competition102. The conversion of public banks has produced two separate
bodies: a public limited company providing banking services and a "conferring
body", known as a banking foundation, which oversees its activities.
The formal privatisation of state-controlled enterprises was imposed by a 1992 law

which provided for the "compulsory" conversion of IRI (Istituto per la Ricostruzione
Industriale – Institute for Industrial Reconstruction), ENI (Ente Nazionale
Idrocarburi – National Petrochemical Authority), INA (Istituto Nazionale delle
assicurazioni – National Insurance Institute) and ENEL (Ente Nazionale per
l’energia elettrica – National Electricity Authority) into public limited companies103.
The main objective of these privatisations was to restore efficiency and
101
See Freni, E., (2003), p. 3951 et seq. In 1992, national public debt had reached a record LIT
1,634,000 billion, with a debt-to-GDP ratio of 108.8%; in the same year, INI and ENI, the
two main public holdings which employed approximately 515,000 workers at the time,
recorded a net loss of over LIT 5000 billion: for more information on this subject, see
Malgarini, M., (2000), p. 90.
102
See Law 218 of 30.7.1990, and d.lgs. 356 of 20.11.1990.
103
See Article 15, paragraph 1 of Law 359 of 8.8.1992, modifying Decree Law 333 of
11.7.1992.
93
competitiveness to former public enterprises by moving them to a competitive
market104.
The system governing the limited liability companies that have replaced former
public enterprises is unique: the company shares from the compulsory conversion of
IRI, ENI, INA and ENEL, together with those from BNL (Banca Nazionale del
Lavoro) are allocated to the Treasury, which exercises shareholder rights – the so-
called "golden share" – according to directives issued by the prime minister in
agreement with the finance and industry ministers. These powers are exercised to
safeguard national economic and industrial policy objectives.
As well as the conversion of public enterprises, Law 352/92 (Article 18), following a
decision of CIPE (the Interministerial Committee for Economic Planning), provided
for the conversion of other public-sector undertakings, irrespective of their sector of
activity. Consequently, Italy’s state railway undertaking - Ente Ferrovie dello Stato -
was converted in 1992; in 1993 a set of criteria were established to convert state
monopolies into limited companies and to reorganise the telecommunications sector.
The postal services - Ente Poste Italiane - were privatised in 1997.
Privatisation of public utilities did not materialise until the second half of the 1990s.
Operators running these services use an infrastructure network which, for technical
and economic reasons, has to be managed as a monopoly. For this reason,
privatisation involved growing numbers of private fixed-line and mobile telephony
companies that began operating alongside Telecom, which manages and controls the
telecommunications network. In the electricity sector, ENEL held its monopoly of
electricity generation until the end of 2003: in future, it may continue being the main
producer, with a market share of up to 50%, and will retain ownership of the network,
104
See Bonelli and Roli., M. (2000), p. 98 et seq.
94
which will be managed by an "independent" operator105. The privatisation of public
utilities was subject to the creation of independent regulatory authorities responsible
for tariff regulation and monitoring service quality. Law 481 of 1995 thus established
an electricity and gas authority and a telecommunications authority. Detailed
legislation for the telecommunications sector was set out in Law 249 of 1997
establishing the regulatory activities of the telecommunications authority, whose
remit includes the conversion of the radio and television market.
As for the rail and postal services, the Ente Ferrovie dello Stato-Fs became a limited
company in 1992 and the Ente Poste Italiane was privatised in 1997. However,
inefficiency and chronic overstaffing have hampered any significant liberalisation of
these services.
Privatisation was also extended to sectoral social security institutions: Legislative

Decree 509/94 authorised the conversion of sixteen such institutions into private
undertakings. Since these associations and foundations continue to perform a public
welfare function, they are granted a derogation from the Italian Civil Code. In the
cultural and performing arts sector too, the main lyric theatres were converted into
privately run foundations106, as were the Centre for Experimental Cinema
(Legislative Decree 426/97), the Venice Biennale (Legislative Decree 19/98), the
National Institute of Classical Drama (Legislative Decree 20/98), the independent
Milano Triennale (Legislative Decree 273/99) and the Leonardo da Vinci National
Museum of Science and Technology (Legislative Decree 258/99).
The privatisation process in Italy has changed the role of the state from that of owner
to regulator. In practice, however, the regulations governing privatised companies are
105
Various authors, (2000c), p. 26.
106
See Legislative Decree 367/1996 which defined the conditions and procedures for the
conversion of bodies operating in the music sector.
95
still, to a large extent, public-law related. Therefore, the special powers, share
ownership restrictions and regulatory provisions that characterise the public sector
still pervade the liberalised sectors107.
Revised Article 119 of the constitution, which defines the new regional and local
financial framework reviewed above under 3.1, has not been implemented yet. In this
regard, Article 3 of the 2003 State Budget Act established a high-level committee108
to help the government – on the basis of an agreement on the structural mechanisms
of "fiscal federalism", to be reached by the Joint State-Regions-Local Authorities
Conference – to identify general principles for the coordination of public finance and
the tax system, under Articles 117(3), 118 and 119 of the constitution109.
3.3.1 Current regional funding rules: changes established by Legislative

Decree 56/2000
Until the new Article 119 is implemented, regional funding will continue to be
regulated by the state law that was in place when the reform of Title V entered into
107
See Freni, E., (2003), p. 3997.
108
Under Article 3 of Law 289/2002, the high-level committee's composition and regulatory
framework are established by DPCM, on a proposal from the Economic and Finance
Minister in consultation with the Ministers for Regional Affairs, the Interior, and
Institutional Reform and Devolution. The high-level committee also includes representatives
of regions and local authorities, nominated by the Joint Conference.
109
On 18 June 2003, the Conference of Regional Presidents drew up a paper concerning the
agreement on the structural mechanisms of fiscal federalism. See also the Ravello document
on the fiscal federalism of regions and autonomous provinces, 31 March – 1 April 2003.
Both documents are available on www.regioni.it.
96
force. In 1999, a radical and systematic reform of regional funding was introduced by
Law 133. This established Legislative Decree 56/00 which superseded the previous
regional funding legislation and provided for:
1. the abolition of state transfers to "ordinary" regions, with the exception of those
made in the national interest or in response to natural disasters;
2. the allocation of a share of VAT revenue to regions, being not less than 20% of the
total yield of the penultimate year preceding the one under consideration. The
amounts to be allocated to individual regions are based upon predetermined criteria,
such as population size, fiscal capacity, health-service needs and geographical
dimensions;
3. the setting-up of a national equalisation fund, funded by VAT revenue and, should
this be insufficient, by a share of petrol excise duties;
4. the setting-up of an interregional solidarity fund - reviewed every three years - to

help poorer regions;
5. fixing each region's VAT revenue share, the poorer regions’ share of the
interregional solidarity fund, and each region's share of the national equalisation fund
by 30 September of each year. The figures are established by DPCM, in agreement
with the State-Regions Conference;
6. an increase in the petrol excise duty due to "ordinary" regions with effect from
2001. This will be increased from 242 to 250 Italian lire for every litre of petrol sold;
97
7. an increase in the regional surtax rates on income tax, with effect from 2000. These
rates, currently fixed at 0.5% and 1%, will be increased to 0.9% and 1.4%
respectively;
8. a change in the criteria for allocating IRAP110 funds (Legislative Decree 446/97) to
regions;
9. the setting-up, within the Treasury, of a special guarantee fund financed by state
transfers to compensate regions when IRAP and income-tax surtax revenues fall short
of regional DPEF forecasts;
10. suppression of the municipalities' and provinces' share of IRAP revenue (Article
11). However, Legislative Decree 56 has provided for other treasury transfers to be
allocated to them111.
The following table (3.3.1) shows the revenue of "ordinary statute" regions for the
year 2000. Figures are in EUR million.
110
IRAP is a local business tax on the value-added by economic activity carried out in each
region and is non-deductible from income tax. Businesses, banks, management companies
and self-employed members of the professions are all subject to IRAP.
111
It is worth mentioning the arrangements for covering the regions' health costs, which take up
a large share of regional expenditure. As shown, Legislative Decree 56/2000 suppressed the
state transfers to "ordinary" regions. Nowadays health costs are largely financed through
IRAP. The decree also stipulated that the suppressed state transfers, including the health
fund, are to be compensated by the regional share of VAT, by the increase of regional surtax
rates on income tax, and by the increase in excise duty on petrol. Recently, Law 405/01
stipulated that a limit would be imposed on the growth rate of health expenditure, on a
yearly basis. Furthermore, in order to tackle regional healthcare sector deficits, with effect
from 2001, regions could lay down their own rules on shared funding, variations in the
income-tax rate or other fiscal contributions, and further measures designed to control health
costs.
98
Table 3.3.1
Region Own taxes Contributions Revenue from Total current
and transfers property and revenue
other assets,
services, etc.
Piedmont 5,718.97 827.22 111.76 6,657.95
Lombardy 11,798.38 1,918.96 89.00 13,806.34
Veneto 3,577.09 2,753.65 203.39 6,534.13
Liguria 1,760.60 2,144.51 684.88 4,589.98
Emilia- 4,039.26 2,124.01 223.30 6,386.56
Romagna
Tuscany 2,653.04 3,593.97 130.72 6,377.73
Umbria 575.61 806.83 72.04 1,454.48
Marche 1,196.20 1,259.14 19.74 2,475.08
Lazio 4,582.54 2,923.70 43.60 7,549.84
Abruzzo 587.92 1,058.19 116.00 1,762.11
Molise 383.50 201.34 3.47 588.31
Campania 2,049.97 6,444.23 382.07 8,876.27
Puglia 1,652.78 4,615.79 56.80 6,325.37
Basilicata 394.39 587.48 6.28 988.15
Calabria 739.05 2,624.00 92.15 3,455.20
Italy 41,709.30 33,883.02 2,235.20 77,827.52
Source: Compiled by Eurispes on the basis of data from the Court of Auditors
3.3.2 Current local funding rules
The first legislative step towards increasing the autonomy of local authority financing
came with Law 142/1990. This established a distinction between state transfers and
99
local authorities tax revenue: the former ensure the delivery of basic local services
and the latter funds those public services considered necessary for the community’s
development. Law 142 also stipulated that this funding must be allocated according
to objective criteria which take account of population, area and socio-economic
conditions; it must be distributed as evenly as possible, and local fiscal imbalances
should be taken into account. With a view to contributing towards local government
investment policy, Law 142 also established an ordinary fund for public works of key
economic and social importance and a special fund for public works in specific areas
or situations established by state law. Finally, Law 142 stipulated that the parameters
for calculating the total sum of money transfers and funds should be fixed by law for
each financial year of the state’s long-term budget.
Legislative Decrees 504/92 and 507/93 were subsequently passed in implementation

of the government delegation conferred under Law 421.
Legislative Decree 504/92 established ICI, a local tax on immovable property

designed to give municipalities a source of tax revenue. The decree also enabled them
to establish a surtax on income tax, and authorised provinces to levy an annual tax on
land conservation, and a vehicle registration tax.
The same legislative decree established arrangements for allocating state transfers,
stipulating that "from 1994, the state will subsidise provinces and municipalities
through an ordinary fund, a consolidated fund and an equalisation fund to address
local fiscal imbalances". These are additional to the ordinary and special investment
funds.
Legislative Decree 507/93 in turn created a municipal tax on public advertising and
billposting, a tax on the occupation of public areas, and a tax on the disposal of
domestic urban solid waste.
100
Since the 1990s, funding for local authorities has been marked by a strong drive
towards greater autonomy in tax matters. The IRAP local business tax is a case in
point, as it benefited municipalities and provinces alike: they each received a share of
regional revenue from IRAP, together with a top-up sum112.
Legislative Decree 446/97, which established IRAP, made an important contribution

to local and regional taxation. Subsequently, Legislative Decree 56/00 abolished
municipalities' and provinces' share of IRAP revenue, but guaranteed them other fund
transfers.
3.4 Public-private cooperation instruments. The intermediary role of

the unions
The so-called "negotiated planning" scheme based on the Territorial Pacts

programme was set up in the 1990s, once the special assistance programme for the
Mezzogiorno had come to an end. The scheme, benefiting southern Italy, groups
together the policies and instruments required to launch a strategy of development
based on growth and self-development by adopting a bottom-up approach. Several
factors prompted this new approach to developing the south. Firstly, the end of the
special assistance programme and of the cumbersome, centrally administered
measures in 1992 coincided with reports of the messy state of public accounts and the
need for budget reform to meet the Maastricht criteria. Moreover, on the institutional
and political fronts, the direct election of mayors (introduced in 1993) and the Lega
Nord’s criticism of the aid policies for the south undoubtedly contributed to the
spread of economic planning drawn up at local level. Against this new backdrop,
which was sustained by local employment and development incentives granted by the
112
Legislative Decree 446 of 15 December 1997, Articles 27 and 28.
101
European Community, starting with the 1994-1999 programme, cooperation became
the obvious choice for the new bottom-up local development policies. In 2000,
through the concerted action of institutions, companies and unions, an agreement was
reached on the so-called "territorial pacts" which provided the opportunity to try out
new formulas for flexible work to boost employment in southern Italy. Of the 61
pacts launched, 51 were implemented using national procedures and the remaining 10
in accordance with Community rules; 41 of them involved southern regions, covering
42% of southern inhabitants. Each pact benefits at least 20 municipalities and is
fleshed out by approximately forty new private schemes and creates, on average, 530
jobs113. A 2001 enabling act on labour market issues, passed under delegated
legislation, does not explicitly establish negotiated planning: as far as employment
incentives are concerned, the aim is rather to rationalise financial incentives, which
are to be reformed in proportion to the level of employment disadvantage recorded in
different areas of the country. The White Paper on Italy’s labour market, submitted
by the government in 2001, acknowledged the central role which the concerted action
of the early 1990s had played in promoting the reform of state finances and exploring
new methods of combating unemployment in the south. Nevertheless, it
recommended a shift towards a new form of "social dialogue", in which the unions
and other social partners would hold talks with the institutions (at both national and
regional level) before final approval was given to a governmental or regional
legislative proposal on employment or social matters114.
The White Paper’s approach has been criticised by those fearing that more
decentralised, sectoral bargaining could weaken the role of the unions and their
capacity as intermediaries115.
113
The statistics are quoted in Sales, I., (2003), 185.
114
See Ministry of Labour and Social Policy, White Paper on Italy’s Labour Market, Rome,
October 2001, Part II, 1.2.
115
See Fontana, G., in various authors, (2003b), 129 et seq., p. 134.
102
Following the political agreement reached by the Heads of State or Government at

the Berlin European Council of 24 and 25 March 1999 on Agenda 2000 - described
by the European Commission in 1997 as an action programme and benchmark
standard for EU policies for the period 2000-2006 - the EU Member States have
undertaken to strengthen the Structural Funds instruments. This has been done by
revamping the Objectives (reduced from seven to three) and resources available to
states and regions. Furthermore, Regulation (EC) 1260/1999 laid down a set of
criteria with a view to developing more dynamic ways of administering Structural
Funds. The criteria include greater geographical and financial concentration, more
decentralised management, tighter controls and greater effectiveness. Italy’s serious
socio-economic imbalances and the structural crises affecting certain parts of the
country justify the allocation of Structural Funds. In the face of such a situation, Italy
and the European Commission approved two Community Support Frameworks
(CSFs) for the period 2000-2006: one covers Objective 1 and the other Objective 3.
The Objective 1 CSF (helping areas lagging behind in development and whose per
capita GDP is less than 75% of the Community average), approved by Commission
Decision 2050 of 1 July 2000, is managed by the Economic and Finance Ministry and
takes action to help Mezzogiorno regions116 catch up with EU standards. The six
broad areas covered are: natural resources, cultural resources, human resources, local
development action plans, cities, service networks and forums. The Objective 3 CSF
(which aims to adapt and update education, training and employment policies and
systems, thus bringing together the previous Objectives 3 and 4), approved by
116
These are Basilicata, Calabria, Campania, Puglia, Sardinia, Sicily and, for a transitional
period, Molise, where aid is being phased out since it has passed the 75% threshold of the
Community average.
103
Commission Decision 1120 of 18 July 2000, is managed by the Ministry of Labour
and Social Policy and covers northern and central Italy117. The Objective 3 measures
have six priorities118. Objective 1 priorities were outlined in seven National Operating
Programmes (NOPs) and six Regional Operating Programmes (ROPs). To these
should be added the transitional support programme covering Molise. Objective 3 is
covered by one NOP and 14 ROPs. The latter were adopted with the participation of
the regions concerned. As regards Objective 2 - which brings together the 1994-1999
Objectives 2 and 5b and aims to support the economic and social reconversion of
areas facing structural difficulties - on 21 June 2000 the Italian authorities presented
the Commission with a list of NUTS III areas in northern and central Italy eligible for
Structural Funds assistance119. Areas eligible under Objective 2 were established by
Commission Decision 530 of 27 July 2000, later modified by Decision 1073 of
117
The regions covered by this Objective are: Valle d’Aosta, Piedmont, Liguria, Lombardy,
Veneto, Friuli-Venezia Giulia, Emilia-Romagna, Tuscany, Umbria, Marche, Lazio, Abruzzo
and the autonomous provinces of Trento and Bolzano.
118
The priorities are:
a) developing and promoting active employment policies;
b) labour market integration of people at particular risk of social exclusion;
c) promoting and improving vocational training, education and guidance, with a view to a
lifelong learning policy;
d) promoting a competent, skilled and flexible labour force, supporting businesses,
developing the human potential for research and technological advancement;
e) promoting equal opportunities for women;
f) following up CSFs and operating programmes (OPs).
119
The acronym NUTS stands for Nomenclature of territorial units for statistics, established by
Eurostat and used in issues relating to Structural Funds since 1998. Italian regions are
classified as NUTS II whereas provinces and smaller areas (municipalities, etc.) are
classified as NUTS III.
104
27 April 2001. These decisions were later integrated into 14 Single Programming
Documents, one for each region and autonomous province concerned120.
As regards funding for Italy, the European Union earmarked a sum of EUR 29,656
million. This will be allocated via the European Structural Funds, comprising the
European Regional Development Fund (ERDF), the European Social Fund (ESF), the
European Agricultural Guidance and Guarantee Fund – Guidance Section (EAGGF –
Guidance) and the Financial Instrument for Fisheries Guidance (FIFG) in accordance
with the EU’s three priority Objectives. It should be noted that the ESF contributes to
both CSFs, and fully finances the Objective 3 CSF121. Objective 1 regions have been
allocated a total of EUR 22,122 million (1999 values) for the period 2000-2006,
subdivided into EUR 21,935 million for the six Mezzogiorno regions and EUR 187
million for Molise, in accordance with the transitional funding system. As regards
Objective 2, the European Commission designated, for each Member State affected,
an upper limit of inhabitants for the four area types that were identified: industrial,
rural, urban and fishing-dependent areas. In the case of Italy, this limit is 7,402
million inhabitants, i.e. 13% of the total population, and the allocation is EUR 2,522
million. The regions receiving the highest funding are Veneto (22.9% of the total),
Piedmont (15%) and Tuscany (14.5%). Objective 3 funding is not area-based,
although Objective 1 regions are excluded. Italy has been allocated EUR 3,744
million of Objective 3 funding122 for the period 2000-2006.
120
The regions concerned are: Abruzzo, Emilia-Romagna, Friuli-Venezia Giulia, Lazio,
Liguria, Lombardy, Marche, Piedmont, Tuscany, Umbria, Valle d’Aosta, Veneto and the
autonomous provinces of Bolzano and Trento.
121
For further information on the ESF’s funding programmes and aims, see
www.welfare.gov.it/EuropaLavoro/programmazioneFse/FondiStrutturali/default.htm
122
The data are available online at www.tesoro.it/Documentazione/AreeDoc/rgs/ .
105
With regard to financial implementation, Italy experienced a number of problems
with using the Structural Funds in the past. There were several reasons for this,
including a lack of coordination between the various national and regional
administrative departments, flawed planning, and complex and lengthy administrative
procedures, especially for private bodies seeking access to the funds. Today,
however, these problems seem mainly to have been overcome. The data on the
implementation of Objective 1 Community measures show that at 30 June 2003,
expenditure stood at over EUR 7,221 million of the EUR 19,304 million committed
by that date. The Basilicata ROP in particular has shown the best potential to deliver:
payments have totalled some 23.1% of the overall allocations for the period 2000-
2006. Objective 2 expenditure stands at around EUR 519 million, with commitments
of over EUR 1,607 million. The overall implementation rate is 6.2% and commitment
capacity is approximately 19.2%. However, the low level of financial implementation
of the Single Programming Documents (SPD) is due to the fact that development
measures, and, as a consequence, grant allocations, only began to be implemented
recently. The Valle d’Aosta SPD showed a commitment capacity of 80.8%, with an
efficiency ratio of 26.5%. As at November 2003, 30% of the total Objective 3
allocation for the period 2000-2006 was already spent123. In the case of Italy, overall
results are positive and it seems that the problem of automatic decommitment of
allocated EU funds has been resolved.
123
Further details are available on
www.tesoro.it/Documentazione/AreeDoc/Dipartimenti/IGRUE/ .
106
IV. LOCAL AND REGIONAL AUTHORITIES AND MANAGEMENT
OF PUBLIC SERVICES
4.1 Management of public services. The regional and local dimension

of public services
The term "local public services" refers to all activities undertaken by local authorities
which are neither strictly administrative nor merely of an economic nature: such
services address a basic need of the local community124. The distribution of
competences between regions and local authorities over local public services is
governed by sector-specific legislation.
The local authorities’ competences regarding the supply and distribution of water are
stipulated in the law on the water service (Law 36/94). Responsibility for organising
and running the service lies with municipalities and provinces, while the region
regulates cooperation arrangements between local authorities for the management of
the service. As regards the form of management, joint enterprises or private
companies are preferred.
As regards natural gas distribution, the arrangements for gas supply are regulated by
each local authority, which awards appropriate contracts using a model prepared by
the electricity and gas authority and approved by the Industry Ministry (Article 14 of
Legislative Decree 164/00). Local authorities regulate distribution arrangements by
means of guidelines and licences, concluding service contracts with the public and
private bodies concerned.
124
Dugato, M., (2003), p. 2584.
107
As regards electricity, local authorities are responsible for monitoring energy saving
and rational energy use as well as other duties laid down in regional legislation.
Within the regional programming framework, provinces are responsible for
promoting renewable energy sources and energy saving, authorising the installation
and operation of power plants and monitoring the performance of thermal
appliances125.
As far as local public transport is concerned, Legislative Decree 422/97 confers the
management of local railway, maritime and air services on regions and local
authorities. Regions are responsible for planning and funding; moreover, in
agreement with local authorities, they also decide on the minimum essential services
needed to meet people’s mobility demands. Relations between the local authority and
the body managing the service are governed by the public service contract that also
sets down minimum quality standards for the service provided.
As for waste collection, transport and disposal, Legislative Decree 22/97 gives
regions the task of drawing up criteria for the siting of landfills and recycling plants.
Provinces are responsible for coordinating municipal waste management through a
province-wide scheme. Municipalities are responsible for the management of
municipal and similar waste: a municipal regulation establishes the various stages of
waste management including its transport, collection and selective collection.
Alongside these industrial-type services, local authorities provide personal and

domestic services as well as cultural and educational amenities (libraries, museums,
etc.).
125
Legislative Decree 112/98, Article 31.
108
After the reform of Title V of Part II of the constitution, a number of the state’s
exclusive legislative powers – such as the safeguarding of competition and the setting
of basic standards for civil and social rights – encroach on or curtail the regional
responsibilities laid down in sectoral legislation. In fact, it is wrong to speak of a
general regional legislative "residual" power over public services by virtue of the
convention whereby matters not listed in Article 117 come under the exclusive
legislative authority of the regions: public services are not stand-alone issues, as they
tie in with a number of matters that are governed by concurrent state and regional
legislation. Article 117(3) lists the following matters of concurrent legislation: spatial
planning, civil ports and airports, large-scale transport and navigation networks and
the production, transportation and national distribution of energy. It does not however
explicitly mention the following: local transport; the extraction, processing and
transportation of energy and its regional or local distribution; collection and treatment
of municipal solid waste. All these matters could be included within the "residual"
authority of regional authorities126. Despite such interpretations, the state has
continued to legislate in this area since the reform of Title V. Indeed, in its 2002
Budget (Article 35 of Law 448/01) it amended the legislation on management of local
public services, and in September 2003 a decree-law was adopted that further
reformed the management procedures of these services (see paragraph below).
Arrangements for the management of local public services were first codified by Law
142/90, under which public services of an entrepreneurial nature could be managed
by local authorities in various ways: directly, in the case of small services; through a
special agency (a public body attached to the municipality though with legal
126
According to the interpretation of Cecere, A.M., (2003), p. 323 et seq.
109
personality); by a consortium (joint management between various authorities); or by
limited liability companies with a local majority public shareholding (Article 22).
The difficulty of creating companies which are totally dependent on municipal capital
necessitated the introduction of other management arrangements. In 1992, it became
possible to set up companies with a minority public shareholding. In these
companies, the majority shareholder is a single private partner, chosen by the local
authority following a public tendering procedure.
The gradual transition to private management was stepped up by Law 127/97 which
permitted management by a limited liability company. The consolidating statute on
local authorities (T.u.e.l.), adopted by Legislative Decree 267/00, incorporated the
model contained in Article 22 of Law 142/90, as subsequently consolidated and
amended.
Legislation affecting local public services was completely revised ten years after
Law 142/90. Article 35 of Law 448/01127 redefined the management arrangements of
local services (Articles 112-118 of T.u.e.l.), distinguishing between "industrial"
services (electricity, thermal energy, natural gas, the waste cycle, water resources and
public transport) and other services (social, personal and domestic, educational and
cultural). The reform of industrial services is based on the distinction between
infrastructure and network ownership, service management and supply: whereas the
network is still managed by a publicly owned company, services are tendered out to
private companies. The aim of the 2001 legislation was to retain local authorities'
control of the networks and infrastructure and introduce a privatised scheme for the
practical running of the services. In September 2003, the government enacted a
decree-law that further reformed local industrial public services, defining them as
127
See Purcaro, A. Gravallese I., (2003), p. 243 et seq.
110
services "of economic significance" and obliging municipalities – as network and
infrastructure owners – to entrust their management to ad hoc authorities or to public
companies. The latter may be entrusted with direct management and control of the
network128.
Local non-industrial public services, defined as services "that are not of economic
significance", are placed under direct management of a) institutions; b) special
agencies and consortiums; or c) public companies. Services may also be managed
directly by the local authority if their scale is too small to justify assigning them to
other bodies. With regard to cultural and leisure amenities, local authorities may
entrust these to associations and foundations which they have set up themselves, or in
which they have a share129.
Doubts have been expressed about the wisdom of the radical reform of the local
public services system that followed the reform of Title V. Commentators question
whether the reforms are justified by the state's competence to protect competition and
ensure basic standards of delivery relating to fundamental rights, and whether the
constraints are too rigid. The indiscriminate obligation to use the model of the share-
capital company, without taking account of the widely differing nature of Italy's
municipalities, is particularly open to question, as it prevents the smaller
municipalities from running services of industrial or economic significance
themselves.
128
On the 2003 reform see Corali, E., (2003).
129
See Articles 113 and 113b of T.u.e.l. as modified by decree-law 269 of 30 September 2003
and converted into Law 326 of 2003.
111

and results)
Italy has taken a number of steps to computerise its public administration and
introduce eGovernment/e-democracy.
The eGovernment Action Plan130, approved by the Council of Ministers on 23 June

2000, identified a series of measures about the use of modern technology by the
public authorities in information and telecommunications management. These aimed
to improve the operational efficiency of the institutions, to computerise services and
to give electronic access to users.
Consequently, a document adopted by the Joint Conference on 18 January 2001

called for territorial action plans for regional eGovernment, to be drawn up in
participation with local authorities and aiming to:
1) identify specific local objectives, in accordance with the thematic areas set out in
the National Plan and the European Commission’s eEurope Plan;
2) establish criteria for coordinating eGovernment measures across all levels of local
government131.
130
The Action Plan is in line with recommendations set out in the eEurope Plan 2002, approved
by the Feira European Council in June 2000 (see Capocchi A., 2003, 130). In 2002 another
eGovernment plan was approved, eEurope 2005 (European Council, Seville 2002).
131
http://www.innovazione.gov.it/ita/egovernment/entilocali/piani_territoriali.shtml
112
Besides developing eGovernment projects for regions and local authorities with a
view to enhancing infrastructure services and other services aimed at members of the
public and businesses132, the initial implementation phase of eGovernment was
founded on two other lines of action. Firstly, a set of technical, organisational and
methodological criteria to help deliver eGovernment projects was established, and a
policy paper entitled eGovernment towards an efficient federalism: a shared vision, a
collective achievement133 was drawn up. Secondly, Regional Competence Centres
(CRC)134 were set up in most regions.
The second stage of eGovernment was launched135 on 27 November 2003, at the

State-Regions Conference136. The main objective at this stage was to mainstream
innovation schemes which had already been set in motion for services to members of
132
http://www.crcitalia.it/UserFiles/1333.pdf Document adopted by the Joint Conference on
27 November 2003 on eGovernment in regions and local authorities: The implementation
stage. Objectives, actions and procedures for implementation.
133
Document drawn up by the Technical Committee of the Permanent Commission for
Innovation and Technology. The Commission was set up by the regional presidents and the
Ministry for Innovation and Technology. See also
http://www.innovazione.gov.it/ita/intervento/normativa/allegati/visione_condivisa_030408.p
df and http://www.crcitalia.it/UserFiles/1333.pdf. Document adopted by the Joint
Conference on 27 November 2003 on eGovernment in regions and local authorities: The
implementation stage. Objectives, actions and procedures for implementation, p. 2-3.
134
http://www.crcitalia.it/ The resources to set up the CRC were provided by the Ministry for
Innovation and Technology and by personnel from regional and local public administrations.
135
http://www.crcitalia.it/riservato/elenco_sezione.aspx?Categoria=749
136
http://www.crcitalia.it/UserFiles/1333.pdf Document adopted on 27 November 2003 by the
Joint State-Regions-Cities-Local Authorities Conference on eGovernment in regions and
local authorities: The implementation stage. Objectives, actions and procedures for
implementation, p. 2.
113
the public and businesses, and for infrastructure services across all regions. To this
end, five lines of action were established137:
1) to develop local infrastructure services (via the network for public administration
agencies). This involves those services, provided by a regional or provincial
administration for local authorities in its area, which are essential for the success of
eGovernment service projects (e.g. administration of card systems at regional level);
2) country-wide distribution of services for members of the public and businesses;
3) to include small municipalities in eGovernment plans. Presently 72.04% of Italian

municipalities have fewer than 5,000 inhabitants, while small/medium-sized
municipalities (up to 20,000 inhabitants) make up a further 22.12%. Thus, regional
service centres (CST) were set up with a view to enhancing cooperation and
partnership between the two types of municipalities. These centres will be
responsible for setting up eGovernment services, guaranteeing they are run properly
and supplying the necessary human and technological resources138;
4) to launch projects to develop digital citizenship (e-democracy). This action aims to

promote the use of ICT technology projects to encourage citizens to participate in
public decision-making;
137
Joint State-Regions-Cities-Local Authorities Conference on eGovernment in regions and
local authorities: The implementation stage. Objectives, actions and procedures for
implementation, p. 4.
138
http://www.crcitalia.it/User Files/1333.pdf Document adopted on 27 November 2003 by the
Joint Conference on eGovernment in regions and local authorities: The implementation
stage. Objectives, actions and procedures for implementation, p. 4, 10-12.
114
5) to promote the use of new services by members of the public and businesses, on
the grounds that once online services have been set up, steps must be taken to ensure
that they are used139.
The budget for this second stage is approximately EUR 185 million140.
With regard to the computerisation of public administration, the Committee of

Ministers for the Information Society141, made up of ministers from 11 different
ministries, plays an important role in coordinating the activities of central, regional
and local administrations. At the meeting held on 13 February 2002, the committee
established three areas of action: a) to increase use of the internet by making public
services available online, developing multimedia content and supporting e-
commerce; b) to promote the benefits of internet access, its speed and cost
effectiveness; and c) to develop new competences and combat any type of
"exclusion".
The goals for the present legislature are as follows: development of online services
for members of the public and businesses alike (priority services such as those related
to taxation, health, study, work, etc.); efficiency; improving human resources, with
the emphasis on ensuring computer literacy among all public employees;
transparency (2/3 of public administration offices are to offer the public online access
to documents); and quality (all offices providing services are to adopt a customer-
139
Joint Conference on eGovernment in regions and local authorities: The implementation
stage. Objectives, actions and procedures for implementation, p. 4, 15.
140
Document adopted on 27 November 2003 by the Joint Conference on eGovernment in
regions and local authorities: The implementation stage. Objectives, actions and procedures
for implementation, p. 16.
141
http://www.innovazione.gov.it/ita/intervento/riunioni_comitato.shtml
115
satisfaction scheme). Telework in public administrations is also being developed,
with a view to making Italy more competitive142.
Furthermore, on 21 March 2002 the Permanent Commission for Innovation and

Technology143 was established in order to encourage regional governments to
implement effective policies and coherent strategies on information society and
eGovernment issues. In April 2003, the commission’s Technical Committee
published a paper entitled eGovernment towards an efficient federalism: a shared
vision, a collective achievement - Reference notes for the development of
eGovernment in central administrations, regions and local authorities. It sets the
objective of "forging a common vision for developing eGovernment and setting a
benchmark standard for future coàperation between municipalities, provinces, regions
and central administrations”144. The paper lists eight areas of action on which the
various tiers of government should adopt a common position145:
1) interconnecting all public administrations, and connecting them with the public
and with businesses;
2) resourcing online services;
3) rationalising arrangements for the supply of online services;
142
http://www.innovazione.gov.it/ita/intervento/allegati/docu_base130202.pdf (Committee of
Ministers for the Information Society, meeting of 13 February 2003)
143
http://www.innovazione.gov.it/ita/news/2003/03_04_10.shtml The Memorandum of
Understanding was signed by minister Lucio Stanca and Mr Enzo Ghigo, President of the
Conference of Regional Presidents.
144
http://www.innovazione.gov.it/ita/intervento/normativa/allegati/visione_condivisa_030408
145
http://www.innovazione.gov.it/ita/intervento/normativa/allegati/visione_condivisa_030408
116
4) making the arrangements necessary to guarantee online security;
5) putting systems in motion to ensure the interoperability of services across the

country;
6) using decentralised/federated systems and "recycling" solutions;
7) designing organisational structures to implement eGovernment;
8) developing a system based on shared structures146.

a) To date, Italian law has not regulated electronic voting (e-voting).
The concept of electronic voting first emerged in Italy in the 1980s with the first
legislative initiatives to introduce elements of computerisation, or simply partial
automation, in the electoral process147. Concrete steps in this direction were only
taken at the end of the 1990s, with the launching of E-poll and True-vote.
146
Reports prepared between 1997 and 2002 by the Authority for Information Technology in
Public Administration (AIPA) give a detailed account of the development of eGovernment
at a national and subnational level. The 2002 report shows an increase in ICT expenditure by
central administrations, whereas many other administrations show a decrease; a marked
development in the availability of online services; and further growth of basic infrastructure
and connectivity. The report also notes that of the 80 basic services for citizens and
businesses selected by the Committee of Ministers for the Information Society, 37 were the
direct responsibility of central public administration. Of these, 15 are fully accessible online
and 11 only partially.
147
During the IXth Legislature, bills were tabled by Adolfo Battaglia (A.C. doc. 1895) and
Carlo Fusaro (A.C. doc. 1896).
117
E-Poll (Electronic polling system for remote voting operations) is a transnational
research and development project co-financed by the European Commission’s
Information Society Directorate-General as part of the IST research project
(Information Society Technologies) within the 5th Framework Programme. Italy is
one of the participants and has received Commission funding of EUR 1.7 million for
the project, which attempts to simplify and computerise voting procedures by using
cutting-edge technology that is nevertheless relatively easy to apply148.
In Italy, the first e-voting trial was conducted in San Benedetto del Tronto during the
regional elections of 16 April 2000. It involved 468 women (54% of eligible voters)
and 404 men (46% of eligible voters); 34% of those voting were over 60 years of age.
Further trials were conducted in Avellino in 2001, in Campobasso at the
administrative elections of May 2002, and in four Friuli municipalities (Trieste,
Gorizia, San Vito del Tagliamento and Cividale del Friuli) during the Regional
Council elections held on 8 and 9 June 2003149. An e-voting simulation was also
organised in Cremona on 17 November 2003, and real-time data were transmitted to
the Ministry of the Interior.
True-vote ("a secure and trustable internet voting system based on PKI") is a project
co-financed by the European Commission involving Italy, the United Kingdom,
France, the Netherlands and Finland. The project aims to put in place an internet-
148
The basic stages of e-voting are the following: preparing the vote, identifying and
authenticating the voter (guarantee of confidentiality required), authorising the vote,
transmitting it via a secure environment, counting votes and lastly, announcing the result.
For information on E-poll, see www.e-poll-project.net.
149
This was the largest e-voting trial attempted in Italy so far, with a pool of approximately
3,800 voters. Of the 3,791 eligible voters in Friuli, 1,641 (i.e. 43.29%) voted via a
touchscreen system, i.e. a system whereby a voter follows instructions by simply touching
the computer screen.
118
based system using digital signature and smart cards so that PC voting would be
possible in the future. The Italian project involves Postecom s.p.a. and the city of
Milan, whose university developed a secure e-voting system that was tested on the
city’s community network between 12 and 18 December 2002 with the participation
of approximately 300 internet users150.
b) The ever increasing use of internet in Italian homes was a decisive factor for the
development of institutional websites and local public networks (i.e. eGovernment in
its broadest sense). In fact, 49.67% of all Italian households own a PC; 63% of them
have an internet connection (even though only 36% use it frequently). The total
number of people who access the internet, even occasionally, is approximately
13 million, although the figure drops to less than 12 million if we exclude internet
access via an outside source such as during training courses, from friends’ homes,
libraries, etc.). Just over 8 million people say they use the internet at least once a
week. Internet use has grown steadily over the years, especially from 1998 onwards,
although the rate of growth slowed in 2001. Between 2002 and 2003, the number of
new connections entered a period of stasis, if not an outright downward trend.
However, the latest data suggest a new upturn in September-October 2003, although
the trend can only be assessed accurately over a longer period of time. Internet user
statistics for Europe reveal that Italy occupies third place, behind the United
Kingdom and Germany. Still, it must be said that, compared to more advanced
countries, Italy has a relatively low density of use. Eurisko data as at June 2003 show
that approximately 50% of those who use a computer regularly are also at home with
the internet, with a little over 70% of PCs connected up to it. 25 to 44-year-olds use
internet the most and represent 47% of all internet users, while older people are the
least likely to access it151.
150
For further information on True-vote, see www.True-vote.net.
151
The above data are published in the Censis and Eurisko reports covering September-October
2003 and are available on www.gandalf.it/dati/dati3.htm.
119
Central and local government have responded to this situation by launching the
above-mentioned cooperation scheme to restructure public administration according
to a shared vision of eGovernment development and implementation (see 5.1. above).
c) With regard to local radio and television, Italy has a national television station that
offers regional programmes (RAI 3) and a large number of regional, municipal and
local radio and TV stations.
Local private radio took off in the 1970s with the introduction of the first radio libere,
independent radio stations such as Radio Valle Camonica, Radio Bra Onda Rossa,
Radio Parma and Radio Milano International. Their development was further
encouraged by Constitutional Court ruling 202/76, which restricted the previous
public monopoly of national broadcasting. Private companies could thus run radio
and TV stations, provided they only broadcast locally. Over the years there was a
considerable development in local as well as national radio, to such an extent that in
1990 it became necessary to regulate the broadcasting system by means of a
frequency plan restricting the number of available frequencies in order to safeguard
the quality of reception. However, the radio frequency plan has not been approved
yet; in the meantime, radio stations that meet the requisite technical and
organisational conditions have been granted provisional licences152.
With regard to local television, the number of private television stations rose rapidly
in the 1970s, from 68 in 1976 to 600 in 1981. The public broadcasting company
(RAI) responded in 1979 by creating a third TV channel tailored for a regional
community. At present, the presence of two national broadcasters, RAI and Mediaset,
has a negative effect on the advertising capacity of local networks: nonetheless, there
152
Information taken from www.raiway.rai.it/storia.htm.
120
are some 550 of them153 broadcasting at regional, municipal and local level. The
situation prompted the Italian government to launch an aid policy in 1998 to ease the
shift from analogue to digital. The 2002 Budget Act154 earmarked EUR 20 million for
the project. Another law, not yet approved, aims to reorganise the TV and radio
system. The advertising rules that apply to national networks would be relaxed for
local TV stations, extending the time limit on advertising slots from 20% to 25% and
the daily limit on other kinds of advertising from 35% to 40%.
In 2002, under DPCM of 14 February 2002, the Council of Ministers published a

notice on the eGovernment Action Plan about the "selection of eGovernment projects
proposed by regions and local authorities"155. The aim was to select projects proposed
by regions and local authorities for services to the general public, businesses and
infrastructure services. The overall budget was EUR 120 million, of which EUR 80
million were earmarked for public and business services and EUR 40 million for
infrastructure services (Article 5). 138 projects156 of those submitted following the
first notice on eGovernment were selected for co-financing.
The People project157 (Progetto Enti Online Portali eGovernment) is particularly

interesting: it involves 57 authorities from 13 different regions158 with an overall
population of around 7.5 million. It aims to offer more than 200 services to the
153
For a list of Italian local TV stations, see www.satellitenews.net/navigando/tvlocali.html.
154
Law 448 of 21 December 2001
155
Italian Official Journal 78 of 3 April 2002
156
http://www.crcitalia.it/elenco_sezione.aspx?Categoria=251
157
See the Memorandum of Understanding, Florence, 19 April 2002; www.progettopeople.it.
158
http://www.progettopeople.it/progetto.php.
121
general public and to businesses, with full cooperation between the IT networks of
the public administrations involved. Services offered fall under six broad headings:
local tax services; issue of permits and licences; personal services (welfare, schools,
cultural and educational); registry services; IT system services; and services linking
other public portals.
The time which ordinary citizens and businesses could save by using online services
has been estimated at a staggering 3.5 million hours a year; in abstract terms, it is
anticipated that in Rome, 756 municipal jobs could go, although 605 employees will
be needed to actively run the People project159.
In some areas of northern and central Italy, local projects have been launched in
connection with the People project160, such as e-Firenze161 involving the Tuscany
region, the province of Florence and many other municipalities, People Anusca162
(registry services) and People Lecco163 (a trial use of an electronic health card).
159
Municipality of Rome, Decision No. 307 of 4 June 2002.
160
Municipality of Rome, Decision No. 307 of 4 June 2002.
161
http://www.e-firenze-gov.it/convenzione_e-firenze.htm.
162
http://www.progettopeople.it/partners.php.
163
http://www.leccoonline.org/ci.cfm.
122
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131
USEFUL LINKS
Centro nazionale per l’informatica nella http://www.cnipa.gov.it (in Italian)

pubblica amministrazione (National Centre
for Information and Communication
Technologies in Public Administration)
Centri regionali di competenza (CRC) http://www.crcitalia.it (in English
(Regional competence centres) and Italian)
Conferenza dei presidenti dell’assemblea, dei http://www.parlamentiregionali.it
consigli regionali e delle Province autonome (in Italian)
(Conference of the Presidents of the Assembly,
regional councils and autonomous provinces)
Ministero per l’innovazione e le tecnologie http://www.innovazione.gov.it (in
(Ministry for Innovation and Technology) English and Italian)
(CoR Italian Delegation) – Coordinator: e-mail: italiana_cdr@regione.fvg.it
Costantino Condorelli
Italian government http://www.governo.it (in Italian)
Regions http://www.regioni.it (in Italian)
Osservatorio sul federalismo ed i processi di http://www.federalismi.it (in Italian)

governo (Observatory on Federalism and
Public Governance)
132
LUXEMBOURG
INTRODUCTION
The size and population of Luxembourg is roughly the same as that of a region in any
other Member State. This makes Luxembourg a particularly interesting case for
studying the grassroots democracy phenomenon.
The municipalities (communes) are the only tier of local government in the Grand
Duchy, their autonomous status dating back to the country's establishment as an
independent state.
In the absence of intermediate tiers of government between the municipalities and the
state, the wide-ranging duties performed in other countries by provinces and the like
have been assumed in recent years by inter-municipal consortia (syndicats de
communes).
Despite the seemingly highly centralised state structure, which gives the central
administration a tight hold on local bodies (system of tutelage or tutelle), there is a
highly efficient system of local democracy, as borne out by the fact that citizens
identify closely with their municipalities.
The municipality is a fully-fledged tier of government and looks after the interests of
the local community in a vast range of areas such as local policing, roadworks, water,
nursery and primary education, and social welfare.
133
Naturally, any account of the relations between citizens and local government
institutions must take account of Luxembourg's vast foreign population and of its
cross-border commuters with dual nationality.
The state level, in turn, is particularly close to the needs of the population; the party
system, supported by a long tradition of social consultation (which is centred around
the system of Chambers of Trade), guarantees a stable executive and accountable
representation. This, plus the existence of a highly homogeneous society, gives us a
country in which local democracy has to address the issues facing an efficient and
well organised administration rather than questions relating to the representation and
composition of local government bodies.
Citizens' relationships with government institutions seem to be marked by the recent

controversy surrounding forms of direct democracy (referendums, public petitions),
proposals for creating a post of ombudsman, and ambitious programmes for
developing eGovernment.

1.1 Organisation of the state in the last thirty years. Historical

profile
The Grand Duchy of Luxembourg was created at the Congress of Vienna in 1815 as
part of the Kingdom of the Netherlands, whose king also took the title of Grand
Duke.
134
Luxembourg's present constitution, adopted in 1868 in the wake of the 1867 Treaty of
London, has close links with the 1831 Belgian constitution, which was in force in
Luxembourg until 1839 following the Grand Duchy's participation in the 1830
revolution in Belgium.
The revision of the constitution in 1919 ended the autocratic regime in which power
had been held solely by the Grand Duke (who was not obliged to seek the views of
parliament except where provided for in the constitution), introduced the vote for
women and made provision for referendums; the first referendum, held on 28 June
1919, voted for the retention of the monarchy.
The Grand Duchy is therefore an hereditary constitutional monarchy (House of

Nassau), with the Grand Duke as the head of state.
Legislative power is exercised by the Grand Duke (who is formally empowered to

initiate legislation and who promulgates the laws) and by a single Chamber of sixty
deputies elected by universal suffrage every five years. The risk inherent in a single
Chamber system of legislative texts not being thoroughly debated is mitigated by the
obligation to discuss each legislative draft twice at least three months apart, and by
the deterrent role played by the Council of State, which is obliged to issue an – albeit
non-binding – opinion. (The sole effect of a negative Council of State opinion is that
a new vote must be held at least two months later.)
The second parliamentary debate can be dispensed with if the Chamber and Council
of State agree. (In practice, the Council of State insists on the full procedure being
applied only in particularly sensitive cases.)
The legislative process also provides for the consultation of six Chambers of Trade,
which are elected every five years by universal suffrage under a 1924 law. These
135
Chambers of Trade can also initiate legislation in areas of interest to the groups they
represent.
The Grand Duke is also the head of the executive and – in the words of the
constitution – "is the sole repository of executive power", "appoints and dismisses the
members of government" and "may dissolve the Chamber". (He may also issue a
veto, though this right is generally regarded as a leftover from the original
constitution, which escaped all the subsequent acts of revision.)
In reality, however, all executive duties are performed by the government; ministers
are also nominated by the head of government, who in turn is appointed by
parliamentary majority.
The Grand Duke also appoints (for life) the 21 members of the Council of State - the
highest administrative jurisdiction and consultative body within the state, which is
invested with legislative prerogatives as indicated above.
1.1.1 The evolution of the regionalisation/federalisation procedures and

developments
The eight revisions of the constitution1 have not changed the system of political and
administrative decentralisation, based on the division of the country into
municipalities (of which there are 118 at present).
Because of Luxembourg's small area and small population, the national tier of
government
1
In 1919, 1948, 1956, 1972, 1979, 1983, 1988, 1989 and 1997
136
is more akin to that of a regional government with the result that the state of local
democracy must also and above all be assessed with reference to the functioning of
the national democratic institutions.
The constitution stipulates that "the Grand Duchy of Luxembourg is a democratic,

free, independent and indivisible state"2 and that "the boundaries and chief towns of
judicial or administrative districts and of cantons and municipalities may only be
changed by law"3.
Despite their mention in the constitution, legislation has made no provision for
cantons or any other local authorities apart from municipalities, which, under the
terms of Article 107,
shall form autonomous authorities, on a territorial basis, possessing

legal personality and capable of administrating their assets and interests
through their own bodies. In each municipality there shall be a
municipal council directly elected by the inhabitants; the conditions to
stand as a candidate for election or to be entitled to vote shall be fixed
by law.
The council shall approve an annual budget and verify the accounts. It
shall issue municipal regulations, except in cases of emergency. It may
impose municipal taxes, with the Grand Duke's approval. The Grand
Duke has the right to dissolve the council.
2
Article 1
3
Article 3
137
The municipality shall be administered by a college of the burgomasters
and aldermen, who must be chosen from among the municipal
councillors. The nationality requirements to be fulfilled by the members
of the college of the burgomasters and aldermen shall be determined in
a law passed in accordance with Article 114 (5).
The composition, organisation and powers of municipal bodies shall be

regulated by law. The statute applicable to municipal officials shall be
laid down. The municipality shall participate in educational activities,
as laid down by law.
Supervision of municipal activities shall be regulated by law. Certain

acts of the municipal authorities may be subject to the approval of the
supervisory authority and may be cancelled or suspended should they be
illegal or contrary to the public interest, without prejudice to the powers
of the law courts or administrative tribunals.
Article 108 gives municipal authorities the exclusive right to prepare birth, marriage
and death certificates and keep the relevant registers.
The system of political and administrative decentralisation is governed by the

municipal act, as most recently amended in 19884.
4
Mém. A. (1988), p. 1221
138
of government
Although the system of local democracy naturally benefits from central government
being extremely close to the grassroots level, the municipal act provides a setup akin
to that of an archetypal centralised state, in which the central authorities keep a tight
rein on the local authorities.
The municipal council is elected by universal suffrage for a period of six years and
has a variable number of councillors depending on the size of the local authority. The
college of the burgomaster and aldermen is answerable to the municipal council, and
its members are selected from among the members of the municipal council.
A series of extremely detailed coordinating and monitoring mechanisms is indicative

of the close ties between central and local administrations; the Grand Duke may
dismiss municipal councillors and veto municipal taxes; apart from being the
municipality's executive body, the college of the burgomaster and aldermen also acts
on behalf of the central administration, being responsible for the application within
the municipality of laws, regulations and administrative provisions; and the
burgomaster is also responsible for the application of police laws and regulations.
The municipalities are divided up, for supervisory purposes, into the three districts of
Luxembourg, Diekirch and Grevenmacher; the district commissioner is entrusted
with the task of supervising the administration of the municipalities; he also acts as a
link between the municipal and central authorities. The district commissioners are
appointed by the Grand Duke from among the officials working for the Ministry of
the Interior.
139
The municipalities have regulatory power with regard to matters falling within their
remit or matters of local interest (e.g. urban planning); these regulations, which are
generally applicable - albeit only within the territory of the local authority, are vetted
by the Ministry of the Interior in order to avoid any conflicts with legislative
provisions or government regulations.
The 1988 municipal act relaxed to some extent the tight hold on municipal
administrations by empowering the latter to contest central government decisions on
matter of local interest in the courts.
The 1900 municipal act - which was subsequently amended in 1958 and 1981 – set
up inter-municipal consortia (syndicats de communes) to pursue matters of joint
interest.
In 1981 provision was made for the establishment of monofunctional and

multipurpose syndicats and multifunctional and multipurpose syndicats capable of
serving more than one purpose, thereby extending the scope of the 1900 act, which
only provided for monofunctional and monopurpose syndicats.
However, the impact of this act was initially quite small (only six syndicats had been
set up by 1950, but the number rose to 30 by 1980). In an attempt to find an optimum
size for subnational tiers of government which exercise powers and thus to improve
the efficiency of public authorities' actions, the Economic and Social Council has in
fact been prompted to recommend that smaller municipalities be merged5.
5
CES (2001a)
140
The main vehicle for inter-municipal cooperation is Syvicol (syndicat intercommunal
à vocation multiple des villes et communes), which was founded in 1986 and sees
itself as an "inter-municipal consortium for all towns and municipalities in
Luxembourg and all other inter-municipal consortia6". This body acts as a
mouthpiece for local government bodies vis-à-vis central government institutions and
also plays a consultative role in the legislative process in matters that concern it.
Inter-municipal cooperation has recently been thoroughly reformed. A law of 23

February 20017 granted the syndicats de communes legal personality and gave them
powers similar to those held by larger subnational units, such as are not to be found in
Luxembourg.
The main areas of activity of the inter-municipal consortia are: local and social
services; water supplies; local transport; land-use planning and management; and – in
general – all activities which individual municipalities do not have the economic
capacity or territorial power to organise and manage.
metropolitan cities
Because Luxembourg is so small and has an extremely uniform subnational structure,

a different legal regime for metropolitan areas has not been necessary.
The only provision which distinguishes between urban areas and the rest of the
country is Article 109 of the constitution, which stipulates that the city of
Luxembourg is the capital of the Grand Duchy and the seat of the government.
6
www.syvicol.lu
7
Mém. A – 36, 26 March 2001, p. 859
141
In addition, the municipal administration of Luxembourg is able to liaise with the
national government without the mediation of the district commissioner.

The three main political parties are the traditional Crëstlech-Sozial Vollekspartei
(Christian-Social Party), Parti Démocratique (Liberal Party) and Parti Ouvrier
Socialiste (Socialist Party).
The 1990s saw the emergence of new political formations such as the environmental
movement and the pensioners' movement (Pensioners' Action Committee or ADR,
Action Committee for Democracy and Fair Pensions).
The national parties are not highly organised at subnational level, as is

understandable in such a small country where decentralisation centred on the
municipal level is essentially for administrative purposes. Chapter 2 below explains
more about how the party system functions in practice.
There would appear to be no regional parties. Chapter 2 again says more on this
matter.
142
There is little cooperation between organisations and citizens on urban matters (apart
from the planning of social housing, where a large number of the projects are drawn
up by municipalities with the help of national tenants' associations). However, rural
programmes are prepared jointly, using the partnership method provided for in the
Community's Leader programme.

LEVEL
The turnout in the most recent national elections held in 1999 was extremely high; it
was less than 80% in only four of the 118 municipalities and – even more
significantly – was more than 85% in the majority.
The distribution of votes between parties in the country's four electoral districts has
remained stable, with the traditional parties (Christian-Social, Liberal and Socialist)
having received the same percentages in all the elections between 1959 and 19998.
The distribution of seats in the Chamber since the 1980s reveals a slight decline in the
seats held by the traditional parties. This decline has been mirrored by the emergence
of new formations such as the Greens and the Pensioners' Party ADR (see Table 1.1.
at the end of this section).
8
See http://db.statec.lu
143
However, in local elections, the new parties play a more marginal role, as shown in
Table 1.2.
The Chamber of Deputies approved the reform of the electoral law on 12 February
2003. This new law will apply at the next national elections in 2004.
The new law consist of a general section containing provisions common to national,
municipal and European Parliament elections and special sections for each of the
three types of election.
The main changes are as follows: the maximum age for participating in elections has
been raised from 70 to 75 and the minimum age for voting and standing as a
candidate has been set at 18; the number of signatures required to support candidates
has been raised (though the figures are still very low: 100 signatures for national
elections, 50 for municipal elections, and 250 for European elections); a voter may
now request a postal vote up to 30 days prior to elections; the grounds for ineligibility
and incompatibility have been updated (this is particularly important in a country
where a large part of the electorate studies or works abroad and is therefore often out
of the country); the right to vote or stand as a candidate in municipal elections has
been extended to Community citizens resident in the Grand Duchy for more than five
years; and the right to vote in municipal elections has also been granted to non-
Community citizens who have resided in the Grand Duchy for five of the last seven
years and conform with the legislation governing the right of entry and right of
residence.
In municipal elections, the second ballot has been abolished. This is because the short
time lapse between the two ballots might rule out postal voters plus the fact that the
changes in the pattern of voting in the second ballot have had little impact relative to
the high cost involved. Another major change is the abolition of electoral wards,
144
which should allow the electorate in each municipality (now considered as a single
legal entity) to identify more closely with their elected representatives.
Article 51 of the constitution, introduced when the constitution was revised in 1919,
is worded generally and it is not possible to state with certainty whether the
referendum referred to therein is an abrogative or consultative referendum.
The constitution merely states that "the electors may be requested to vote in a
referendum in cases and under conditions to be determined by law"; however, it is
generally believed that the type of referendum referred to in Article 51 has no direct
effect on lawmaking9.
At a local level, Articles 35 and 36 of the 1988 municipal act10 leave no doubt that
referendums are to be merely consultative.
Article 35 stipulates the following:
"The municipal council may call on electors to vote in referendums on matters of

interest to the municipality and under conditions determined by it. The referendum
shall take place automatically when requested by a fifth of the electors in
municipalities with more than three thousand inhabitants and a quarter of the
electors in the other municipalities. In such cases, the council shall organise the
referendum within three months of the request being made.
9
Thewes, M. (1998)
10
Mém. A. (1988), p. 1221
145
The arrangements for the referendum shall be determined by Grand Ducal
regulation. The provisions of the electoral law on compulsory voting, and in
particular Articles 259 to 262 thereof, shall apply.
In all cases, the referendum shall be merely consultative."
Article 36 in turn stipulates the following:
"Notwithstanding the provisions of Article 35, the municipal council or the college of
the burgomaster and aldermen may ask municipal administrators, in whole or in
part, for their opinion on a specific municipal problem.
Participation shall be optional."
In practice there are signs of a definite lack of interest in referendums at national

level (so much so that the basic law on referendums, provided for in Article 51 of the
constitution, has still not been approved). On the other hand, since the introduction of
local referendums by the 1988 municipal act, local consultations have been
widespread, helping to strengthen relations between local institutions and the general
public (cf. section 5).
The failure to act on the constitution's referendum provisions, and the lack of effect
on the system of lawmaking, should not, however, lead us to conclude that
referendums are of little importance in Luxembourg; the key moments in
Luxembourg's constitutional and social history have in fact been marked by major
referendums.
In the first referendums in 1919 Luxembourgers voted for the retention of the
monarchy (and hence against its replacement by a republic) and for economic union
146
with France (however, the failure of negotiations with France resulted in the
establishment of the Belgo-Luxembourg Economic Union – BLEU).
The 1937 referendum was held in response to the crisis triggered by the electoral
success of the Communist Party, the product of the split within the Socialist Party in
1921, which had resulted in the secretary-general Zénon Bernard being elected to the
Chamber of Deputies. The subject of the referendum was the government's loi
d'ordre,which sought to ban membership of any grouping "whose purpose is to
abolish or change the constitution by force or any other illicit means"; spurred on by
the opposition in which the unions played an important role, 50.67% of the electorate
voted "No" to the question of whether they were in favour of "the enactment of the
law ordering the dissolution of the Communist Party and of any other organisation
wishing to change the constitution or national legislation by means of violence or
threats".
The present government has stated that it intends to strengthen the instruments for
direct democracy provided for in the constitution, and in particular that it wishes to
resort to a referendum in the event of "a fundamental and substantial revision of the
constitution"(1999 government declaration).
In his 2003 state-of-the-nation address, the Prime Minister explained draft legislation
for giving the general public the right to initiate legislation and for holding
referendums as part of this commitment.
With regard to the right to initiate legislation, the plan is to entitle 10,000 voters on
the electoral register to present draft legislation, which the Chamber would then be
obliged to examine.
147
Should such draft legislation be rejected in the first reading, it could be put to a
referendum if at least 25,000 voters so requested.
Approval of this draft legislation would also provide a legal basis for the referendums
laid down in Article 51(7) of the constitution, more than eighty years after the
introduction of this provision; as explained previously, such a referendum would not
be binding on the Chamber, but it would carry special political weight.
If the revision of Article 114 of the constitution – which is currently being discussed
by the Chamber – were to be approved, the electorate would also have to be
consulted, at the request of one quarter of the deputies or 25,000 voters, on the
revision of the constitution, which should be halted in the event of the referendum
producing a "No" vote.
By government decision of 27 June 2003, the future European Constitution will also
be put to a national referendum once it has been adopted by the 25 heads of state and
government.
On 16 July 2003, the Chamber of Deputies adopted a draft law on the creation of an
ombudsman (modelled on the post created for the first time in Sweden in 1809), in an
attempt to facilitate citizens' participation in public decisions which are of interest to
them.
The ombudsman will be attached to the Chamber of Deputies and will be an

independent body not answerable to any executive authority.
The ombudsman will be a Luxembourg citizen who has a university degree and a
good command of the three national languages, and will be appointed by the
Chamber of Deputies for a non-renewable eight-year term.
148
Because of Luxembourg's size and population it has no regional tier of government in

the proper sense. Similarly, there are no large subnational divisions with important
powers, such as provinces.
The municipality, however, has a longstanding tradition, which has favoured the
formation of close ties with local communities.
The strength of such ties is demonstrated, for example, by the high turnout in local
elections and the frequent use of consultative referendums to determine local policy
(cf. 2.1. and 2.2. above).
The decision taken during the 2003 electoral reform to abolish the subdivision of
municipal constituencies into electoral wards (cf. 2.1. above) should make it possible
for local populations to identify more directly with the municipal authorities.
Finally, the ties between citizens and local authorities should be strengthened by the
establishment of the post of ombudsman, who is also to be responsible for municipal
administrative procedures.
149
Table 1.1
Distribution of seats in parliament 1984 1989 1994 1999

Number of seats
All parties 64 60 60 60
Christian Social Party (PCS) 25 22 21 19
Socialist Party (POSL) 21 18 17 13
Liberal Party (PD) 14 11 12 15
Communist Party (PC) 2 1 - -
The Left (Déi Lénk) - - - 1
Alternative Green Party (GAP) 2 2 51
Environmental Initiative Green List 5
- 2
(GLEI)
ADR - 4 5 7
1
The Greens (Déi Gréng). Source: Statec 2002
Table 1.2
Municipal councils with proportional representation – number of seats

1987 1993 1999
All parties 329 349 420
PCS 114 114 126
POSL 120 114 139
PD 71 78 106
The Greens . 231 23
ADR . 7 11
The Left 112 42 6
Others 13 9 9
1
Glei/Gap Source: Statec 2002
2
(still PC, Communist Party)
150
In economic matters the Luxembourg constitution shows a liberal imprint but also
reveals its original autocratic approach, which has remained formally intact even after
the move to greater democracy in 1919.
Article 11 of the constitution stipulates the following:
"The law shall guarantee the right to work and shall enable every citizen to exercise
this right.
The law shall organise social security, health protection, and rest for workers and
shall guarantee the freedom of trade unions.
The law shall guarantee the freedom of trade and industry and the exercise of
professional and agricultural activities, subject to any restrictions that may be
imposed by the legislature."
Article 16 guarantees that "no one may be deprived of his property except on grounds
of public interest in cases and in the manner laid down by the law and in
consideration of prior and just compensation", while Article 17 states that
"confiscation of goods may not be instituted as a penalty".
Thus, freedom of economic activity and property guarantees are subject to

considerable powers of intervention: whereas private property can be expropriated on
151
"public interest" grounds, the restrictions applicable to the freedom of economic
activity are not specified.
In reality, the socio-economic situation in the Grand Duchy, in which the interests of
the mercantile, commercial and professional classes are central, rules out the
possibility that such provisions could be used to impose an interventionist approach
to the economy.
The six Chambers of Trade that have been established are indicative of the central
role played by small business. Apart from representing the interests of particular
trades, such Chambers take part in the legislative process by means of the mandatory
consultation provided for in the law of 4 April 1924 (see 3.4. below for the role of the
Chambers of Trade).
The principles governing state finance are laid down in Articles 99 et seq. of the
constitution. Above all, in accordance with Article 99,
"No state tax may be imposed except by law.
No loan to be borne by the state may be contracted without the consent of the
Chamber.
No real property of the state may be disposed of, unless authorised by special law. In
any event, a general law may fix a limit below which no special authorisation is
required.
Every important purchase of real property by the state, every large infrastructure
project or important building work for the benefit of the state, and every major
152
commitment of funds by the state, must be authorised by special law. A general law
shall set the threshold above which this authorisation is required.
No commitment may burden the state budget for more than one financial year, except
by special law.
Article 100 in turn stipulates that "state taxes shall be voted on annually. Legislation
introducing such taxes shall remain in force for only one year unless renewed".
The budgetary procedure is laid down in Article 104, which states that "each year,
the Chamber shall adopt the accounts and the budget. All state revenue and
expenditure shall be indicated in the budget and the accounts".
With regard to the guarantees granted to citizens vis-à-vis the state as the authority
responsible for levying taxes, Article 101 guarantees the equality of taxpayers, stating
that "no privilege may be introduced in the matter of taxation. No exemption or
abatement may be granted except by law"; whereas Article 102 stipulates that "save
in cases formally listed as forming an exception by law, no payment on assets may be
demanded of citizens or public bodies except in the form of state or municipal taxes".
With regard to social security provision, Article 103 stipulates that "no pension,
allowance in lieu of salary, or bonus charged to the treasury may be granted except
by law".
And finally, Article 105 makes provision for an auditing body – the Court of Auditors
– which is required to "verify the financial management of state bodies,
administrations and services; other tasks relating to the verification of the financial
management of public funds may also be assigned to it by law.
153
The duties and organisation of the Court of Auditors, as well as its verification
procedures and its relations with the Chamber of Deputies, shall be laid down by
law. The members of the Court of Auditors shall be nominated by the Grand Duke on
a proposal from the Chamber of Deputies.
The general state budget shall be submitted to the Chamber of Deputies with the
comments of the Court of Auditors".
The public debate on the ending of state intervention in the economy, sparked off
inter alia by the locomotive role assigned to private economic initiative, has centred
on the liberalisation and privatisation of public services (cf. 4.1. below).
In its 2001 report on the role of the state, the ESC made a telling remark in this
respect when it underlined how the liberalisation of the markets had to aim at
increasing transparency, ensuring fair pricing, and making it easier to monitor
compliance with quality standards. The conclusion was that privatisation and
deregulation were welcome only to the extent that they were supervised by effective
regulatory bodies.
For this reason too, Luxembourg has not yet seen the large-scale privatisations that
have taken part in other European countries in the energy, postal and
telecommunications sectors11.
11
CES (2001a), pp. 31 et seq.
154
Article 99 of the constitution states that "no municipal charge or tax may be
introduced except with the consent of the municipal council". This provision
guarantees local authorities' budgetary powers to a considerable degree, though this
guarantee is weakened by the following provision stating that "the exceptions shown
by experience to be necessary as regards municipal taxes shall be laid down by law".
Notwithstanding municipalities' right to veto the creation of new taxes, taxation

decisions remain in the hands of central government.
Trends in recent financial years and the forecasts for 2003 indicate that local
authorities are running up constantly mounting deficits due, on the one hand, to fewer
transfers from central government and, on the other hand, to the growing debts being
accumulated by municipalities in funding local public services.
As the latest report of the Economic and Social Council on socio-economic trends
shows, state debts are at a historic low and are due to be eliminated by 2008, whereas
local authority debts are rising steadily and in mid-2001 were around EUR 453
million or 2.1% of GDP12.
12
CES (2003)
155
the unions
The makeup of the Luxembourg labour market is quite special, with 65% of the
workforce being foreign and 30% cross-border commuters13.
Moreover, service provision far outweighs manufacturing in the Luxembourg

economy. Hence the legislature's and politicians' focus on the demands of small
businesses and the professions, which are seen as the motor driving the economy
forward.
Naturally, in such a situation, social conflict is extremely rare and there is a clear
tendency towards corporatism in consultative bodies. A central role is played by the
Economic and Social Council, a body representing the various social groupings with
a consultative role in economic, financial and social matters, and the system of
Chambers of Commerce and Chambers of Trade.
The members of the Chambers of Trade are appointed every five years, by universal
suffrage, using a procedure that is analogous to that used for the national elections.
Each Chamber of Trade can submit proposals for legislation to the government and
deliver obligatory – if not binding – opinions on all (ministerial and Grand Ducal)
laws and decrees which are of interest to the category it represents.
These Chambers of Trade are thus hybrid institutions, which alongside their normal
function of providing trade union representation perform a special function by
participating in the exercise of national sovereignty14.
13
CES (2003)
14
Thewes, M. (1998), p. 504
156
For workers in paid employment, trade union freedom derives under Luxembourg
law from the right of association provided for in Article 26 of the constitution and
guaranteed by the law of 11 March 1936, which, inter alia, makes it illegal to require
that anyone taking up employment must belong (or must not belong) to a trade union.
The law of 10 February 1958 introduced into Luxembourg law the obligations
stemming from ILO Conventions 87 and 98 concerning protection of the right to
organise and to bargain collectively and the protection of workers against acts of
discrimination.
Under case law, trade union organisations which have not opted to register as not-for-
profit organisations are denied the right to initiate legal proceedings, even for
protecting the legal interests of members15.
The law of 12 June 1965 on collective wage agreements grants trade union
organisations which have negotiated a collective agreement, the right to initiate legal
proceedings in respect of any action stemming from such a collective agreement.
The right to strike, and the corresponding right of lockout, are not enshrined in the
constitution, but the preparatory work for the 1948 constitutional assembly show that
this was considered unnecessary given that the right to strike was an attribute or
consequence of the freedoms enjoyed by trade unions16. The Court of Cassation17 has,
however, stipulated that participation in a strike is a legitimate and lawful act and
constitutes for each worker a right that is implicitly proclaimed in Article 11(5) of the
constitution, while the Attorney-General, in an opinion on the right to strike, has
15
Schintgen, R. (2000)
16
17
Judgment of 24 July 1952, in Pasicrisie luxembourgeoise, vol. 15, p. 355
157
pointed out that while the constitution only expressly sanctions the freedom of trade
unions, it is nonetheless necessary to recognise that this freedom also enshrines the
right to engage in trade union activity since without such a right the freedom of trade
unions would be illusory18.
The right of lockout is implicitly affirmed in the aforementioned law of July 1965 on
collective wage agreements, which obliges an employer who is party to a collective
agreement not to threaten or enforce a lockout.

Because Luxembourg is such a small country (it is roughly the same size as one of
the smallest Nuts III regions in Community statistics), its central government and the
Community institutions are the main partners responsible for managing the structural
funds, without the local authorities playing any appreciable role. This also tallies with
the system of indirect funding used for local authorities. In the case of the structural
funds, too, the local authorities act mainly as the recipient for Community resources
that are passed on by central government.
Assistance from the Community's development and cohesion funds is understandably

low, given Luxembourg's socio-economic situation. However, the level of structural
fund use in the fields where assistance is provided (for example, the development of
transport networks and tourist infrastructure) is amongst the highest in Europe19.
18
19
CES (2003)
158
OF PUBLIC SERVICES

of public services
Under the system adopted by the European Commission, Luxembourg's policy in the
field of public services is based on the concept of services of general interest (i.e.
services, commercial or otherwise, regarded as being in the general interest and hence
subject to specific public service obligations) and the concept of services of general
economic interest (i.e. commercial services which satisfy a general interest and are
hence subject to specific obligations, as in the case of network-based services such as
transport, energy and communications).
Seen in economic terms, public services correct deficiencies in market mechanisms.

Hence "the state intervenes only in a subsidiary capacity when self-regulating
mechanisms do not function adequately, i.e. do not permit general access to goods
and services, in the interest of society's economic, social and cultural cohesion"20.
Given the quintessential nature of a good and the fact that market failure must exist as
a precondition, it is possible to pinpoint three types of public services: services which
counter exclusion; services which contribute to social cohesion; and services which
promote the balanced and efficient use of resources. The public service concept is
therefore closely linked to the concept of general interest and draws on three
fundamental principles – continuity, equality and adaptability21.
20
CES (2001a), p. 33
21
CES (2001a), p. 34
159
A key role in the regulation of public services is played by the universal service
concept – the sum total of all the obligations which are designed to ensure access
everywhere to essential quality services at an affordable price.
This reference framework, set out as part of the planning of public services policy, is
reflected in the way legislation is implementation.
The legal and regulatory basis for the introduction of the system of universal service
is provided by the law of 21 March 1997 on telecommunications and the Grand
Ducal regulation of 26 May 1998 on universal service in the field of
telecommunications; the law of 24 July 2000 on the organisation of the electricity
market; the law of 15 December 2000 on postal services and financial postal services;
and the law of 6 April 2001 on the organisation of the natural gas market22.
General interest services are seen as being part of the social market economy23, so
that the activities forming services of general interest are crucial for the
implementation of civil and social rights, given that they must satisfy the following
needs in particular: social protection (including the guarantee of a minimum income,
the right to decent housing, and access to certain financial services, such as the right
to open a current account and to obtain credit); education; health; information and
22
In the view of the Economic and Social Council, however, apart from the implementation of
the two Community directives on telecommunications and postal services, sectoral
legislation has not yet defined the public service concept with sufficient precision nor laid
down the minimum services to be guaranteed to users with sufficient certainty. See CES
(2001a), p. 35.
23
In the view of the authors of the CES 2001 report on the state's role, "social progress
depends on economic progress, but the latter cannot be sustainable without social progress.
The principles of the market economy must be complemented by social principles. This is the
very essence of the European social model, which is not a handicap but a strength
guaranteeing the durability of economic development".
160
culture; provision of drinking water and energy, communication and transport
services.
The state, in particular, guarantees that all citizens are able to open a current account
and to have access to credit, notwithstanding a modest income or an atypical or
instable work situation, so as to be able to put their housing or business start-up plans
into effect. Reference should be made in this context to article 30 of the law of 15
December 2000 on postal services and financial postal services24, which provides
these rights with a legal basis.
Social services in Luxembourg have expanded enormously in recent times,

establishing a framework within which the state lays down by legislation the criteria
to be respected by bodies working in the sector (mainly private).
One "new" service of general interest is the assurance dépendance25 (insurance

against the risk of no longer being able to live independently in old age), which is
mainly provided privately and not directly by the public sector.
As the framework for the economic constitution described above shows, direct state
participation in private companies' capital is not ideologically driven in Luxembourg,
but is rather the result of a pragmatic approach, based in many cases on strategic,
economic or social considerations.
24
Mémorial A-135, p. 2963 (documents parlementaires n. 4524), as amended in Mémorial A-
141, p. 3296
25
Cf. CES (2001a), p. 111
161
The state has thus become a shareholder in a considerable number of companies
operating in the services sector such as the Central Bank (BCEE), the post office
(CCP), and the Luxembourg stock exchange in the financial sector; Cegedel, SOTEG
and CEGECOM in the energy sector; SES, the RTL Group, and postal and
telecommunications firms in the communications sector; and SNCFL, LUXAIR and
Cargolux in the transport sector.
The liberalisation of these markets and the provision of services therein has thus not
been accompanied by a coherent plan for state sell-offs, with the result that the state
still has a share in these firms' capital and the physical infrastructure.
In its 2001 opinion on the state's role, the Economic and Social Council therefore
recommended that a complete list of all direct and indirect state holdings be drawn up
first and foremost, and added that when managing its holdings the state had to take
constant account of factors linked to the national interest above and beyond the
interests of the individual firms in question. In particular, the aim should be to
channel private savings into productive activities. At the same time, in the case of
firms that were fully state-owned, the policy should be to open up ownership26.
As for market liberalisation and privatisation, the privatisation policy pursued is

generally cautious bearing in mind that the objective according to the Economic and
Social Council is "to guarantee an appropriate balance between liberalisation, which
will have to generate healthy and balanced competition within the sectors in question,
and the relevant measures, which are based on the principles of the accessibility,
quality and continuity of universal service and the transparency of user
information"27.
26
CES (2001a), pp. 95 et seq.
27
CES (2001a), p. 101
162
The main sectors being liberalised are, as stated above (cf. point 3.2),
telecommunications, postal services and energy.
Following the outsourcing of services of general economic interest, the Luxembourg

Institute for Regulation (ILR) was put in charge of budgetary control and auditing the
management of the services. This body was set up to regulate competition in the
liberalised sectors for the purpose of ensuring compliance with the fundamental
principles of services of general interest, and in particular service continuity, the non-
discrimination of users and free access to services, and service neutrality and
independence.
Another task of the ILR is to maintain a balance between the positive and negative
effects of service liberalisation. A constant watch must be kept – in a manner which
ensures that intervention by the public authorities, while confined to regulation,
guarantees democratic control and responsibility – on the responsible consumption of
natural resources with a view to lasting and sustainable development, the ban on the
abuse of dominant positions, and public service continuity and security.
So that this regulatory body can operate to best effect, the Economic and Social
Council has recommended financial autonomy and greater independence vis-à-vis
government administration and external operators, favouring the replacement of the
old law from 1970 on restrictive commercial practices28 with a "new legal framework
for competition", which regulates the abuse of dominant positions and restrictive
agreements29.
28
Law of 17 June 1970 on restrictive commercial practices, in Mémorial A-(1970), p. 892
29
CES (2001a), p. 55
163
Because of the prominence given to the efficiency of the public service sector, the
role of local authorities is essentially limited to implementing the policies laid down
by central government and to representing the demands of local populations with a
view to influencing national decision-making. Local authorities are not able to draw
up really autonomous local policies for the public service sector.


and results)
The eLuxembourg programme on IT use for public service activities was launched in
February 2001 for the purpose of putting Luxembourg at the forefront of the
information society in the EU30.
Statistics show that this objective has not been fully achieved, but in the field of
public administration comparative assessments indicate that the eLuxembourg
programme has enabled considerable progress to be made31. The one-stop portal for
SMEs (portail PME à guichet unique) launched in 1993 has been extremely
important.
Among the eight objectives of the eLuxembourg programme, the exploitation of new
information and communication technologies in the public sector for the purpose of
30
Déclaration gouvernementale 1999
31
The benchmarking exercise on eGovernment carried out for the European Union by Gemini
Ernst and Young shows Luxembourg way behind the other Community countries but with a
growth rate of more than 100% per year.
164
offering new electronic services has been assigned to the eGovernment project, which
is coordinated by the Luxembourg Ministry for the Civil Service and Administrative
Reform.
The eGovernment initiative covers numerous projects the purpose of which is to

supply, within the relevant area of administration (education, health, social services,
telecommunications), IT services which are accessible via all means of
communication. The ultimate objective is to make it unnecessary for the final users of
services to know a priori how the public administration is organised and how tasks
are distributed, and to free them from the logistical and time constraints linked to
traditional counter services and the need to supply and update the requisite personal
data.
It is planned to set up a one-stop portal for accessing public sector services, through
which users will be able to obtain a number of different services such as the provision
of free public documents not covered by secrecy laws (opinions, reports, brochures,
statistics, etc.), the downloading of service application forms, the supply of materials
for payment (publications, stamps, etc.) and the request for certificates and printouts.
Pending the definitive version of the one-stop portal, the National Commission for
the Information Society attached to the Ministry for the Civil Service and
Administrative Reform is promoting the harmonisation of the various eGovernment
initiatives, and particularly those to do with local administrations. It has published a
Charte de normalisation de la présence sur Internet de l'Etat, which apart from being
a technical guide for building local administrations' websites that are sufficiently well
harmonised to provide input for the future "virtual" one-stop shop, also constitutes an
embryonic charter of users' rights.
165
ICT is particularly widespread in schools, with the number of students per computer
and the number of Internet connections in schools placing Luxembourg at the
forefront of the EU. Despite this, the Economic and Social Council thinks that the
new communication technologies have not been adequately incorporated into
curricula, and points out that in the absence of an overall strategy what has been
achieved has been mainly down to individual teachers32.

Electronic voting is not available either for voting at home via IT networks or - in
simpler form - for voting in polling stations.
The political discussion on the network was given a major boost at the social forum
held in the Grand Duchy on 14 July 2003. As a result, all the bodies involved in
promoting direct democracy launched a joint portal www.demokratie.lu, which aims
to become the main centre of information for citizens and to carry forward the public
discussion on IT democracy and eGovernment and on direct democracy and
grassroots' participation.
Participation in the information society is regarded as one facet of the "universal

service" concept, given the view that the relationship between service providers and
users may be radically changed by any aspect of the information society and that the
more widespread use of IT networks can increase consumer importance, while at the
same time allowing service providers to make economies of scale as a result of their
32
CES(2003), p. 108
166
access to a worldwide market; this results in a democratisation of the markets, which
is also brought about by the increased scope for integrating citizens who are at risk of
being excluded, such as persons with disabilities and the inhabitants of remote or
peripheral regions33.
With regard to on-line access to goods and services in the private sectors, satisfactory
use is made of the Internet by both firms and households (according to
Eurobarometer data from November 2002, Luxembourg is in sixth position in the EU
for Internet use by households and second position for on-line shopping).
In the research sector, Luxembourg has benefited satisfactorily from taking part in the
Community eEurope programme. A central broadband network called GEANT has
been set up to which approximately 3100 research institutes are connected.
Within the context of the eEurope 2005 action plan, Luxembourg is proposing to
introduce broadband connections in the coming years on a wide scale.
The rates charged in Luxembourg, which have been approved by the ILR – the
authority responsible for regulating competition, are high, as the European
Commission's reports underline34.
Third-generation cellular technologies (UMTS) are being counted on to increase the

services on offer and the capacity of the networks: in order to overcome the problem
of setting up the relevant networks, due to the uncertainty of the legislative and
33
See CES (2001b), part B, chapter III. On this matter the Economic and Social Council takes
the same line as the European Economic and Social Committee, which regards the
information society as "an instrument for restoring regional equilibrium" (cf. European ESC
opinion of 20-21 October 1999 on services of general interest).
34
See in particular the Eighth Report of the Commission on the regulation of
telecommunications, COM(2002) 695 of 3.12.2002.
167
regulatory framework governing the granting of authorisations, the present
government presented a master plan on 17 March 2003 (entitled Stations de base
pour réseaux de télécommunications mobiles), which allows burgomasters to
authorise the installation of masts even if they have not been planned by the
municipality in question.
168
BIBLIOGRAPHY
CES, Comité Economique et Social (2001a), Avis. Rôle de l’Etat, Luxembourg.
CES, Comité Economique et Social (2001b), Avis. Evolution économique, sociale et

financière du Pays 2001, Luxembourg.
CES, Comité Economique et Social (2003), Avis. Evolution économique, sociale et

financière du Pays 2003, Luxembourg.
Committee of the Regions of the European Union (1996), Regional and Local
Government in the European Union: Luxembourg, Bruxelles
European Commission (2002), Report on the implementation of the

telecommunications regulatory package, COM(2002) 695 of 3.12.2002
Frieden, L., (1987), La constitution luxembourgeoise à la veille de sa révision,

Luxembourg, Bil
Majerus, P. (1990), l’Etat luxembourgeois, Luxembourg, Editpress
Majerus, P. – Goerens, J.M. (1995), The Institutions of the Grand Duchy of

Luxembourg, Luxembourg
Schintgen, R. (2000), La protection des droits sociaux fondamentaux dans l’ordre

juridique du Luxembourg, in La protection des droits sociaux fondamentaux dans les
Etats membres de l’Union Européenne, edited by J. Iliopoulos-Strangas, Athens –
Brussels – Baden-Baden
169
Statec, Service central de la statistique et des études économiques du Grand Duché du
Luxembourg (2002), Recueil de statistiques par commune, Luxembourg
Thewes, M. (1998), Lussemburgo, in Le Costituzioni dei Paesi dell’Unione Europea,

edited by Palici, E. Suni Prat, F. Cassella, M. Comba, Padua, Cedam
170
USEFUL LINKS
National government http://www.gouvernement.lu

The public administration's portal: access to the main sources http://www.etat.lu/SCL/
of legislation
Central statistical office http://db.statec.lu
Website launched at the Luxembourg Social Forum on 14 June http://www.demokratie.lu
2003 by bodies promoting institutes representing direct
democracy
Programme of the government in office (declaration) http://www.gouvernement.lu/gouvernement/programme/declarati
on_1999_lu.html
Syvicol (Inter-municipal multipurpose consortium www.syvicol.lu
representing towns and municipalities)
171
172
THE NETHERLANDS
INTRODUCTION
In terms of regional and local government structures, the Netherlands appears at

present to be a country in transition: after a long period of concentration of powers in
the state institutions, substantial changes in this field have taken place in the last few
years. Decision-making powers and responsibilities for the provision of public
services are gradually being transferred to the provinces and municipalities; the
central government is increasingly engaged in laying down general guidelines under
which local authorities can enjoy some independence in managing public affairs,
although for the time being the representatives of the national government
responsible for regional and local institutions retain considerable powers.
This traditional concentration of the decision-making process is also reflected in the

lack of an autonomous political sphere at local level, which normally shows the same
balance of forces as the national elections, as well as in the rather limited interest
shown by citizens in sub-national elections and the resulting lack of regional or local
party organisations.
This is accompanied by a growing trend towards coordination of the activities of

provincial and municipal governments; with the intention of making the services
provided for citizens more reliable and efficient, local authorities tend to rationalise
their own activities and seek as far as possible to cooperate both with the other
regional and municipal institutions and with the other social and economic forces in
the area, to the extent that they make increasingly frequent use of private
entrepreneurs to provide public services for citizens. These forms of cooperation are
made possible, among other things, by the high level of computerisation of public
offices and private dwellings, which is reflected not only in a functional management
173
of the relationship between user and public administration, but also in the possibility
of using IT instruments for wider purposes, such as electronic voting, on which Dutch
research undoubtedly leads the field in Europe.


profile

developments
Traditionally, the institutional framework of the Netherlands is described as a

"decentralised unitary state", a definition which suggests a considerable degree of
control, or at least monitoring, by central political actors of the local authorities'
exercise of their own powers. For example, in a comparative analysis carried out in
the 1970s of 15 federal or non-federal forms of state, the Dutch system appeared to
be the most centralised one in terms of the proportion of taxes payable to the central
government (98%)1. However, in the same study it was pointed out that, alongside
this "organisational" centralisation, there remains in the Netherlands a "sociological
federalism" – also historical/cultural in nature – which inevitably influences the
perception and function of local authorities within Dutch institutional frameworks
beyond what is laid down in the relevant constitutional rules.
1
Lijphart A. (1988), 189
174
Identification with the local authority – in the Dutch case above all the province,
which takes the traditional place of the regional authority in other systems – is
therefore very strong, both as an intermediate level of government between central
state and municipality, and, above all, as a point of reference in sociological terms2.
Dutch local authorities have enjoyed considerable autonomy since the time of the
Holy Roman Empire; this was maintained under Spanish Habsburg domination, up to
the creation of the first autonomous state entity, the Republic of the Seven United
Provinces (1568-1795), in which the province was endowed with its own territorial
independence. The cities took on a prominent role in the actual administration of the
territory, particularly in the western areas, while the function of the central
government necessarily remained in the background, favouring management of
public affairs based on compromise between distinct interests, in which one can
probably see the forerunner of the "associative" nature of the present-day Dutch
political system3.
However, the effectiveness of decentralisation was seen as an obstacle to the

reorganisation of the state apparatus as a whole. Partly because of the effectiveness of
the centralising influence of French domination in 1795-1813, the extent of local
autonomy was scaled down, to the extent that the Netherlands' first constitution of
1798 set up a unitary state in which the provinces were little more than an
administrative extension of the central government. This structure lasted for most of
the nineteenth century; the emergence of diverging social, political and economic
requirements produced corresponding interest groups, above all on party or religious
lines, but structured also on the basis of territorial subdivisions. This led to economic,
cultural and social questions – dealt with in federal systems through the local
2
Hendriks F., Raadschelders J., Toonen T. (1995), 216
3
Keman H. (1997), 352
175
authorities – being handled above all by the said interest groups (always with a view
to consensus among the parties involved), while provinces and cities remained
essentially a technical/legal back-up for a political will determined in other fora. This
was also to a large extent the inspiration for the constitutional model drawn up at the
request of King William II by the liberal Johan R. Thorbecke in 1848: the
Constitution of the Netherlands (1848), the Law on the Provinces (1850) and the Law
on the Municipalities (1851) helped to produce a form of state in which the local
authorities enjoyed a certain autonomy at administrative level, but always in the
context of a general accord with the central state, whose authorities were thus called
upon to produce the general rules under which provinces and municipalities could
develop their own management of the matters for which they were responsible. Here,
too, there was thus a marked search for consensus in the management of public
affairs in both directions along the centre-periphery administrative axis.
In the first half of the twentieth century the provinces retained this second-tier role,
while the municipal administrations succeeded in extending some of their
competences in technical/organisational fields in comparison with the central
government. The need to revive the economy after the Second World War led to a
reorganisation of the management of public affairs, starting with the role of the local
authorities. From the end of the 1960s onwards the gap between the various territorial
entities gave rise to a way of organising national policy based on more scope for
provinces and municipalities, which were undoubtedly more dynamic and effective,
especially in promoting cooperation at local level. Then, in the 1980s, the Dutch
Government set up the Montijn Commission (known by the name of its chairman)
with the task of analysing ways of reorganising local political activity, particularly in
terms of reviving the country's economic productivity. The Montijn Commission's
proposal to set up strong regional governments in the larger urban areas did not,
however, have significant effects. In this respect the local authorities have acted
independently in the meantime to set in motion joint or cross-frontier economic
176
development projects, particularly in a Community context, which in some cases
have produced very positive results4, and which seem to stimulate the central
authorities to create the conditions for economic planning centred on the local level,
encouraging a general reorganisation of Dutch provincial and municipal government
in the direction of more decentralisation of powers and functions.
An important restructuring step was taken with the adoption of the 1994 laws on
provinces and municipalities (known respectively as the Provinciewet and the
Gemeentewet), regarded as the framework legislation of the period, which
consolidated the ongoing process of decentralisation.
Then, in September 1998, a royal commission for the reform of local government was
set up, with consultative functions and with the aim of creating a new institutional
model for local authorities, focusing on a clear separation of powers between the
local council and the committee composed of the mayor and aldermen (Raad van
Burgemeester en Wethouders, B&W), officially the executive body of the
municipality, although the powers of the two institutions were not clearly
demarcated. The commission's conclusions were presented in January 2000 and
largely accepted by the Dutch Government, which used them as a basis for the Law
on Local Government adopted in February 2002. The latter made considerable
changes to the position of the municipal council, starting with the fact that aldermen
can no longer be members of it. At all events, the general thrust of the reform is to
consolidate exclusive executive power at local level in the hands of the B&W. At the
same time, the reform is intended to strengthen the decision-making power, in policy
matters, of the council, which is no longer burdened with administrative
4
Hendriks F., Raadschelders J., Toonen T. (1995), 227
177
responsibilities as it was before 2002, and has greater powers to monitor and verify
the implementation of its decisions by the municipal executive5.

of government
The Dutch constitutional system provides for two levels of local government:
provincial (there are 12 provinces) and municipal (at present there are 489
municipalities). Two categories of competences are attributed to them: autonomous
competences, whereby they can issue decrees, provided that these do not conflict
with the relevant legislation in force at national level (in the case of provinces and
municipalities) and/or with decrees issued in the same field by the province in which
the municipal authority is located (in the case of municipalities); and competences
granted by the state, under which local authorities are obliged to cooperate with the
central government to achieve objectives set at state level.
Government organisation is currently evolving towards a broader decentralisation of

competences and responsibilities to the local authorities, to narrow the gap between
the citizen and the public administration and to cut down on red tape. For example,
the Law on Municipalities lays down that municipalities with more than 100,000
inhabitants may now set up municipal districts with their own functions and
competences, each run by a district council6. Nonetheless, relations between the
central government and the local administrations continue to rest essentially on a
hierarchical principle, since the executives of local authorities still include members
directly appointed by the central government, whether for a province (the Queen's
Commissioner), for a municipality (where the mayor is appointed jointly by the
5
Denters B.J., Klok P.J., Van der Kolk (2003), 14
6
An option which has so far been taken up only by the cities of Amsterdam and Rotterdam.
178
Queen's Commissioner and the Government in The Hague) or for the water control
authority. Recently, however, an attempt has been made to introduce a relationship of
cooperation rather than dependence between central government and local
authorities; details of this will be given below. Another recent tendency is for local,
particularly municipal, authorities to cooperate on problems of common interest, such
as urban traffic or environmental questions: an initiative which could probably be
even more effective if coordinated at provincial level.
The sources of financial support for local authorities are of three kinds: local taxes,
local fees and transfers from the central government. State funds are allocated to the
provinces and municipalities in the form of funding for specific purposes, to which is
added general funding which in principle can be used by the local authorities in the
interests of their communities in the ways they deem to be best. The local authorities'
own sources of funds include the property tax and local charges (such as parking
fees), but it is also possible to introduce specific taxes, such as a tax on dogs or on
tourism.
The twelve Dutch provinces have responsibility for environmental management,

town and country planning, energy, and social, sporting and cultural activities. The
institutional structure of each province consists of a council (the "Provincial States"),
an executive body and a Queen's Commissioner. The members of the provincial
council, whose number is proportional to that of the citizens resident in the province,
are directly elected by the latter for four years, and elect in their turn the members of
the provincial government from among themselves.
The Constitution allows for conditions to be laid down by law for residents of non-
Dutch nationality to be granted the right to stand or vote in provincial elections,
provided that they meet the same requirements as those applying for this purpose to
179
Dutch citizens7. The Queen's Commissioner, appointed by the central government,
remains in office for six years and chairs both the legislative body (in which,
however, he has only a consultative vote) and the executive, thus acting both as a
representative of the central state and as the highest provincial authority. The
Commissioner is responsible for implementation of the measures taken by the council
or by the provincial government, but he can suspend their implementation where
there is reason to regard them as contrary to the law or the public interest, and they
need to be annulled by the Crown. If the annulment does not take place within 30
days from the Queen's Commissioner's submission, the latter must carry out the
measure in question.
The Netherlands now have 489 municipalities (June 2003) – a number which has
fallen considerably through the constant incorporation of smaller municipalities into
larger local authorities, as part of the general process of reorganisation of the
administrative structure, against the opposition of some smaller municipalities. It has
been calculated that 174 municipalities were absorbed by larger ones between 1979
and 1998. In the latter year only 25 municipalities – 4.4% of those in existence – had
fewer than 5000 inhabitants8.
As regards their role in the administrative apparatus, the local authorities have
competences of their own in the fields of water supply, traffic, building, the
management of state schools, social and health services, sport and recreational and
cultural activities.
In 1994 the central government launched a programme of urban renewal, with special
expenditure in 25 cities to improve the quality of their services in education, safety,
7
Article 130 of the Netherlands Constitution
8
Kraaykamp G., van Dam M., Toonen T. (2001), 404
180
health, employment, sport, culture and infrastructure, even creating the post of
Minister for Urban Policies to coordinate these measures.
The institutional organisation of the municipalities provides for a council, a

municipal government (comprising the mayor and the aldermen) and the mayor. The
municipal administrative authorities are officially placed under the supervision of the
province and the central government, which in fact make very little use of this power.
The council is directly elected for four years by all adult local residents, including all
foreign citizens who have been legally resident in the Netherlands for at least five
years. EU citizens acquire the right to stand in municipal elections when they become
resident in the Netherlands.
The council elects from among its members the aldermen, whose number is
proportionate to the municipality's population, while the mayor is chosen by the
Queen's Commissioner of the relevant province from among the names on a list
drawn up by a special committee of the municipal council; he or she is appointed by
the central government for six years, and the appointment can be renewed. In an
attempt to make the procedure for appointing the mayor more democratic, the option
has recently been created of holding consultative municipal referenda on the
membership of these lists, but for the moment there does not seem to be much
enthusiasm on the part of the citizens9. The mayor, who is responsible with the
aldermen for day-to-day local administration, chairs both the council and the
executive body, which is mainly responsible for carrying out the decisions with
regard to its territory taken by the central government and the relevant provincial
executive. As mentioned above, in 2002 a reform law sought to rationalise the role of
9
Denters B., Klok P.J. (2003), 14
181
local government bodies, above all by separating more clearly the council's functions
from those of the executive and by strengthening its decision-making powers10.
Finally, the water control authorities are public-law bodies, like the administrative
bodies mentioned earlier, and constitute one of the oldest forms of democratic
management of public affairs found in the Netherlands. Some of them go back to the
Middle Ages, and they are still extremely important in a country where more than
half of the land is below sea level. Responsible for protecting the country from
floods, these bodies control the building and management of dikes, sluices and
canals, water flows and levels, and the maintenance of water quality. The General
Council of each body is elected by property owners resident in the area covered,
while the executive committee and chairman are appointed by the central
government.
As the model followed by the various actors involved in administering the territory is
consensual rather than competitive, it is not surprising that among the local, and
above all municipal, bodies there is a high level of cooperation through agencies or
agreements for the supply of services. Coordination in this context is managed mainly
by the Association of Dutch Municipalities, which constitutes a real reference point
for the sector.
As mentioned above11, the Dutch Constitution gives local communities the power to
regulate and administer their own competences, freely defining within this framework
the objectives to be pursued and the ways in which their powers are exercised, as
10
See above, point I.1.
11
See above, point I.2.
182
long as these fit in with relevant national and provincial provisions. Moreover, local
authorities should be involved as much as possible in the application of national
legislation at local level, through what is known as co-governance, a strategy for
dividing up responsibilities in which it is difficult to identify any area where a single
level of government has exclusive competence.
Moreover, since the 1950s one of the priorities of the state authorities has been to
organise local government operationally on the basis of regional cooperation, above
all because in the Netherlands, given the population density and the limited space
available, the administrative obligations of the municipalities do not coincide with the
geographical limits of the conurbations. Nonetheless, the various proposals for
reform in this field have often remained a dead letter, particularly because of the
reciprocal vetoes of the various coalitions of sectoral interests12. Thus, for the time
being, the local authorities continue to practise the voluntary inter-municipal
cooperation authorised by the laws on Gemeenschappelijke Regelingen of 1950, 1985
and later. These allow for the setting up of "inter-municipal" government bodies,
linked to the municipal authorities and operating on a strictly consensual basis, or
with the possibility for each municipality involved to veto a measure under
discussion. In the latter case any possibility of an effective joint administration is
excluded; this is very likely to happen when the measures under discussion conflict
with interests strongly held by the electorate of a specific municipality. Thus the
instrument of "inter-municipal" government as at present constituted does not seem
appropriate for managing key questions at local level, such as economic planning,
acquisition of firms, coordination of fiscal policies and planning decisions13.
12
Toonen Th.A.J. (1993), 123-126
13
183
metropolitan cities
Some years ago the Dutch Government launched an integrated strategy of urban
policies, designed to create "the complete city" (de complete stad), i.e. a city capable
of meeting the community's needs effectively (Ministry of the Interior, 2000). The
strategy is based on an integrated political approach which makes it possible to take
action at the same time on the three aspects (economic, social and physical) of current
urban problems – especially in the case of large metropolitan areas. To carry out such
strategies, a Ministry for Urban Policy and Integration has recently been set up,
alongside the Interministerial Committee for Urban Policies and the Ministerial
Council for Urban Policies: however, these central government bodies operate in
close collaboration with the municipal authorities, also seeking to involve both public
and private partners, with the aim of achieving significant structural improvements in
the various fields of action.
A decentralised approach was chosen, placing the responsibility for the functioning
of cities above all in the hands of local authorities and their inhabitants, their business
community and their relevant institutions. This strategy enables each city to focus on
its own problems, at the same time allowing central government to assist local
authorities in carrying out their strategies, identified with the help of resident citizens
and in agreement with the national institutions. More specifically, the strategies to be
put into practice for each of the three aspects are as follows:
1) Employment and economy
Given the awareness that the economic vitality of a city is absolutely essential for
reviving its depressed districts, urban economic policies place the small and medium-
sized enterprises of the area at the centre of their action; the main objective is to
184
provide more job opportunities; the local authorities pursue this objective by
supporting the city's businesses (especially in the ICT and biotechnology sectors), but
without neglecting jobs in the less skilled areas, such as commerce, industry and
catering, and by providing training courses, e.g. in the IT sector.
2) Environmental development
Development of the physical environment makes it possible to improve the living,

working and general conditions of urban areas: to this end measures are envisaged to
renew residential areas, industrial zones and open spaces, with an improvement in
road conditions and consequent speeding up of traffic and reduction of environmental
pollution. However, these objectives can be achieved only through close
collaboration between municipal authorities and various categories of private legal
persons, such as owners of commercial concerns, entrepreneurs, investment
companies and building cooperatives.
3) Social context
The quality of city life is not measured solely in terms of an adequate, pleasant and
secure living environment, but also in terms of working conditions, proximity to
shopping areas, educational facilities and social cohesion. The main aim of measures
here is to improve social infrastructures, focusing on health, social security, safety,
youth policies, quality of life, social integration and the participation in local political
life of both native populations and communities of foreign immigrants, with special
attention given to the most vulnerable groups in this context (ethnic minorities,
disadvantaged individuals).
The objectives of these integrated urban policies are supported largely by the use of
European funding (European Regional Development Fund, European Social Fund),
185
and in particular for the 2000-2006 period with subsidies for priority objectives
(Objectives 2 and 3) and Community initiatives (Urban 2, Equal)14.
The larger cities (such as Amsterdam and Rotterdam) enjoy a high level of autonomy
in running their own administration, to such an extent that they operate almost as a
separate part of the local government system, capable even of exerting pressure on
central government; this is due to the special treatment in terms of autonomy which
they receive because of their size and the specific social, political and economic
conditions which characterise them. In general this results in high efficiency in the
provision of services by the city authorities, but it can involve problems for some in
terms of greater bureaucracy, precisely because of the special status of these large
municipalities within the traditional three-part structure of public administration.
1.2 Political and social players in the regionalisation/federalisation

associations
Traditionally the Dutch political scene has always been characterised by a large
number of parties, partly because of a highly proportional electoral system, the nature
of which (list voting rather than individual voting; constituency covering the whole
country; exclusion threshold of only 0.67%, i.e. virtually negligible) is enough to
explain why, for example, between 1945 and 1980 the level of non-proportionality
between the number of parties standing for the national elections and those actually
represented in Parliament was barely 1.115. Essentially, the Dutch electoral system
appears to do very little to reduce the number of parties, in accordance with a
14
See point III.5 below.
15
Lijphart A. (1988), 171
186
conception of politics which is habitually focused much more on the search for
consensus than on the opposition of diverging strategies.
In this context, the emergence of local parties, which necessarily express specific and
particular interests, therefore seems less likely. Only the partial decline of this basis
of political activity, as indeed of the traditional organisational forms of social life -
not only party political but also religious, for example – has led to local needs being
organised in a more structured way, generating political movements of a localised
kind, whose presence in the representative assemblies of Dutch provinces, and
municipalities grew in the 1990s.
However, the tendency to “nationalise” electoral choices, even in local elections, and
the appointment and control of provincial and municipal administrative authorities by
the central executive – in relation to which they therefore recognise a much greater
political responsibility than in relation to the local communities they administer –
undoubtedly act as a significant brake on the development of purely localised forms
of political organisation.
Even the afore-mentioned process of fusion of municipal authorities16, by preventing

the crystallisation of strong interest groups around specific needs solidly rooted in the
locality, tends to prevent the formation of political and party organisations at local
level. To this should be added the Dutch tradition of holding municipal elections on
the same day at four-year intervals; in the view of many scientific observers this
gives rise to a “nationalisation” of local election campaigns, in which it is the national
parties, far more than the personalities and problems directly concerning citizens,
which influence voting choices17. As a result, it is not surprising that purely local
16
See point 1.2 above.
17
Kraaykamp, G., van Dam, M., Toonen., T., (2001), 407
187
political movements are rare; they include the Frisia National Party (Fryske
Nasjonale Partij); some are linked to former colonial territories, such as the
independence parties of Aruba or the Antilles.
All the main Dutch parties have the traditional mass organisational structure, with
recruitment centrally controlled; each political movement is organised on a national
scale, particularly as a result of the representative electoral system with a block list
and a single constituency covering the entire national territory, adopted in 1918,
which has led the parties to adopt a centralised structure for better coordination of the
composition and list of candidacies at the various levels.
Moreover, the current electoral system directs a considerable part of the electors’
attention towards the party and the programme. This calls for strong coordination
among the various organisational levels in election campaigns, while it usually leaves
the individual characteristics of candidates in the background.18
The organisational structure common to all the parties has three levels, corresponding
more or less to the three levels of the administrative operators: local, provincial and
national. The local level of organisation (afdeling) is not only the basic element of the
structure, sending its own delegates to the higher levels; it is also the main party body
as regards municipal policies. This dual function places the afdeling under constant
pressure, since it obliges it both to manage questions of local interest and to discuss
matters concerning higher levels. There is, however, a tendency to concentrate
attention on local matters, especially on the part of the smaller bodies.
18
Katz, R.S., Mair, P. (1995a), 284 ; Katz, R.S., Mair, P. (1995b), 620
188
Another characteristic of the Dutch party system is the presence of the Party Council
(partijraad), which is in a sense a smaller version of the National Congress, but with
a completely different composition. While the National Congress is made up of
delegates of the local bodies, the Council is dominated by delegates from the
provincial organisations. The partijraad not only manages questions internal to the
party, but also plays an important political role in the Congress structure.
This centralism in the organisation of the provincial apparatus of the parties was
attenuated in the late 1960s and in the 1970s, when – probably also because of the
abolition of compulsory voting – most of the political organisations introduced, to
varying extents, programmes to decentralise their own structures with the aim of
ensuring more democracy in the internal decision-making process. However, the
local organisations did not take full advantage of the opportunity offered to them, and
from the 1990s onwards there was a general tendency to return to centralised
management of the inter-party decision-making procedure, partly as a reaction to the
discontent produced by the importance which the regional bodies have managed to
acquire in this respect, and because of the poor electoral results achieved in that
period by parties which had gone further towards internal decentralisation, such as
the Partij van de Arbeid (PvdA) (Labour Party) and the conservative Volkspartij voor
Vrijheid en Democratie (VVD) (People’s Party for Freedom and Democracy).
The range of Dutch parties includes party formations of a regional nature, such as the
Fryske Nasjonale Partij, and political movements reflecting the specific territorial
situation of former colonial possessions, as in the case of the independence parties of
Aruba and the Antilles, which do not, however, exercise much influence on national
politics.
189
As mentioned above19, management of local government in the Netherlands has over

the years been increasingly inspired by principles of cooperation among the various
parties involved, both at the institutional level and in relations with other social
organisations. We shall provide detailed descriptions of these in subsequent
chapters20; here we can point out the cooperation between provincial and municipal
institutions and private bodies (particularly through the increasing use of privatisation
to deliver public services at local level), associations such as trade unions, interest
groups, etc., and citizens directly, in an attempt – which does not seem to have been
very successful so far – to encourage direct popular participation in the subnational
political context.

LEVEL
A fairly recent analysis of the Dutch political-institutional situation at local level21

identified two specific coalition models at the head of local executives, especially in
the municipal context: the “community” model, based on bodies and candidates
strongly rooted in local conditions, and the “party” model, in which the relationships
between the political forces involved tend to reproduce the equilibrium found at
national level. In the first case it is possible to find local governments in which a clear
governing majority is matched by an equally recognisable opposition, while in the
19
See point I.3.
20
Chapters III and IV
21
Kuiper, W., Tops, P. (1989), 220
190
second case one finds the tendency towards association and consensus already
observed for some time at national level22.
The “community” or “majority” model is traditionally found in the local authorities

in the south of the country, where the Catholic People’s Party, traditionally very
strong in these areas, tends to put forward its own candidates only in the large cities,
thus making it possible for independent political figures to emerge in the smaller
centres. This shifts the attention of the electorate from the parties - often absent from
these elections - to the personal characteristics of the independent candidates, who
once elected form coalitions amongst themselves unrelated to traditional party links.
As stated, this system can be successful only in cases where the national parties do
not directly take part in local elections (this normally occurs only in a geographically
and politically defined area; in other cases the traditional “party” or associative model
applies, in which the composition of the local authorities seeks to be a faithful
reflection of the proportional distribution of votes among the parties involved in the
election).
There are a number of reasons why the associative model has also gained great
favour at local level: first and foremost, the institutional framework of local
authorities entrusts the greater part of decision-making powers to the municipal
executive, so that participation by a party means having a more or less large, but
nonetheless effective, share in the management of local affairs. In addition, the post
of mayor, decisive in terms of the local political direction, is external to the balance
of forces at municipal level, since the mayor is appointed by the national government:
the principal factor leading to the polarisation of the political forces involved is
therefore lacking, with all the consequences that entails. Secondly, the extent of the
22
Lijphart, A. (1988), 142, 171
191
powers granted to local executives is rather limited: this prevents party positions from
being highly politicised, creating favourable conditions for cooperation even among
political forces which are ideologically distant. Finally, the influence of national
positions on local elections, described above, means that assuming radical positions
could lead not only to exclusion from the municipal executive in the immediate
future, but also in the longer term to possible “ostracism” by the other political
forces, with a serious possibility of remaining excluded from decision-making centres
in the medium or long term.
All this explains both the persistence of the “associative” coalition model at local
level, rather than the “community” model, and the tendency to abandon the latter
model gradually in favour of the former at a time when, for example through the
aforementioned merging of local authorities to form larger municipal entities23, the
structural conditions which until then had made possible the emergence of local
political candidacies and groupings, instead of the traditional party spectrum, are
disappearing.
In terms of political participation, Dutch citizens show little interest in expressing

their own preferences in local elections: the average turnout in these cases is less than
half, in comparison with the turnout for national elections to renew the lower
chamber, which has never been lower than 73% in recent decades.
23
See paragraph I.2.1 above.
192
ELECTIONS TO THE LOWER CHAMBER24
Year Electors Turnout (%) Valid votes Non-valid
votes
1967 7,452,776 94.9 7,076,328 198,298
1971 8,048,726 79.1 6,364,719 46,567
1972 8,916,947 83.5 7,445,287 51,242
1977 9,506,318 88.0 8,365,829 48,217
1981 10,040,121 87.0 8,738,238 47,401
1982 10,216,627 81.0 8,273,631 37,115
1986 10,727,701 85.8 9,199,621 27,462
1989 11,112,189 80.3 8,919,787 26,485
1994 11,455,924 78.8 9,027,887 46,331
1998 11,755,132 73.3 8,622,222 14,435
2002 12,035,935 79.1 9,515,226 14,074
2003 12,076,711 80.0 9,666,602 12,127
Source: Central Statistical Bureau, Voorburg/Heerlen 27/10/2003
One reason for this can certainly be found in the “associative” model described
above, which does not make possible a clear distinction between majority and
opposition in a municipal context, and this does not even make it possible effectively
to assess the merits and demerits of the executives in power and the parties which
produce them. Such a scenario certainly does not tempt the citizen to take an active
part in local elections. The same effect is probably produced by the highly structured
and functional Dutch social state, which tends to deal with all problems which
individuals can encounter in social or economic terms, reducing citizens’ sense of
responsibility in their relations with municipal bodies, at any rate when specific
interests perceived particularly at local level are not involved. On the other hand, the
aforementioned plan to transfer powers from central government to provinces and
municipalities thereby starting a reverse process of giving greater responsibility to
24
In 1970 compulsory voting was abolished, and in 1972 the minimum voting age was
lowered from 21 to 18 years.
193
local institutions (and the political forces operating in them), could in the medium
term stimulate public interest in local elections, which has hitherto been rather low.
PARTICIPATION IN PROVINCIAL AND MUNICIPAL ELECTIONS
Year 1987 1991 1995 1999

Provincial 66.3% 52.3% 50.2% 45.6%
elections
Year 1986 1990 1994 1998
Municipal 73.2% 62.3% 65.3% 58.9%
elections
Source: Central Statistical Bureau, Voorburg/Heerlen
PARTICIPATION IN THE LAST 8 ELECTIONS – OVERALL PICTURE
Elections Participation (%)

National elections
2002 79.1
1998 73.3
Provincial elections
1999 45.6
1995 50.2
Municipal elections
2002 57.7
1998 58.9
European elections
1999 30.0
1994 35.7
Source : Dutch Ministry of the Interior
194
Although the Netherlands are one of the five countries in the world which have never
held a referendum at national level25, the debate on including direct democracy
provisions in the Dutch constitution has been going on for more than a century.
However, the constant mistrust of referenda and popular legislative initiatives,
especially on the part of conservative political forces, has led to a situation in which
by the end of the 1990s no more had been done than to appoint commissions of
experts periodically on the subject (as many as five in the 20th century). The
cautiously positive conclusions of these commissions were then systematically
disregarded by the government of the day.
In 1994, a national government containing no Christian Democrat parties and

characterised by the presence of the progressive D66 Party attempted to introduce
elements of direct democracy at national level, with varying results until on 1 January
2002 a “temporary law on referenda” entered into force which introduced the
referendum at national level, albeit not in a binding way. The subsequent centre-right
government, however, declared its intention to abolish this law – a plan put aside
temporarily following the tragic death of Pim Fortuyn. At all events, despite these
setbacks the institutions of direct democracy have enjoyed a certain success in the
Netherlands from the 1990s onwards, at least at municipal level, above all in terms of
the reorganisation of the municipal boundaries, on which the national parliament is
however competent to decide. Between 1991 and 2001, in the hope of checking the
drastic fall in participation in local elections26, 62 of the 537 municipalities
introduced forms of referendum to change existing legislative provisions, although
some topics on the political agenda (such as fiscal discipline, the budget, politicians’
25
Nijeboer A.
26
Neijens P., Minkman M., Slot J. (1998), 300
195
allowances and rules relating to “weak” social groups such as prostitutes or asylum
seekers) are excluded from this procedure. Moreover, in accordance with the old
Dutch tradition which regards direct democracy above all as a potential threat to the
representative system27, care was taken to maintain a veto power for municipal
councils, which are not legally bound by the results of the referenda.
However, leaving aside the actual effect of referenda on the political positions of
representative bodies, the tendency to use them fairly often at least in the local
context – particularly in metropolitan areas such as Amsterdam – constitutes an
innovation which is open to future development on the Dutch political scene; the
success of referenda, especially in the large cities, can in the view of some be
regarded as an indicator of interest, if not affection for, local politics. Moreover, a
recent law allows municipalities to hold consultative referenda as an instrument for
control by citizens of the operation of local institutions.
Many municipalities have introduced a programme of “interactive government”

designed to intensify the direct popular participation of citizens and other interested
parties (social organisations, enterprises, independent public commissions) in local
political activities. In some cases this also involves delegating decision-making
powers through contiguous structures and allocating a small budget to residents’
associations. The nature of participation in interactive government differs in at least
two ways: firstly, the aim of participation can vary, since in some cases it turns out to
have a simple consultative value vis-à-vis the executive or the municipal council, and
is therefore non-binding, while in other cases it is the politicians themselves who seek
in this way to influence local institutions more deeply. Secondly, the extent of
opening up to participation varies, since it can be limited to professionals from non-
profit organisations (already involved in the supply of local public services), to the
27
Van Holsteyn J. (1996), 128
196
public officials of other administrations or to independent public commissions, or
instead it can allow indiscriminate involvement of all citizens. Of course there are
cases of joint strategies to involve various players in local politics, but in general
participation is almost entirely by organisations of “political professionals” (non-
profit associations, public officials from quangos28 and from business), while
ordinary citizens do not seem particularly interested for the moment; this may,
however, depend on the need to identify forms of political participation which are
simpler and more accessible for the masses29.
In the absence of specific indicators on the subject, it is necessary to go back to the

analyses and elements which can indirectly provide a measure of the attachment and
interest of local populations towards institutions which administer the sub-national
communities to which they belong: in this sense, some observers have seen a
demonstration of interest and involvement of communities in local questions in the
increase in the number of referenda on questions of regional or municipal interest, in
the inclusion of volunteer workers and private individuals, not only in planning and
political development, but also in the supply of services, and in the adoption of highly
transparent administrative procedures through which citizens can assess more clearly
the work of their representatives.
On the other hand, the gradual process of incorporation of municipalities into larger
entities could have negative effects on the quality of the relationship between citizens
28
29
Denters B., Klok P.J., Visser M. (2002)
197
and municipal authorities, through the disaffection which this process could generate
among local populations30.
Articles 104 to 106 of the Netherlands constitution define the basic principles of the
economic constitution. These lay down that laws shall be used to regulate taxes and
other state levies, prepare the budget of public revenue and expenditure, establish the
rules for management of state finances and control the monetary system. Thus, from
an organisational viewpoint, the highest institutional authority for economic planning
is the national legislator, i.e. the joint action of the Netherlands government and
parliament.
Apart from what is laid down by national law31, other instruments for organising
relations between the central state and local authorities, particularly in an economic
context, are conventions (Akkoorden): the first convention, dating from 1987,
contained agreements on the principles and procedures for regulating relations
between the two levels of government, although from the legal viewpoint these acts
are not binding, but rather create moral obligations intended to reduce opportunistic
behaviour which would violate earlier reciprocal agreements. One problem derives
from the fact that the Association of Municipalities operates on behalf of about 500
30
31
198
members, without the authority to conclude agreements which are effectively binding
on all of them.
The most important provisions of the 1987 convention concern the principle of
proportionality in carrying out the programme of cuts in public expenditure at
national and local level, as well as the national government’s decentralisation
policies. The convention applying to the period 1999-2002 is innovative in many
ways, particularly because it seems to be based on the results obtained (so that the
funds granted imply the existence of measurable objectives and of periodic
monitoring of work carried out); it also provides for consultations twice a year
between the Prime Minister, the ministers and the main representatives of
associations of provinces and municipalities.
The effects of the conventions on the distribution of powers in relations between

centre and periphery are difficult to assess: on the one hand the most recent
conventions open up additional channels through which the national ministers can
influence local bodies and monitor their work through new instruments; on the other
hand they guarantee provincial and municipal authorities greater operational
discretionary power and additional sources of funds, as well as new means of access
to the central government.
The decentralisation process has also had consequences in economic terms: in the
areas in which local bodies have declared their willingness to take responsibility
(such as public building, educational services, social security and care of children and
young people), the transfer of powers has taken place only where municipalities have
at the same time accepted that public funding should cover less than 100% of the
199
expenditure on the services which are transferred to their control32. This has made
possible significant savings in state finances, which are under pressure because of the
urgent need to reduce public expenditure felt in all the Member States of the EU.
Turning to the economic organisation of sub-national bodies, each of the provinces

and municipalities in the Netherlands adopts its own budget. The Law on the
Provinces and the Law on the Municipalities regulate in much the same way the
economic planning of the local authorities. At the provincial and municipal levels
respectively, the provincial council and the municipal council constitute the highest
authorities in financial matters. Budgets are drawn up on the basis of the
recommendations made by the provincial and municipal executive bodies (defined
respectively as the Gedeputeerde Staten and the Mayor and senior municipal
councillors), elected by the local representative bodies from among their own
members. The provincial budget, once approved, has to be sent to the Minister of the
Interior by not later than 15 November of the year preceding the year of reference,
while the municipal budget has to be sent to the relevant provincial government
endowed with monitoring powers, also before 15 November.
The provincial and municipal councils commit themselves to balancing their own
budgets, at least in the long term; the expenditure headings inserted in the budget are
those regarded as necessary for provincial and municipal responsibilities and
activities, including incidental expenditure. Also to be included are obligatory
expenditure, such as the payment of interest or the repayment of loans negotiated
earlier and other debts, and expenditure laid down by law or involved in the enhanced
cooperation for implementing legislative provisions. Should such expenditure be
omitted, it will then be inserted by the authorities responsible for monitoring the
32
200
budgets33, which can also decree a corresponding reduction in incidental or non-
obligatory expenditure in cases where the amounts allocated do not cover essential
expenditure.
If the Minister of the Interior takes the view that a provincial budget is not balanced,
and will not become balanced in future years, he must explicitly approve that budget:
there can be the same requirement when the budget has not been submitted by the
agreed deadline or the statement of accounts has been presented late or shows a
deficit. The same rules apply to municipal budgets which, as stated above, have to be
approved by provincial executives. Approval can be refused only if the budget
appears to be contrary to the law or to the general economic interest. This procedure
has replaced the general approval of local authorities’ budgets, which was normally
given after an a posteriori check carried out by the relevant authorities.
The provincial and municipal budgets are binding on their respective executives;
hence the expenditure for a specific purpose cannot exceed the amount allocated for
the heading in question. Provincial and municipal governments are responsible for
the implementation of their budgets, while any expenditure based on a budget which
has not been approved requires the authorisation of the aforementioned supervisory
bodies, unless an exemption has been provided for (exemptions are possible only up
to a certain financial limit). It is possible to authorise urgent expenditure without
prior approval of the budget or its modifications, provided that the decision is
communicated immediately to the relevant monitoring authority. However, if the
budget or modified budget has not been approved, the provincial or municipal
councillors who have taken the decision on the urgent expenditure may be called
upon to justify it to the relevant local authority: so far, however, this has never
happened.
33
Warmelink H. G., 466
201
Expenditure by provincial and municipal authorities may derive from their own
responsibilities, like the financial activities necessary for carrying out their tasks, but
may also derive from obligations imposed on them by higher government authorities:
the distinction may be made between different forms of expenditure, e.g. obligatory
or non-obligatory, but may also have an influence on revenue.
The Financiële Verhoudingswet lays down that the provinces and the municipalities
should receive payments from the funds for provincial and municipal funding, which
are a separate heading of the national budget (Rijksbegroting), made up of amounts
allocated annually for this purpose. In 2002 the funds allocated amounted to more
than EUR one billion for the provinces and to EUR 12 billion for the municipalities –
showing that the greater part of the local authorities’ services are entrusted to the
municipalities. These funds are distributed by the provinces and municipalities
bearing in mind the likely revenue and the differences as regards the necessary
expenditure in individual cases: for this reason the law provides certain relevant
criteria for the distribution of these amounts.
General payments are made towards local public financial departments, which can
then use them as they see fit. If a municipal authority’s own revenue reaches an
acceptable level, but its public finances do not manage to satisfy the basic needs of its
community, it is possible to authorise and guarantee additional funding, but normally
with further conditions placed upon the authorities concerned, such as wide-ranging
precautionary monitoring by the Ministry of the Interior – the body which
administers the municipal finances fund. Combined with the precautionary
monitoring by the relevant municipal councillors – laid down in the Law on
Municipalities – the general conditions for the granting of additional subsidies can
considerably restrict the autonomy of the municipal authority: this helps to explain
202
why the number of municipalities requesting additional funding has fallen from 20 to
5 in the last 10 years34.
From local funds, payments can be made on a temporary basis also to the public
finances of provinces and municipalities. In addition, it is possible to cover specific
provincial or municipal costs, normally in relation to agreements drawn up by higher
administrative levels but which have to be implemented by the provincial and
municipal levels, which consequently have rather limited decision-making powers in
the use of these resources.
Moreover, the provinces and municipalities have limited own resources, divided
between those derived from taxes and duties and those derived from other forms of
taxation. Apart from the taxes listed by the Law on the Provinces and the Law on the
Municipalities, local authorities cannot impose any others at local level, unless other
laws specifically provide for this. The provincial and municipal councils, which are
also responsible for the local budget, decide through an ordinance and within the
deadlines laid down by the law what is to be taxed and the nature and rates of the tax.
In 2002, 37% of the revenue of municipal authorities was derived from payments
made from state funds (the proportion of the total funding of local authorities has
been rising constantly since 1986), 46% from other forms of payment, and the
remaining 17% from local taxes35. For the provincial level the distribution of the
various types of funding is 35% from provincial funds, 38% from specific payments
and 27% from local taxes. In this case, too, both the payments derived from funds
allocated to the provinces and the specific payments have gradually increased in the
last few years.
34
Warmelink H.G., 467, note 14
35
Warmelink H.G., 467
203
The provinces and municipalities transmit their decisions on the securing or granting
of loans and on the guarantees provided for them to the supervising minister and the
provincial councillors respectively; their approval is no longer an obligatory
condition, so that the local authorities have become gradually more autonomous in
this sector also. However, some examples of financial failure of local authorities
(such as the province of Zuid-Holland, dragged into an administrative crisis in 1999
by the bankruptcy of the private company Meteco, to which the provincial authority
had granted a substantial loan, or the city of Rotterdam, whose financial management
by former mayors and councillors was strongly criticised recently) have shown how
such freedom may have been granted without the necessary guarantees: consequently,
amendments to the Law on the Municipalities have been proposed in order to
introduce various measures to improve the quality of monitoring of local finances, for
example by setting up auditing offices at local level.
One characteristic of the Netherlands’ local government system is the presence of a

municipal bank, run by a board appointed by the central and municipal governments,
with the task of providing funds on competitive terms to support the initiatives of the
local government through municipal finance funds. This confers great stability on the
funding of local projects, since the finance fund increases or decreases by the same
percentage as the municipal budgets.

the unions
In the context of the general cooperation between public and private sectors, it is
worth giving special mention to quangos, which are private entrepreneurial bodies
providing public services on the basis of contracts concluded with the responsible
204
public authorities36. Among the various categories of qangos, the best known in the
Netherlands is that of former public enterprises which have now been privatised, such
as the post-office bank, the telephone company or the state mines. More popular are
the “semi-privatisations” (or true quangos, according to some), which Dutch
politicians describe as having been “autonomised” rather than really privatised; this
has led to the rapid creation of agencies (agentschappen) and independent
administrative authorities (Zelfstandige bestuursorganen, Zbo).
From 1994 onwards the central administrations transferred more and more tasks to
private agencies: however, although the contracts lay down the operational relations
between the Dutch agencies and the public departments concerned, ministerial
responsibility for the sector is maintained, and constitutionally the agency remains
part of the department. It is a different matter for the independent administrative
authorities, which enjoy much greater autonomy and for which ministerial
responsibility is much more limited. Examples are the work distribution service, the
public universities, childcare centres, chambers of commerce, art councils, companies
providing student loans, and bodies which analyse food and agricultural products.
Although the Zbo were being set up throughout the 20th century, many of them were
formed in the 1980s. In 1995 the Dutch Court of Auditors published research on the
Zbo which showed that they had a low level of responsibility in relation to the
services provided. This gave rise to a wide-ranging debate, leading to pressure for a
return to administrative management led by elected politicians rather than bodies
independent of the public administration. Subsequent rules therefore laid down clear
conditions for setting up a new quango in a specific sector and the type of
responsibility it should have.
36
The United Kingdom Parliament, Select Committee on Public Administration Memoranda,
Memorandum 43
205
With regard to the Structural Funds, at the European Council in Berlin on 24/25 May
1999 the heads of state and government of the EU reached a political agreement on
Agenda 2000, which forms the basis for the Community’s action in the 2000-2006
period37. The agreement provides for more efficient use of the Structural Funds,
concentrating assistance even more on specific geographical areas and political-
economic aspects. The sector was granted an overall budget for the period of EUR
195 billion: of this, EUR 3,286 million have been allocated to the Netherlands (as
against EUR 2,654 million in 1994/1999, representing an annual increase of 6%).
Priority objectives
The overall budget available for projects covered by the four Structural Funds38 is
divided into three priority objectives.
Objective 1: regions most lagging behind in development
This promotes the structural development and improvement of less developed

regions, and only regions whose GDP is less than 75% of the European average can
make use of it. In the Netherlands the Province of Flevoland (277,000 inhabitants)
lost on 1 January 2000 the status of Objective 1 region which it had from 1994-1999,
37
The following data are based on a report by the European Union dated December 2002 and
available at the following address:
http://europa.eu.int/comm/regional_policy/country/overmap/nl/nld_en.htm.
38
The European Regional Development Fund (ERDF), the European Social Fund (ESF), the
European Agricultural Guidance and Guarantee Fund (EAGGF) and the Financial
Instrument for Fisheries Guidance (FIFG)
206
because its GDP had risen above the threshold laid down. However, the region will
be entitled to transitional aid of EUR 123 million up to 2005 (equivalent to EUR 126
million at current prices). In 1994 to 1999 the Netherlands obtained a total of EUR
163 million in Objective 1 aid.
Objective 2: regions facing structural difficulties
Objective 2 (which replaces objectives 2 and 5(b) for the 1994-1999 period) supports
economic and social restructuring of areas which encounter structural problems. In
2000-2006 four types of areas with such problems were identified: industrial, rural,
urban and areas dependent on fishing activities. On 1 June 1999 the European
Commission laid down for each state the maximum population for a region eligible
for Objective 2 funds: for the Netherlands the limit was set at 2.333 million
inhabitants, equivalent to 15% of its total population. This is the only criterion for the
allocation of Objective 2 resources among the Member States: in other words, every
inhabitant of an area eligible for this type of subsidy will account for per capita
funding of EUR 41.4 (1999 prices).
The Netherlands received EUR 795 million in this context, sub-divided into EUR 676
million for Objective 2 areas and EUR 119 million for transitionally assisted areas
(these areas were eligible for Objective 2 and 5 (b) funds in 1994-1999, but are not
eligible for the new Objective 2).
Objective 3: education, training and employment
This supports the adaptation and modernisation of education, training and

employment policies, combining the old Objectives 3 and 4, and is closely linked
with the new title on employment in the EC Treaty as amended by the Treaty of
Amsterdam. Objective 3 does not operate through classification of areas, so the aid
207
can be used for financing projects throughout the whole Community except in
regions coming under Objective 1. In 2000-2006 the funding under Objective 3
allocated to the Netherlands comes to EUR 1,686 million, as against
EUR 1,176 million in 1994-1999.
Fisheries
The Financial Instrument for Fisheries Guidance (FIFG) funds measures concerning
common fisheries policies. In Objective 1 regions, funds allocated through the FIFG
are linked to the other subsidies granted for funding regional development projects.
For the 2000-2006 period the Netherlands receive EUR 31 million for this sector.
Community initiatives
On the basis of the three priority objectives, the Structural Funds also provide
funding in the new period, through four different community initiatives, whose
overall budget for the Netherlands in 2000-2006 amounts to EUR 651 million:
Interreg: promotes cross-frontier, trans-national and inter-regional cooperation, with

the aim of stimulating balanced development and territorial planning in a European
context (EUR 349 million);
Urban: funds the economic and social recovery of cities with serious structural
problems, to promote sustainable urban development (EUR 196 million);
Leader: supports rural development (EUR 78 million);
Equal: finances trans-national cooperation to promote new practices guaranteeing full

equality of opportunity in access to the labour market (EUR 28 million).
208
Agricultural development policy
Finally, although strictly speaking it is not structural assistance, the Netherlands

receive some funding for agricultural development from the guidance section of the
EAGGF. Since the Berlin agreement of March 1999 identified agricultural
development as a key element of the common agricultural policy (CAP), the guidance
section of the EAGGF will in future support four measures to be carried out within
the Community, together with another six applicable to regions which do not qualify
for Objective 1 funding. With this approach, assistance to agricultural development is
not linked to specific regions. The annual budget for agricultural development
allocated to the Netherlands is EUR 55 million, equivalent to 1.3% of the Community
funding available for this sector.

OF PUBLIC SERVICES

of public services
The gradual process of decentralisation has also involved the management of public
services, in which the provinces and municipalities play an increasingly important
role, with a considerable degree of autonomy compared to the past. Apart from
specific measures in the various areas of their responsibility, the provinces have the
possibility to coordinate cooperation projects between local authorities at various
levels, going beyond the specific municipal context, and in some cases (e.g. in town
and country planning or management of municipal finances) also carrying out
monitoring tasks on the work of individual local authorities involved in such projects:
209
this, however, is a power which the provinces exercise only rarely, in comparison
with the reciprocal consultation and cooperation with the municipalities which takes
place much more frequently.
The action of public administration on the territory concerned is sub-divided into five
main sectors: social policies, employment, vocational training, environmental
protection, transport and mobility. In each of these sectors the provinces and
municipalities have precise roles and tasks, details of which are set out below for
each sector.
Social policies
Measures in this sector are intended to benefit specific groups of citizens and
individuals (workers with little vocational training, the long-term unemployed,
immigrants), who are helped through wage supplements, publicly subsidised jobs and
job opportunities created in the public sector. In addition to these collective
programmes, there are measures to rehabilitate individuals who are unable to work
and to remove barriers preventing the disabled from participating in the labour
market. Finally, there is a system of social policies made up of minimum social
security contributions (obligatory and private health insurance schemes),
unemployment benefits (to which are added measures for reinsertion into the labour
market), insurance for those unable to work, basic pension insurance schemes and
family benefits.
The provinces take action in various ways: managing social care at regional level,
caring for the mentally handicapped, administering old people’s homes and assisting
young people and youth employment. The municipalities play a more complex role,
including the detailed management of social policies, the administration of social
services, and social care tasks in the context of state regulation of the sector; they also
210
manage health care services and assistance to the disabled, assistance to older people,
children and young people, and social housing.
Employment
Although the Dutch economy has shown an essentially positive trend in recent years,
certain problems remain: hidden unemployment, which is not visible from the official
sectoral statistics, and long-term unemployment, which applies to about half of the
unemployed. Given that most of the unemployed do not have sufficient education or
training, public action in this field must necessarily provide for integrated cross-
sectoral measures in which the local authorities play a very important role.
In this field the provinces perform the function of employment agencies, which put
employers in touch with workers in the territory they cover, while the municipalities
allocate unemployment benefits and develop programmes to create jobs locally. In
addition, the municipal administrations develop their own integration programmes for
people receiving unemployment benefit.
Vocational training
The Dutch educational system combines a national organisation regulated by state

rules with a decentralised administration of educational establishments: for this
reason local authorities are called upon to perform very complex functions. First and
foremost, the provinces act as centres for vocational training at regional level; in
addition, they provide services for adult education at basic and higher levels and
apprenticeship services, manage the local coordination of training carried out outside
official educational structures, look after vocational training programmes for young
people and adults, and perform a consultative function on the coordination of the
current work of reorganising vocational training. The municipalities have a general
211
responsibility at local level for vocational training and publicly run schools,
particularly on the administrative side.
Environmental protection
Protection of the environment in the Netherlands has undergone radical change as a

result of the first national environmental programme (also known as “Ecological
plan”), started in 1989, whose implementation depends primarily on close
cooperation between the central administration and the local authorities for the areas
of their responsibility; the task of providing many services in this sector is delegated
to them. There is also the fact that, because of the relatively small size and the nature
of their territory, and their sensitivity to pollution at regional and global levels, the
Netherlands take a very active part in international cooperation on environmental
protection. The provinces operate primarily as bodies called upon to implement at
regional level the environmental policy measures adopted nationally, although from
the 1990s onwards they have gradually taken on a role which is not only executive
but also initiatory, firstly through the programme which each regional authority
issues annually, laying down the guidelines for inter-regional cooperation
programmes in the environmental field. Among the responsibilities directly conferred
on the provinces are those for action against the spread of acid rain and polluting
substances, combating the reduction in water resources, waste collection measures
and energy-saving programmes. Moreover, the provinces guide regional and urban
planning in the environmental sphere, soil protection and improvement measures and
supervision of water resources, monitor the work of the municipalities in the aspects
of the sector which they cover, and provide the necessary authorisations for large
industrial establishments, taking account of their environmental impact. Within the
areas of their responsibility, the municipalities perform essentially the same functions
as the provinces and according to the same priorities; in addition they have the tasks
of urban and land-use planning, management of waste collection services, monitoring
212
of water resources at local level, management of recycling programmes, and
preventing or punishing actions which damage the environment.
Transport and mobility
The essence of Dutch transport policy lies in the interdependence of regional

development, economic policies, planning and regional mobility. Improving mobility
(not only on roads, but also by rail and sea) is one of the conditions which the
government is trying to establish in order to attract international investment to the
country. The provinces manage regional traffic, public transport, regional planning,
and the construction and maintenance of provincial roads. The municipalities are
responsible for the construction and maintenance of local roads, public transport at
municipal level and urban planning.
We have seen how, within the general system of devolution, the provinces are called
upon to act as training centres at regional level: the recent reorganisation of these
centres into learning structures in a wider sense also involves considerable
participation by private bodies, which thus cooperate with public administrations in
providing this service.
Going beyond the new set of rules for local government39, at all events, the debate on
the subject has certainly not been exhausted, but has rather encouraged a very wide
range of studies on ways of organising the sector in the near future. Starting from the
principle that the national government should “hold the rudder rather than row”40,
39
See point I.1. above.
40
Osborne D., Gaebler T. (1992), 25-48
213
there are many who agree on leaving it to the central administration to define which
goods and services correspond to the needs of citizens, while the local authorities,
especially the municipal authorities, would be called upon to “row”, operating with
integrated strategies and through an organisational structure streamlined to facilitate
their operation, and encouraging the use of prioritisation and contracting-out for the
provision of the services for which they are responsible41. Three alternative models of
organisation of the functions performed by local authorities have been developed in
this context; they are applied in various cases and sectors of local administration.
The municipalities transfer the production and provision of services to non-profit

organisations. One variant of this model involves the municipalities directly in setting
up the new non-profit organisation very close to local government to manage the
services in question. This structure is applied in areas such as cultural policy, sporting
and educational establishments, and involves the granting of subsidies as the main
instrument for guiding the work of the municipal institutions.
Many goods and services are negotiated with private entrepreneurs or through
production organisations, involving the joint participation of several local authorities.
This strategy has proved to be effective for the production of goods and services
which can easily be provided also by private companies, as in the case of waste
collection, maintenance of streets and parks, etc. In some cases the municipalities
have also replaced former public agencies with new private enterprises, of which they
manage part of the assets or in which they are represented in the board of
management, giving rise to a sort of partial “municipalisation”.
The municipalities are introducing a form of contract management to run local

administrative agencies.
41
See section IV, below.
214
It is the first two models which have been applied most often, but in the last two
decades the Dutch municipal authorities have made increasing use of various forms
of production and provision of goods and services. In many cases the transfer of
functions and powers to the private sector, the non-profit sector or public
organisations is accompanied by “contracts” specifying the nature of the services to
be provided, and a system for assessing the quality of those services and for
monitoring continuing compliance with the conditions laid down in the contract. The
use of performance-based management is thus not only an instrument for creating
new relationships between central and local government, but is also typical, for
example, of relations between local politicians and administrative agencies and
between local government and non-profit organisations to which funds are allocated.
Many municipal authorities have also attempted to use group analyses and consumer
surveys to gain a better idea of the preferences of the users of the services provided,
while some municipalities are experimenting with “citizen’s rights cards” for the
services under their control, with the aim of strengthening the position of users of
public services provided at local level.
The possibility of negotiating with private legal persons for the supply of certain
services (through the contracting-out instrument) reflects the widely held belief in the
Netherlands that it can be desirable to manage the provision of public services
according to entrepreneurial criteria: the choice is left to the relevant individual
institutional authorities, while higher levels of government confine themselves to
establishing the tasks to be carried out and the levels of service to be guaranteed. This
managerial autonomy is another aspect of decentralisation: alongside the
decentralised administration of services entrusted to the municipalities, it creates the
possibility of managerial decentralisation within the municipality itself. This implies
reducing the role played by the political leadership: once the objectives and political
strategies have been determined, those responsible (the managers) deal with the
215
practical management of the service. Under these conditions, the private sector can be
involved in the supply of a service on the basis of a proper contract negotiated within
the relevant local authority.
There are many cases of a managerial approach to public services in Dutch local
government: in the city of Tilburg, for example, the elected politicians retain
responsibility for the political direction to be followed, but once the political choices
have been made the service managers have considerable operational freedom in
implementing them, with the aim of maximum efficiency. This negotiated
management represents a shift from a hierarchical form of organisation to one based
on an operational network, from a bureaucratic structure to one based on profit
centres, with managerial decentralisation and the possibility of requiring
accountability on the part of service managers, and of ensuring some return for the
administration. The Tilburg system seeks to ensure that profit centres are also open to
competition from private legal persons, which can include both the voluntary (non-
profit) sector and private companies, with the municipal council committed only to
negotiating with those concerned for the supply of services on the basis of agreed
objectives and entrepreneurial plans.
On the other hand, it should also be pointed out that not all municipalities have
chosen the same strategy as Tilburg. From 1984 to 1988, for example, the city of
Delft adopted the same tactic as Tilburg on the provision of public services, but
regularly monitored users’ assessments of the quality of services received and then
used these data to improve their quality. The city of Capelle aan den Ijssel followed a
similar path, decentralising certain functions to restructured service departments.
216

and results)
The Netherlands are undoubtedly among the European states with the most
widespread use of ICT: while in 1995 19% of the Dutch population declared an
interest in information technology, five years later there were 35 PCs for every 100
inhabitants (17 in the commercial sector and 18 in private dwellings), while more
than 6 million citizens – equivalent to 39 per 100 as against 23 in the United
Kingdom and 20 in Germany – regularly made use of the internet42.
The 2002 data confirm this trend: with 65.5% of private dwellings connected to the
internet (as against the European average of 40.4%) and 3% of users having a
broadband connection (European Community average 1%), the Netherlands are
leading in the spread of ICT for private use. In the entrepreneurial sector, too, the use
of ICT is now an established reality: 79% of Dutch firms have access to the internet
(as against a European average of 68%, but well below that of the Scandinavian
countries, which with a figure of more than 89% clearly lead this specific category).
Thus the Netherlands have a leading position also in on-line business43.
It is also becoming possible to perceive the impact which this wide dissemination of
the new media can have on political initiatives, above all at local level. For the Dutch
authorities eGovernment constitutes a very high priority among projects for the near
future, and arouses enormous interest also for local government: the projects,
42
Padovani C., Nesti, G., (2003), 217-218.
43
Centraal Bureau voor de Statistiek (2003), 44-46, 58-59
217
coordinated and drawn up at central level, are received with enthusiasm also by
provincial and municipal authorities. One example of this is the city of Alphen aan
den Rijn, whose municipal offices are completely computerised and provide 24-hour
on-line services44.

Technologically very advanced, the Netherlands have long devoted much attention to
the procedural and practical aspects of electronic voting, with many studies on the
subject which have identified certain basic principles on the matter45, such as
ensuring that the result of voting is correct (i.e. that only electors entitled to vote do
so, and only once, and that all the votes cast are counted only once), that the ballot is
secret, so that no-one is able to link the vote with the elector who cast it (to avert the
risk of a vote being imposed on someone via a third party), and that no elector can
prove how he has voted (to avoid the risk of buying and selling of votes), and that the
results can be verified by those concerned.
At present the Dutch authorities are studying various ways of casting electronic votes,
both in polling stations (using special voting machines or programmed PCs), and
through the so-called “distance vote” or “network vote” (via internet or through
specific telephone links), which may be trialled in the forthcoming European
elections. Reasons mentioned for preferring the use of special machines or PCs for
voting in the place of the traditional ballot boxes include efficiency in the polling
station, reducing election costs and obtaining the results of voting more rapidly.
Among the disadvantages mentioned are the fact that the elector cannot check
44
See the websites www.alphenaandenrijn.nl and www.alphen.com
45
Pieters (2003)
218
whether his or her vote has been registered correctly and the fact that results are not
verifiable without knowing the software and hardware used in the specific case.
Use of the PC in itself has advantages and disadvantages: the former include ease of
use, the option of holding the vote in several stages (e.g. first choosing among the
parties, and then among the candidates of the lists elected), no limit on the number of
parties and elections, and a modern look. The disadvantages are: the delicate
functioning of the computers which can easily cause breakdowns, and the need for
considerable technical work to set up telematic polling stations.
Although the issue of electronic voting has only recently come to the fore, Dutch
legislation on electronic voting already has a fairly complex history, with the
approval of the first legislative rules on the matter going back to 1989. In 1997 two
provisions were issued first of all: a decree introducing the two-stage vote (the first to
choose a party, the second to choose a candidate) and the option of using the same
procedure for two types of vote at the same time when necessary (e.g. parliamentary
election and referendum, or provincial and municipal elections); and rules on the
conditions for the vote to be valid, intended to liberalise the market for suppliers of
the technology needed for electronic voting. However, on 22 July 1997 the TNO
Centre (the Dutch organisation for applied scientific research) was set up to assess
instrumental and security technology; this essentially re-confirmed the central role of
the state in providing technological licences for electoral equipment. However, the
government still had the option of drawing on other companies, thus encouraging
competition in the sector. On 3 June 1998 the electoral council proposed setting up a
sub-committee for computerising the elections, and on 28 May 1999 a report on
computerisation of voting drawn up by an expert group in cooperation with the
electoral council proposed that legal questions relating to the calculation of votes be
examined; on 1 September 1999 the report on the development of the rules on
219
electoral procedures drawn up by the Ministry of the Interior fully adopted the report
drawn up by the electoral council's sub-committee.
In 2000 the Ministry of the Interior launched an electronic voting project which
investigates the possibility of freeing voting procedures from rigid geographical areas
and giving citizens more opportunity to express their electoral preferences, in
accordance with the objective of using digital technology to make the public sector
more efficient and practical for users. The electronic vote is not new to the
Netherlands: since 1974 traditional equipment for voting has gradually been replaced
by electronic equipment, and, in the last political elections of May 2002, 95% of
Dutch municipalities were equipped with electronic instruments for voting, while in
some polling stations it was also possible to vote by computer.
The electronic voting project was to carry out two experiments in the European
elections of June 2004, intended to ascertain the practicability of postal voting46,
computer voting or telephone voting for Dutch citizens resident abroad, and of voting
in any of the polling stations in their municipality for those resident in the
Netherlands, with the aim of making the act of voting independent of a specific
geographical area. Before electronic voting is introduced, however, it will be
necessary to introduce an electronic identity card as part of a wider system consisting
of an electronic signature and the possibility of using biometric personal data (Dutch
Ministry of the Interior, 2003). In addition, studies are being made of systems for
cooperation between the ICT networks of state and local authorities, such as Back-
46
The 20,000 Dutch citizens currently resident abroad who can already vote by post constitute
an ideal group for testing distance voting and electronic voting projects, although it is
admitted that postal voting cannot give the elector as much freedom of choice as voting in
an electoral booth. However, it is expected that the introduction of distance voting and
electronic voting could encourage more participation by electors resident abroad than would
occur with postal voting.
220
office, which could prove to be particularly useful for identifying citizens in the
context of eGovernment47.
Thanks to the widespread ownership of ICT equipment among the general public,
there seems to be a growing interest in the use of local networks, especially for
electronic communication, but for the moment there are no significant data on this.
Because of the high level of dissemination of ICT in the public sector and among
private individuals48, most Dutch public offices also provide for ICT access to their
services.
Among the most innovative examples of ICT applications to public services is Back-
office49: this is above all an operational methodology, regarded as the backbone of
eGovernment, and made up of a network of organisations whose objectives do not
necessarily coincide and whose interests may even clash. One application of this
methodology was started some time ago by the Dutch public administration in large-
scale sectors (such as building, social security and employment), linking
organisations which tend to be independent of one another, and each of which tends
to collect data independently on citizens and enterprises for sectors which concern it,
with all the attendant problems of duplication and inconsistency of the filed
information. On the other hand, it is assumed that a transaction carried out through
eGovernment could be more efficient and reliable if the data used by the
organisations involved are as uniform as possible: thus an effort is being made,
47
See point IV.1.c.
48
See section V.
49
Homburg V., Bekkers V.
221
following the "principle of authentic registration", to collect the data for a public
transaction as close as possible to their source – something which ought to make
them easier to obtain and more reliable; they would then be communicated to the
other public institutions which may need them, thus making more uniform the file
held on a citizen or a firm by the various branches of the public administration.
Practical applications of this operating method already exist, such as the municipal
register of information on residence, the lists of licence holders or motor vehicle
registrations, the data on polluting emissions or those on citizens' tax status: when
someone asks the public administration for an authorization or a permit, his past
record is checked by comparing the data on him held by various organisations. When
a request is made for unemployment benefit, for example, checks will be made on the
data relating to the requester's address, the labour agency responsible for issuing the
authorisation, the institutions responsible for implementing employment programmes
to verify his employment record, etc.
222
BIBLIOGRAPHY
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Publications, London, Thousand Oaks, New Delhi
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politica in Europa, ed. Colomer, J.M., Laterza, Bari, pp. 351-419
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Participation: The Effects of Municipal Amalgamation on Local Electoral Turnout in
the Netherlands, in “Acta Politica” 2001/4, pp. 402-418
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Lijphart, A. (1988), Le democrazie contemporanee, Il Mulino, Bologna
Netherlands Ministry of the Interior (2000), Brochure “Urban Policy”
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on-line at: www.minbzk.nl
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Campaigns: A Study of the Amsterdam Referendums, in “Acta Politica” 3/1998, pp.
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Nijeboer, A., Direct Democracy in the Netherlands, at
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società dell’informazione, in Sistemi locali e spazio europeo, ed. Messina, P.,
Carocci, Roma, pp. 207-227
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http://www.nii.kun.nl/∼wolterp/voting/contents.html
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461-471, at http://law.kub.nl/ejcl/64/art64-26.html.
225
USEFUL LINKS
Royal House http://www.koninklijkhuis.nl/welkom.html

Parliament www.parlement.nl
First Chamber http://www.eerstekamer.nl
Second Chamber http://www.tweede-kamer.nl/
Government http://www.minaz.nl/english/index.html
Governor of Netherlands Antilles http://www.curacao-gov.an/
Governor of Aruba http://www.arubahuis.nl/
Web-pages of regional/local parties
Frisian National Party http://www.fnp-fryslan.nl/
People's Electoral Movement http://www.mep.aw/
Movement for a New Antilles http://www.partidoman.com/
Central Statistics Office http://www.cbs.nl/en/
Web-pages of regional/local institutions
Province of Drenthe http://www.drenthe.nl/
Province of Flevoland http://www.flevoland.nl/
Province of Gelderland http://www.gelderland.nl/
Province of Groningen http://www.groningen.nl/
Province of Limburg http://www.limburg.nl/
Province of North Brabant http://www.brabant.nl/
Province of North Holland http://www.noord-holland.nl/
Province of Overijssel http://www.prv-overijssel.nl/
Province of Utrecht http://www.prvutr.nl/
Province of Sealand http://www.zeeland.nl/
Municipalities
Municipality of Amsterdam http://www.amsterdam.nl/
Elections
General information http://www.parties-and-elections.de/netherlands.html
Provincial and local information http://www.stembusuitslag.com/
Referendum http://www.referendumplatform.nl/talen/english.htm
Ministry of Economic Affairs http://www.minez.nl/
Ministry of Social Affairs and Employment http://www.minszw.nl/
Central Planning Office http://www.cpb.nl/
Trade and economic activities on-line www.emarketservices.nl
www.ecp.nl
Regional sites on research and innovation
Northern Netherlands http://www.cordis.lu/north-holland/home.html
Southern Netherlands http://www.cordis.lu/south-holland/home.html
Randstad http://www.cordis.lu/randstad-region/home.html
Utrecht http://www.cordis.lu/utrecht/home.html
Ministry of Public Health, Welfare and Sport http://www.minvws.nl/
Social and Cultural Planning Office http://www.scp.nl/
ICTU – Dutch organisation for ICT and http://www.ictu.nl/profile.html
Government
Public Counter 2000 – Information on ICT http://www.ol2000.nl
for public and private sectors
Site on political initiatives at various levels http://www.publiek-politiek.nl/
226
PORTUGAL
INTRODUCTION
The asymmetric nature of Portuguese regionalism is due to the fact that there are two
island regions (the archipelago of the Azores and the island of Madeira) with
statutory and legislative autonomy conferred on them by the constitution, and a
constitutional model of regionalism for the mainland (administrative regions) which
has never been implemented in practice.
After the 1998 consultative referendum rejected the setting-up of administrative

regions, the process of regionalising the mainland came to an abrupt halt: the reform
process of the past three years has therefore focused on regional planning bodies and
the way local authorities are organised.
The reform project has sought, in particular, to revamp the bodies dealing with
regional economic development: in 2003, the former regional coordinating
commissions were converted into what are now Regional Coordination and
Development Commissions (Comissões de Coordenação e Desenvolvimento
Regional - CCDR). The purpose of the reform was to make the CCDR representative
of the relevant local and regional authorities; in practice, however, they appear still to
be very much under the authority of central government.
As regards local authorities (municipalities and parishes), the laws on local-authority

bodies have been substantially amended in the last three years and a radical reform of
the metropolitan areas has been approved.
227
Dialogue and relations between local authorities and central government appear to be
increasingly badly affected by the recent cuts in budgetary funding for local
authorities.
The prospect of mainland Portugal being regionalised does not seem at present to be
tied to any emerging political movement focusing exclusively on a regionalisation
programme. There is a clear division between the north and the south of the country
when it comes to the dissemination of the culture of regionalism on the mainland: the
industrial north appears to be much closer and more open to the concept of regional
bodies whereas the south is still attached to the centralist model.
Economic development in Portugal continues to be closely bound up with

Community cohesion policy: the Structural Funds play a decisive role in the
development of infrastructure and in environmental protection. This is confirmed by
the European Commission’s recent adoption of an Accessibility and Transport
Operational Programme as part of the Community Support Framework for Portugal
for the 2000-2006 period, which provides for investment to the tune of
EUR 3,366.8 million.
As regards domestic economic policy strands, the privatisation process launched

during the second half of the 1990s spawned large numbers of regulatory bodies
operating in liberalised economic sectors, some of which have close links with central
government. Significant legislative constraints also continue to be imposed on the
participation of private enterprise in local public service management.
The radical transformation of Portuguese society began in the 1960s, but statistics
and social studies reveal a country which is still attached to traditions although it is
also constantly developing. In particular, the current trend towards a labour market
which includes an increasing number of highly specialised women, the diminishing
228
influence of Roman Catholic culture on life choices and the ongoing dialogue
between Catholicism and other growing religious cultures (other Christian
denominations and animist religions) are stimulating Portuguese society to adopt the
same models and standards as other European countries. The constantly developing
society is reliant on public services which have substantial shortcomings (particularly
in the health sector) largely due to the fact that they are considerably less
computerised than elsewhere in Europe. The launch of the process of computerising
the public administration planned in 2003 by the government-sponsored Innovation
and Knowledge Mission Unit (UMIC), could be decisive in this regard: in this
project, improving the quality of public services is part of a wider initiative to
modernise the public administration at both central and local level.
The project and the management of eGovernment initiatives by UMIC appear to be

highly centralised, but while the initiative and the project have, without a doubt, been
promoted and designed by the government, one of the main elements of the
eGovernment action plan is the computerisation of local administrations in order to
ensure more effective decentralised management of public services, in accordance
with the principles of decentralisation and subsidiarity, which are also pillars of the
constitutional organisation of regional and local authorities.
229
I. THE EVOLUTION OF FEDERAL/REGIONAL DYNAMICS.

profile
Twentieth-century Portuguese constitutional history is characterised by a succession

of liberal-democratic parliamentary systems and military coups resulting in a long
authoritarian regime, and a return to democracy with the period of the revolution.
The First Portuguese Republic (1910-1926) came to an end in 1926 with a coup
d’état which established an authoritarian, corporatist regime led by António de
Oliveira Salazar, who became prime minister in 1932.
The totalitarian system of what was termed the New State (Estado Novo) came to an
end with the 1974 revolution, triggered by the coup d’état of 25 April 1974 organised
by the Armed Forces Movement (FMA).
In April 1975, the six largest parties represented in the MFA signed a constitutional
pact which provided for the election of a Constituent Assembly. The Assembly was
elected on 25 April 1975 and the moderate political groupings in the MFA gained a
considerable advantage: in November 1975 an attempted coup d’état by the most
radical military forces was crushed and those elements of the MFA’s leadership were
removed. In February 1976, the constitutional pact between the MFA and the
political parties was renegotiated. The pact provided for the institutionalisation of the
revolutionary council which, as guardian of the “spirit” of the revolution, was
responsible for supervising the military forces and monitoring the constitutional
nature of the law (through its constitutional committee).
230
The Portuguese constitution was promulgated on 2 April 1976, with the stipulation
that it could not be revised during the first five years.
In April 1976, the elections for the national parliament (Assembly of the Republic)
were held, in which the moderate political groupings dominated, and on 27 June
1976, General Antonio Ramalho Eanes was elected the first President of the
Republic1.
The framework defined by the 1976 constitution (CRP) has produced a dual
presidential-parliamentary system, in which the central position of the parliamentary
institutions is flanked by the government's dual accountability to the single-chamber
parliament (the Assembly of the Republic) and to the President of the Republic, who
is directly elected by the people (Articles 190-191 of the CRP). The prime minister is
the effective head of government; in relations between the executive and the
president, the prime minister therefore has decision-making autonomy. The
interdependence between the government and the parliament rests on the request for a
vote of confidence which the government may make for approval of its general
programme (Article 192 of the CRP) and matters of general policy (Article 193 of the
CRP), and on the motions of censure which can be tabled by the members of
parliament or parliamentary groups (Article 194 of the CRP)2.
The original 1976 constitution reflected the political and ideological principles of the
revolution and therefore laid down the objective of ensuring the transition to
socialism, nationalising the means of production and participation of the Armed
Forces Movement in the country’s political life through the revolutionary council.
1
Cf. Maxwell, K.R. - Monje, S.C. (edited by), 1991
2
Gomes Canotilho, J.J. (2002), 591 et seq.
231
This text was refined with the 1982 revision, which abolished the revolutionary
council and set up the constitutional court as the guardian of the constitution. The
constitutional court is made up of 13 judges, ten of whom are appointed by the
parliament. Six of those members appointed or co-opted have to be selected from
among the judges of the other courts; the remainder have to be jurists. Their term of
office lasts for nine years and is not renewable (Article 222 of the CRP).
The court monitors the constitutionality of the provisions of state and regional
legislative acts and the constitutionality and legitimacy of national referendums,
verifies the physical incapacity of the Head of State, and rules on election-related
disputes, including those relating to local elections. The court is also responsible for
directing the dissolution of political parties which pursue ends associated with fascist
ideals.
The next revision, carried out in 1989, removed the "revolutionary" provisions
regarding the organisation of economic relations3; the 1992 and 1997 revisions,
carried out when Portugal signed the Maastricht Treaty and the Treaty of Amsterdam,
introduced the right for foreign citizens to vote, the right of legislative initiative for
citizens, and exclusive legislative powers for the parliament. The most recent
revision, carried out in 2001, relating to the extradition system, became necessary
when Portugal signed the Treaty establishing the International Criminal Court.
As regards the link between the Portuguese institutions and European integration, it
should be pointed out that the first constitutional government submitted a formal
request to join the European Economic Community in 1977. Public opinion was
largely in favour of joining the EEC and all the political parties, with the exception of
the Communist Party, were also supportive. From 1985, the year when it officially
3
This issue is expanded further in point 3.1 below.
232
acquired the status of EEC member, Portugal recorded solid economic growth, which
was largely dependent on Community assistance. This growth was also facilitated by
the stability of the national political scene: from 1987 onwards, Portugal benefited
from a series of stable parliamentary majorities which ensured that governments
lasted their full term. Indeed, although the Community cannot be seen to be entirely
responsible for the democratisation of the country, European integration indisputably
played a key role in its economic development, as well as influencing the political
system and Portuguese culture4.

developments
During the period of totalitarian rule, the structure of local and regional authorities
(parishes and municipalities within districts) remained unaltered within a system of
authoritarian government. Under the new 1936 Administrative Code, the districts
were reorganised into a new provincial structure and two new provinces were set up
in the island regions (the Archipelago of the Azores and Madeira). In this period, the
self-government powers of the parishes and municipalities were greatly reduced
because of the lack of funding allocated to them; practically no policies were
formulated at local level as local authorities were mere executors of decisions taken
by central government5.
With the transition to democracy, the regions became a key issue in two respects: on
the one hand, regionalisation met the need to scale down the central bureaucracy of
the totalitarian era and, on the other, it appeared essential in order to reduce the
4
See Barreto, A. (1999), 116.
5
See Opello, W.C. (1993), 163.
233
considerable economic and social divide between the Atlantic coast area, which
included the densely populated cities of Lisbon and Oporto, and the inland rural areas
and island regions where development was limited and slow.
The fundamental principles underpinning the 1976 constitution include the principle
of the unitary state (Article 6(1)), under which the territory is an indivisible republic
with a single constitution and, therefore, sovereign bodies which are the same for the
whole country. As such, however, the nature of the Portuguese republic is fully
compatible with the recognition of regional self-government and territorial
devolution. Devolution is achieved through the recognition of autonomous regions
(the Archipelago of the Azores and the island of Madeira) and local authorities
(municipalities and parishes) and through the planned administrative regions.
The constitution identifies two distinct forms of regional organisation: the

autonomous regions – the islands – (Articles 225-234 of the CRP) and the
administrative regions in mainland Portugal, which are governed by the provisions
laid down in the section on local authorities (Section VIII – Local Authorities).
Giving the island regions political autonomy does not affect the unitary nature and
integrity of the sovereign power of the state (Article 225(3) of the CRP); in any case,
regional autonomy appears to have been increased by the 1997 revision of the
constitution, which cites the autonomy of the autonomous regions as one of the
factors to be respected in any constitutional revision (Article 288(o) of the CRP) 6.
6
There are differing schools of thought as to how these guarantees should be interpreted vis-
à-vis the unitary nature of the state. In particular, the definition of the Portuguese republic as
a regional state or unitary regional state is not accepted by those who emphasise the
"exceptional" nature of the autonomy of the island regions. On this point, see Gomes
Canotilho, J.J. (2002), 358. The term "partial regional state" is used by Miranda, J. (1994),
256.
234
The autonomous regions have the right of initiative as regards revision of their
statutes, although these have to be approved by the national parliament, which cannot
amend or reject a draft without first obtaining the opinion of the regional assembly
(Articles 226(2) and (3) of the CRP). Once that opinion has been received, it is the
national parliament (the Assembly of the Republic) which debates and takes a final
decision on the text of the statute. The acts approving the statutes of the autonomous
regions therefore take the form of an ordinary state law (Article 161(b) of the CRP)7.
The island regions have legislative autonomy under which their regional assemblies
adopt regional legislative decrees: the legislative power of these assemblies is
primary or general (Article 227(1)(a) of the CRP), and is authorised or delegated
within the bounds set by the national authorising body (Article 227(1)(b) of the
CRP); it relates to the implementation of fundamental state laws on matters that are
not within the exclusive powers of the Assembly of the Republic (Article 227(1)(c) of
the CRP). Only in the 1997 revision does the constitution explicitly list the matters of
“specific interest to the region” in which regional authorities have legislative power
(Article 228 of the CRP). This amendment helped to clear up the legal uncertainty
which had arisen regarding the concept of “specific interest to the region” and to
eliminate doubts as to whether the lists of matters of regional competence contained
in the autonomous regions’ statutes (Article 31 of the statute of the Azores and
7
The political and administrative statute of the Azores was approved by Law 39/1980 of
5 August, as amended by Law 9/1987 of 26 March and, most recently, by Law 61/1998 of
27 August (www.alra.pt); the statute of the Region of Madeira was approved by Law
13/1991 of 5 June as amended by Law 130/1999 of 21 August (www.alrm.pt). As regards
the doctrinal doubts which have emerged as to whether this procedure for approving the
statute is compatible with real statutory autonomy, see Arágon Reyes, M. and Aguado
Renedo, C. (1996), in Miranda, J. (1996), vol. I, 718. The statutes of the autonomous regions
describe the region’s form of government, the way the legislative and executive powers are
organised, the role of the state representative, the region’s external powers and the economic
and financial organisation of the region. The statutes also mention the region’s symbols (its
flag, stamps and anthem).
235
Article 49 of the statute of Madeira) were intended to be exhaustive or merely
illustrative. Under the statutary provisions and the new Article 228 of the CRP, the
autonomous regions can legislate on nature protection, land use and spatial planning,
transport, agricultural, commercial and industrial development, sport, tourism, crafts,
the organisation of regional administration and all other issues related to the specific
needs arising from their island status8. Regional laws must comply with the
constitution and are subject to the constraints of international law and cannot
encroach on the areas in which the state (the national parliament and the government)
has exclusive legislative power (Articles 161, 164, 165 and 198(2) of the CRP);
regional laws adopted within the framework of delegated powers have to be
compliant with the limits laid down by the state law delegating these powers, just as
regional laws supplementing fundamental state laws are subject to the specific
constraint of respect for the principles laid down by the state legislator.
The regulatory powers of the regions are divided between the regional assembly and
the regional government. The assembly adopts provisions implementing the general
laws of the republic (by regional regulatory decree – decreto regulamentar regional)
(Article 227(1)(d) and Article 232(1) of the CRP), while the government is
responsible for implementing the region’s legislative acts (by decree or another
equivalent provision).
The autonomous regions also have administrative autonomy. The constitution grants
them executive powers (Article 227(1)(g) of the CRP), thus presupposing a regional
executive which, in addition to being the centre of political authority, is also the head
of the region's administration (Articles 46 and 60 of the statute of the Azores).
8
Piergigli, V. (1998), 1056.
236
Form of government in the autonomous regions. The organisation of powers is based
on a system of parliamentary government: the regional government is politically
accountable to the regional legislative assembly, which passes votes of confidence on
the programme or other issues of interest to the region and can propose motions of
censure on the execution of the government’s programme or on other important
matters (Articles 49-52 of the statute of the Azores).
The president of the regional government is appointed by the Minister of the

Republic, with due regard for the results obtained by the political groupings in the
elections for the regional assembly9.
The administrative regions. Unlike the autonomous island regions, the administrative
regions (Articles 255-262 of the CRP) do not have political autonomy, being
conceived as organisational bodies with administrative and financial autonomy
responsible for directing public services and coordinating and supporting the
activities of municipalities, while respecting municipal autonomy (Article 257 of the
CRP). The general law on the establishment of the administrative regions was
adopted in 1991 (Law 56 of 13 August 1991), under Article 255 of the CRP.
Subsequently, with Law 19 of 1998, parliament subdivided the territory into eight
regions (Entre Douro e Minho; Trás-os-Montes e Alto Douro; Beira Interior; Beira
Litoral; Estremadura e Ribatejo; Alentejo; Algarve; Lisboa e Setúbal) and put the
matter to a popular referendum, as required by Article 256 of the CRP10.
9
Gomes Canotilho, J.J. (2002), 606 et seq.
10
Article 256 makes the establishment of the administrative regions subject to the adoption of
a law of establishment relating to each individual region and to subsequent consultation of
the electorate on the effective establishment of the administrative regions and of each
regional area. If a majority of voters oppose the establishment of the administrative regions,
the votes relating to the establishment of each individual area are disregarded. According to
Rebordão Montalvo, A. (2003), 87, the complex and intricate nature of the procedure for
establishing the administrative regions laid down in the constitution has hindered and
slowed down the creation of these new bodies.
237
The 1998 referendum rejecting the establishment of the administrative regions11
interrupted the long, intricate process laid down in the constitution for establishing
these new bodies in mainland Portugal (Article 256(2) of the CRP). The arrangement
which had been planned for the administrative regions follows the twin model that is
typical of local government: the regional assembly is the deliberative body and is
composed of a combination of directly elected members and a smaller number of
members elected by proportional representation by members of the municipal
assemblies (Articles 259-60 of the CRP, Articles 3 and 22 of Law 56/1991). The
regional board is the executive body, elected by secret ballot by the regional
assembly from among its members. The failure to establish the administrative regions
is the result of the political parties' ambiguous attitude to regionalisation; while they
realise that regions could help to overcome the deficiencies of a centralised state and
redress economic and social imbalance, they are also afraid that establishing the
regions would provide political openings for opposition parties12.
There are two tiers of local authority: parishes (freguesias) and municipalities
(municípios). Each municipality is made up of a number of parishes. There are 308
municipalities (278 in mainland Portugal and 30 in the autonomous regions) and
4251 parishes (4047 in mainland Portugal and 204 in the islands)13. Local authorities
are corporate institutions with their own representative bodies (Article 235 of the
CRP). The constitution's provisions on local authorities enshrine fundamental
principles which cannot be altered even by constitutional revision, as central
government bodies depend on the existence and constitutional organisation of these
11
See point 2.2 below.
12
Cf. Opello, W.C. (1993), 166
13
See www.dgaa..pt/DGAL%20INTERNET.html and
www.anmp.pt/munp/mun/mun101w4.php?stri=A for these figures.
238
authorities14. The implementation of the constitutional principles relating to local
authorities is governed by Decree-Law 161 of 18 September 1999, as amended by
Law 5-A of 11 January 2002 which repealed the legislation in force on the
organisation of local authorities and regulates local-authority bodies.
Each parish has a parish assembly (assembleia de freguesia) and a parish board (junta
de freguesia) (Articles 244-246 of the CRP). The parish assembly is the deliberative
body and is elected by direct universal suffrage (secret ballot of all resident citizens,
using a system of proportional representation). The number of members of the parish
assembly varies according to the number of resident voters15. In parishes with fewer
than 150 registered voters, a plenary meeting takes the place of the parish assembly,
and its decisions are valid only when at least 10% of the voters resident in the parish
are present. The parish assembly elects the members of the parish board by secret
ballot; the latter is the parish's executive body, and is made up of a chairman and
elected members16. In parishes with over 150 voters, the chairman of the parish board
is the head of the list which receives most votes in the elections for the parish
assembly, while in smaller parishes (fewer than 150 voters), the chairman of the
parish board is elected by the plenary meeting.
Each municipality has a municipal assembly (assembleia municipal) and a municipal

chamber (câmara municipal) (Articles 250-252 of the CRP). The municipal assembly
is the deliberative organ and is directly elected by the people. Its members also
include the chairmen of the parish boards.
14
See Gomes Canotilho, J.J. (2002), 359
15
The number ranges from a maximum of 19 members in parishes with over 20,000 voters to
a minimum of seven members in the smallest parishes (with 1,000 voters or less).
16
The members of the parish board are elected by the parish assembly on a proposal from the
chairman of the former: the number of members is laid down by law and ranges from a
minimum of two members in parishes with over 5,000 voters to a maximum of six members
in parishes with 20,000 voters or more.
239
The municipal chamber is the executive body of the municipality. It is led by a
president, who is the head of the list which receives the most votes in the elections for
the municipal assembly. The number of other members is laid down by law17.
Elections for the municipal assembly and municipal chamber take place at the same
time.
As the administrative regions have not been set up, the administrative tier above the
municipality is the district (distrito). Legally speaking, these are not local authorities
but administrative districts, with a deliberative assembly made up of representatives
of the municipalities and an advisory council which assists the Civil Governor. The
Civil Governor represents the state and is responsible for monitoring the districts’
proceedings.

of government
The relationship between the state and regional and local authorities is based on the
principle of subsidiarity, which was enshrined in Article 6(1) of the constitution in
1997. Under this principle, the higher or larger tiers of authority take on
responsibilities which the lower or smaller tiers are unable to discharge or would
discharge less effectively. It also helps to secure democratic decentralisation,
ensuring that regional and local authorities are accorded specific competences for
governing their communities; this ties in with the objective of avoiding bureaucracy,
17
Lisbon has 16 members, Oporto has nine, municipalities with over 100,000 inhabitants have
10 and municipalities with 10,000 resident voters or less have four.
240
which underpins community involvement in the management of public services
(Article 267(1) of the CRP)18.
The constitution provides for a relationship of active cooperation and allegiance

between state bodies and regional government bodies, which are to help ensure the
economic and social development of the autonomous regions with a view to
correcting inequalities arising from their island status (Article 229 of the CRP). In the
autonomous regions, the state is represented by a Minister of the Republic, appointed
by the President of the Republic on a proposal from the government, after
consultation of the Council of State and the regional legislative assembly (Article 230
of the CRP; Article 69 of the statute of the Azores). As part of his scrutiny activities,
the Minister of the Republic may ask the constitutional court to examine the
constitutionality of regional regulations or legislative decrees. If the court rules these
to be unconstitutional, the minister issues an implementing ban and refers them back
to the body which adopted them so that they can be repealed (Article 72 of the statute
of the Azores).
Under the constitution, relations between the administrative regions and the state
were originally to be conducted via a government representative appointed by the
Council of Ministers; since the 1997 reform, the presence of such a representative has
been optional. Should the administrative regions be set up, their powers are to be
exercised in cooperation with the local and regional authorities already existing in the
area (Article 262 of the CRP). Article 258 of the CRP made the administrative
regions responsible for coordination between national and regional planning; this role
continues to be performed by the Regional Coordinating Commissions (CCR). These
are decentralised bodies of the Ministry of Public Works, Planning and Regional
18
Gomes Canotilho, J.J. (2002), 361
241
Administration with administrative and financial autonomy19, which help to draw up
the Regional Development Plan and establish the main lines of regional development
policy. Over the years, the CCR have become quite high-profile administrative
agencies, although officially they remain decentralised units of the Ministry and are
not elected bodies or representative of the public in any other way. There has thus
been substantial pressure for their reform, particularly in view of the fact that they are
responsible for the coordination of large sums of money coming from the EU
Structural Funds20. In actual fact, the acceleration of the EU integration process
coincided with a general desire to move away from this centralised, convoluted
model of regional coordination. This is the background to the procedure which led to
the adoption in 1991 of the framework law on the creation of the administrative
regions and to the subsequent consultative referendum in 199821. After the "no" vote
in the 1998 referendum on the establishment of the administrative regions, radical
reform of the CCR was relaunched and the 2003 reform law turned them into the
present Regional Coordination and Development Commissions (Comissões de
Coordenação e Desenvolvimento Regional – CCDR). The present five commissions –
the Commission for the North (CCDR Norte) based in Oporto, the Commission for
the Centre (CCDR Centro) based in Coimbra, the Commission for Lisbon and the
Tagus valley (CCDR LVT) based in Lisbon, the Commission for the Alentejo
(CCDR Alentejo) based in Evora and the Commission for the Algarve (CCDR
Algarve) based in Faro – are responsible for the implementation of the regional
operational programmes provided for by the Community Support Framework for
19
The Regonal Coordinating Commissions, which were set up in the 1960s, were regulated by
Article 1 of Decree-Law 494/1979 of 21 December and reorganised under Decree-Law
224/2001 of 9 August, within the four administrative regions (North; Centre; Lisbon and
Tagus Valley; Alentejo and Algarve). In May 2003, Decree-Law 104/2003 was passed,
converting the CCR into the present Regional Coordination and Development Commissions
(CDDR).
20
See point 3.5 below.
21
See Baum, M. and Freire, A. (2003); on this subject, see also point 2.2 below.
242
Portugal and play a key role in supporting and monitoring regional economic
development. With the 2003 reform, the regional council participates in the
appointment of CCDR chairmen. The regional council is an internal CCDR body
whose members include mayors of municipalities and representatives of parishes in
the region concerned. Despite these new mechanisms for ensuring local-authority
representation on CCDR executive bodies, the CCDR are still closely tied to the
government and the relevant ministry22.
In giving effect to the constitutional principle of subsidiarity, Law 159 of 1999 laid
down procedures for the administrative devolution of responsibilities to the local
level. This principle requires that responsibilities be exercised by the tier of
government which is in the best position to do so effectively, rationally and in a way
which best serves the interests of the citizens (Article 2(2) of Law 159 of 1999). The
responsibilities of the municipalities include infrastructure and energy-resource
management (transport and communications, energy, town and country planning),
health and security (health, civil protection, municipal police services and external
cooperation), education and culture (education, leisure facilities, science and culture),
economic development and environmental protection (promotion of development, the
environment and consumer protection).
In practice, the division of administrative responsibilities between the state and the
municipalities is tempered by provision for negotiations over the exercise of specific
responsibilities. Provision is made for a negotiated transition of a series of
responsibilities to the local authorities by 2004: a kind of "dynamic" devolution in
which, each year, the state budget stipulates the sums to be allocated to local
authorities for the exercise of new, additional responsibilities assigned to them.
Because of the considerable differences between Portuguese municipalities, the 1999
22
Cf. Decree-Law 104/2003 of 23 May 2003. For the role of the CCDR in the promotion of
regional economic development, see point 3.5 below.
243
law introduced a system of differentiated devolution whereby the new responsibilities
would be assigned to those municipalities which, under special agreements with the
state, meet the practical conditions for exercising them. In reality, this devolution has
yet to be implemented because endless bureaucracy at the centre is preventing the
actual transfer of administrative responsibilities to the local authorities23.
The smaller authorities (municipalities and parishes) have frequently joined forces as
a way of compensating for the inadequate funding they have traditionally received.
Indeed, local authority associations are so widespread as to be considered an
alternative system to the regions, particularly after the ‘no’ vote in the 1998
referendum on the establishment of the administrative regions. The local authority
associations provided for in the constitution (Article 235 of the CRP) are public
authorities governed by their own statutes and with their own funding, and are subject
to the same scrutiny as the municipalities.
There are also private-law associations such as ANMP (National Association of

Portuguese Municipalities) (www.anmp.pt) and ANAFRE (National Association of
Parishes) (www.anafre.pt), which protect the interests of their members24.
metropolitan cities
The constitution permits the establishment of other forms of local government in

large urban areas and on the islands (Article 236(3) of the CRP). Under this principle,
23
See Rebordão Montalvo, A.(2003), 93
24
As regards forms of cooperation, cf. points 1.1.1 and 1.1.2.
244
the metropolitan areas of Lisbon and Oporto were established in 1991 (Law 41/1991
of 2 August). Metropolitan areas are public authorities which aim to promote the
interests of the municipalities within their boundaries; two-thirds of the municipal
assemblies representing the majority of the area's population must first vote in favour
of their establishment. They have their own funding and financial autonomy, and
their goal is optimum management of interests and services throughout the area,
particularly public transport and communications, provision of health and
environmental protection infrastructure, and civil protection.
The metropolitan areas perform their tasks through bodies which, unlike those of
other local authorities, are not representative of the people. The metropolitan
assembly (the decision-making body) is thus made up of members elected by the
municipal assemblies, whereas the metropolitan committee (the executive body) is
made up of the chairmen of the municipal executive bodies. The advisory body
responsible for coordination between the different tiers of administration in the
metropolitan area is the metropolitan council, which is made up of the chairman of
the Regional Coordination and Development Commission (CCDR), the members of
the metropolitan committee, and representatives of public services and bodies whose
activities fall within the remit of the metropolitan area.
The metropolitan area of Lisbon (AML) (www.aml.pt) covers 19 municipalities. It is

responsible for coordinating investment and services of supra-municipal interest,
particularly as regards city and suburban public transport and communications, and
for coordinating state and municipal decisions in matters of infrastructure,
environmental protection and civil protection. The metropolitan area of Oporto
(AMP) (www.amp.pt) is part of the heavily industrialised and densely populated
North region. It has the highest proportion of employed residents (31%) in the region,
as well as being home to almost half (48.5%) of the region's unemployed. The high
level of business transactions conducted in this area is evidence of its key role in
245
economic development. As a result, the AMP has a key role to play in economic and
social cohesion policies to curb social exclusion and urban decline in the area.
The metropolitan areas’ legal system has recently been reformed. In May 2003, a law
was passed25 providing for the establishment of two types of metropolitan area:
a) large metropolitan areas (GAM), comprising a minimum of nine municipalities

and at least 350,000 inhabitants;
b) urban communities (ComUrb), comprising a minimum of three municipalities and

at least 150,000 inhabitants.
The law gives the metropolitan areas of Lisbon and Oporto a maximum of one year to
adopt the reform.

Right from the very first elections in the democratic era (25 April 1976), a fairly
stable political framework emerged: the main political groupings (the Portuguese
Communist Party (PCP) and the Socialist Party (PS) on the left, the Democratic
Popular Party (PPD)/Social Democrat Party (PSD) on the right, and the Party of the
Social Democratic Centre (CDS)/People's Party (PP) in the centre) together usually
account for more than 90% of all votes. A genuinely bipolar system has emerged,
dominated by two parties: the PS on the centre-left and the PSD on the centre-right.
25
Law 10/2003 of 13 May, published in the Portuguese official journal, I Series A, No. 110, of
13 May 2003.
246
This system has been fostered by the presidential-parliamentary form of government,
in which parliament and the President of the Republic – both of them directly elected
– share responsibility for forming and preserving a stable government26. Despite
proportional representation, the bipolar system has made it difficult for the smaller
parties to break through and win seats.
In 1999 the Socialist Party, which had won the 1995 elections after 10 years in
opposition, failed to achieve an absolute majority in parliament. As a result of this
election, the declining situation of the Communist Party was brought under control
and a new far-left grouping known as the Left Bloc (Bloco de Esquerda) was formed
from a coalition of Maoist and old-style communist parties and new citizens'
groupings. The emergence of this new force prompted the Socialist Party to move to
the left: the libertarian, radical approach of the Left Bloc (whose political programme
focused on the problems of immigrants and the poor and issues related to new rights)
thus appears to have influenced Portugal’s political agenda27.
As regards the formation of political associations, a number of pro-regionalist public

pressure groups were founded during the 1998 referendum on the establishment of
the administrative regions. These groups had relatively little influence on the
outcome, however; the "no" vote was essentially due to the ambiguous and uncertain
stance adopted by the political parties behind the referendum28.
26
Costa Lobo, M.( 2001), passim; see Farelo Lopes, F. and Freire, A., (2002), 43 et seq. on the
origins and structure of Portuguese political parties.
27
Costa Lobo, M and Magalhães. P. (2001), 14
28
See point .2.2 below.
247
All the major parties have regional and local sections. As regards the geographical
influence of each individual party, it is well known that the Communist Party, which
had well-organised local sections even before the 1974 revolution, has always
enjoyed very solid electoral support in the Alentejo because of that region's rural and
highly anticlerical social structure. The Socialist Party, on the other hand, had a rather
limited organisational structure before the change-over to democracy. After the 1974
coup d’état, the voters in the centre, who were conservative and heavily influenced
by the Catholic Church, tended to support the programmes of the Democratic Popular
Party (PPD) and the Social Democrat Party (PSD) 29.
Small parties linked to the autonomous status of the island regions (the Partido
Democrático do Atlântico – PDA, the Aliança Democrática dos Açores – AD-A, and
the União Democrática Popular – UDP, which is a far-left party) stand in local and
regional assembly elections in these autonomous regions. However, these parties
have achieved little electoral success30.
In the new period of democracy after 1974, consultation mechanisms were set up in
many public institutions, such as schools, universities and hospitals, to give the public
and users a greater say. Despite the general climate of openness, genuine civil and
political participation was not achieved. There was virtually no local authority or
29
Maxwell, K. (1995), 71
30
For regional election results, see point 2.1 below (tables 2.2 and 2.3).
248
private-law association involvement in the governing boards of a number of public
institutions (e.g. large hospitals), and consumer and user associations were relatively
thin on the ground, especially considering the wide range of public services31.
As regards economic and social cooperation, in which representatives of the state or

local authorities get together with representatives of the business world to exchange
information, compare forecasts and take joint decisions, the ups and downs of
Portuguese political life have certainly not helped a culture of consultation to take
root. This practice started to become more firmly established during the second half
of the 1990s, following the Socialist Party's victory in the 1995 elections. Generally
speaking, the weak position of the Portuguese business sector during the period when
democracy was being established set the tone for all subsequent action, and
particularly for efforts at social dialogue, which only provided a belated and therefore
ineffective response to resolving the problems besetting Portuguese industry32. The
importance of socio-economic cooperation is, however, now enshrined in the
constitution which, since the 1989 revision, includes among the rights of trade unions
the right to be represented in social consultation bodies (Article 56(d)), and provides
for the setting-up of an Economic and Social Council. This body is governed by
Article 92 of the CRP, which defines its membership and role. The ESC’s members
include representatives of the government, of trade union organisations and
employers’ organisations, of family organisations and of local and regional
authorities. The ESC participates in the adoption of major decisions and in economic
and social development plans33.
31
Cf. Barreto, A.(2002)
32
Paz Ferreira, E. (2001), 340 et seq.
33
The Economic and Social Council was set up by Law 108/91 of 17 August as subsequently
amended by Decree-Law 90/92 of 21 May (www.ces.pt). See point 3.4 below for the role of
this body and of social consultation in Portuguese economic development.
249
LEVEL
The 1976 Portuguese constitution contains an explicit decision to use a proportional

representation system for elections. This system is an essential guarantee of
democracy and, as such, cannot be changed by constitutional revision (Article 288(h)
of the CRP).
For national parliament (Assembleia da República) elections, the constitution also

lays down the formula for converting the number of votes won by the candidates into
seats, using the d’Hondt method or method of the highest average (Article 149(1)).
For the election of other representative bodies, the constitution lays down the
principle of proportional representation and the law defines the particular electoral
formula of proportionality to be employed. The members of the national parliament
and of local and regional representative bodies thus have to be elected by
proportional representation (Article 113(5)). This general principle is explicitly
confirmed in relation to the election of the regional legislative assembly
(Article 231(2)) and the assemblies of local authorities (muncipalities and parishes)
(Article 239(2)). It can therefore be said that, except for the election of the President
of the Republic, the principle of proportional representation is firmly enshrined in
Portuguese law. Consequently, any laws creating mixed systems or changing
constituency boundaries in order to undermine proportionality are constitutionally
invalid. The 1997 constitutional revision sought to make the proportional
representation system more flexible by introducing single-member and party-list
voting systems in order to achieve more personalised votes34. With this revision,
34
Gomes Canotilho, J.J.(2002), 313
250
Article 149 CRP provided for different kinds of constituency (termed "districts"):
there are thus multi-member and single-member districts, and a national district
which covers the territory of the entire country35. The electoral law for the Assembly
of the Republic lays down the detailed rules governing these electoral districts. In
each of the 22 multi-member districts, the votes won are converted into seats in the
national parliament. Eighteen of these electoral districts are the same as the
administrative districts, two are the same as the autonomous island regions (the
Azores and Madeira) and the last two are reserved for emigrant voters.
Since the 1997 revision, the structure of the electoral system has continued to
consolidate the parties’ regional roots and their central role in the selection of
candidates. The parties are, for the most part, structured on the basis of regional
sections, which broadly correspond with the multi-member electoral districts. This
means that the lists of candidates for the national parliament are agreed with the
regional party leaders and are under the influence of the party’s central bodies to a
greater or lesser degree. The list system also affects the candidates’ relationship with
their party and the voters: as the lists are blocked, the voter cannot indicate a
preference for a particular candidate. Portuguese voters thus vote for a party rather
than a candidate, and whether a candidate is elected depends on the position allocated
them in the list by their party. Portugal is divided into large electoral districts: out of
the total 22 electoral districts, 59.1% of the members of the national parliament
elected in 2002 came from the districts of Lisbon and Oporto (which elect 48 and
35
Article 149 of the CRP stipulates that the members of the Assembly of the Republic are to
be elected by electoral districts, the boundaries of which are to be laid down by law, which
may also provide for the existence of multi-member and single-member electoral districts as
well as their kind and complementarity, in order to secure the system of proportional
representation and the d'Hondt highest average method when converting the votes into the
number of seats. With the exception of the national electoral district, the number of deputies
allocated to each multi-member electoral district is to be proportionate to the number of
voters enrolled in the electoral register for that district.
251
38 members respectively) and the five medium to large districts (with 11 or more
seats). These figures are actually not very different from those recorded in the 1987
elections. This means that the 1989 and 1997 constitutional changes to the national
parliament’s electoral system, which reduced the maximum number of members to
230, had little effect on the average size of the electoral districts. Indeed, the average
number of seats to be filled in each district has fallen from 11.4 to 10.5. Moreover,
the number of seats allocated to each electoral district is proportional to the number
of registered voters: from this point of view, there is no danger of unequal
representation in the national parliamentary elections and, therefore, a vote has more
or less the same value in each electoral district36. In the last national elections, votes
were strongly polarised around the social-democrat right and the socialist left: the
centre (CDS-PP) won slightly more support (8.72%) than the Red-Green alliance
(PCP-PEV-CDU) (6.94%). On the far left, the Left Bloc (BE) won 2.74% of the vote,
whereas other minor groupings such as the coalition of Portuguese workers
(PCTP/MRP), the Partido nacional renovador (PNR), the Movimento O partido da
Terra (MPT) and the alliance between the Left Bloc (BE) and the UDP (União
Democrática popular), a far-left party, did not win any seats at all.
Assembly of the Republic – 17 March 2002 (http://eleicoes.cne.pt)

Registered Votes cast Non-voters Blank ballots Spoilt ballots
voters
Total Percentage Total Percentage Total Percentage Total Percentage
8,902,713 5,473,655 61.48% 3,429,058 38.52% 55,121 1.01% 52,653 0.96%
36
Cf. the figures reproduced in Freire, A. and Baum, M. (2003), 117.
252
Votes per party – national results
Party PPD/ PS CDS- PCP- BE PCTP/ MPT PPM PH PNR POUS
PSD PP PEV- MRPP
CDU
Total 2,200,765 2,068,584 477,350 379,870 149,966 36,193 15,540 12,398 11,472 4,712 4,316
Perc. 40.21 37.79 8.72 6.94 2.74 0.66 0.28 0.23 0.21 0.9 0.8
Seats 105 96 14 12 3 0 0 0 0 0 0
The legislative assemblies of the autonomous regions (the Azores and Madeira) are
elected by direct, secret, universal suffrage in accordance with the proportionality
principle (Article 231 of the CRP). However, the constitution does not specify which
type of proportional representation system is to be adopted for converting votes into
seats, as it does in the case of elections for the national parliament (Article 149(2) of
the CRP). The statute of each autonomous region lays down rules governing the
demarcation of constituencies and other rules defining the electoral system for
regional assembly elections. In the autonomous region of the Azores, each island in
the archipelago forms one electoral district; each district elects two deputies, plus one
for every 6000 registered voters or for every polling station serving more than 1000
voters (Article 13 of the statute of the Azores)37. However, this system has a number
of limitations, as it fails to take account of the varying population densities of the
different islands of the archipelago. Thus an island such as Corvo, which has 300
voters, elects the same number of deputies (two) as islands with 4000 voters (such as
Flores and São Jorge), or even 5000 voters (as is the case of Santa Maria and
Graciosa)38. The regional statute also lays down rules governing length of term,
submission of candidacies, and the criteria for allocating seats. Regional deputies
remain in office for four years and are elected on the basis of individual or joint
37
This rule is laid down in the electoral law for the regional assembly of the Azores, approved
by Decree-Law 267/80 of 8.8.1980 as most recently amended by Organic Law 2/2001 of
25.8.2001 (www.alra.pt).
38
See Araújo, A. and Freire, A. (2002) on the limitations of the proportional representation
system adopted by the Azores legislative assembly and on proposals to modify the system.
253
political party lists which compete within each electoral district. The number of
candidates on a list is equal to the number of seats allocated to the electoral district in
question, plus a maximum of five substitute candidates. In each district, votes are
converted into seats by means of a proportional system using the d’Hondt method of
the highest average. The seats won by each list are allocated to individual candidates
on the basis of the order of precedence stipulated in the declaration of candidacy
(Article 18 of the statute of the Azores).
In the most recent elections for the Azores regional legislative assembly, the Socialist
Party won almost 50% of the votes, followed by the Social Democrat Party with
32.48%. The People's Party and the Red-Green coalition (Communist Party and
Greens) won 9.56% and 4.83% respectively, the far left (BE) won 1.38%, and the
pro-autonomy grouping (PPM/PDA) gained a mere 0.80%.
The results were slightly different for the autonomous region of Madeira. The
winning party in the elections for the regional legislative assembly was the Social
Democrat Party, which exceeded the 50% threshold with ease (55.91%), while the
Socialist Party won just 21% of the votes; the far left (UDP) achieved a slightly better
result (4.79%) than the Red-Green coalition (PCP-PEV) (4.64%).
AZORES
Regional Legislative Assembly – 15 October 2000 (http://eleicoes.cne.pt)
Results – Autonomous region of the Azores
voters
188,543 100,484 53.30% 88,059 47.04% 895 0.89% 862 0.86%
254
Votes per party – Results – Autonomous region of the Azores
Party PS PPD/PSD CDS- PCP- BE PPM/PDA
PP PEV-
CDU
Total 49,438 32,642 9,605 4,856 1,387 799
Perc. 49.20% 32.48% 9.56% 4.83% 1.38% 0.80%
Seats 30 18 2 2 0 0
MADEIRA
Regional Legislative Assembly – 15 October 2000 (http://eleicoes.cne.pt)
Results – Autonomous region of Madeira
voters
208,160 129,734 61.91% 79,807 38.09% 1,136 0.88% 1,640 1.26%
Votes per party – Results – Autonomous region of Madeira
Part. PPD/PSD PS CDS- UDP PCP- PSN

PP PEV
Total 72,588 27,290 12,612 6,210 6,015 2243
Perc. 55.91% 21.04% 9.72% 4.79% 4.64% 1.80%
Seats 41 13 3 2 2 0
The rules governing municipality and parish elections are laid down in the 2001
electoral law relating to local authorities (Organic Law 1 of 14.8.2001). The
minimum voting age is 18. The right to vote is accorded not only to Portuguese
nationals but also to (i) nationals of other EU Member States, provided that the
Member State gives the same right to Portuguese nationals resident in its territory,
and (ii) other foreign nationals who have been resident in Portugal for at least three
years and whose country of origin gives the same right to Portuguese nationals
255
resident in its territory39. Each local authority forms a single electoral district;
proportional representation and the d’Hondt method of the highest average are used
to convert votes into seats. The members of the local authorities' decision-making
bodies and the municipal chamber (câmara municipal) are elected by direct, secret
suffrage from competing multi-member lists put forward for each body to be elected.
Each voter may only vote for one list.
In the last elections for the municipal chambers, the socialists and the social
democrats shared almost 60% of the votes: the Socialist Party came first, winning
34% of the votes, followed by the Social Democrat Party, with 28.22%, and the
coalition of Communists and Greens (PCV and PEV), with 10.61%. The
Conservative right, the Christian Democrats and People's Party won 3.72% of the
votes; these parties achieved similar results in the elections for the municipal
assembly40.
In the last elections for the parish assemblies (Assembleia de freguesia), the Socialist
Party (33.85%) and the Social Democrat Party (26.54%) shared 60% of the votes; the
Red-Green coalition was the next largest grouping with 11.19%.
Calculating turn-out. In order to exercise their right to vote, Portuguese citizens have
to have been registered prior to the election in the electoral roll (Censo Eleitoral). In
each election, the official number of abstentions is calculated by taking the difference
between the number of registered voters and the number of those who actually
exercised the right to vote. This method of calculating abstentions can lead to an
over-estimation, as there may be citizens who, although potentially entitled to vote,
39
Cf. Article 2 of Organic Law 1/2001 of 14 August 2001 (electoral law relating to local
authorities): Article 5 lays down similar conditions for the right to stand for election, for
which no age restriction is specified (www.cne.pt)
40
The figures for the 2001 elections can be viewed at www.cne.pt
256
were not registered in the electoral roll prior to the election. The number of registered
voters may also be distorted by dual registration errors, e.g. following a change of
residence; these kinds of errors, too, can lead to over-estimation of the actual number
of people who have abstained. Over and above these “technical” problems of
calculation, the fact remains that the level of abstentionism in Portugal started to rise
in the 1980s and continued to do so throughout the 1990s. It was observed that
abstentionism in Portugal rose by 91% between 1970 and 1990: this is surprising
given that no similarly high increase was recorded in other countries which made the
transition to democracy at the same time (Spain and Greece). Turn-out tends to be
highest in general elections and presidential elections, with the level of abstentionism
rising progressively for regional, local and, lastly, European Parliament elections. As
regards the influence of social factors, it has been ascertained that, from a socio-
demographic perspective, the crucial factor in turn-out at the 1999 general election
and the 2001 presidential election was age: the older the voters, the higher the turn-
out41.
In the most recent elections for the national parliament (2002), the abstention rate
was 38.52%; in the elections for the Azores regional legislative assembly (2000) it
was 47.04%, while in those for the Madeira legislative assembly it was slightly lower
(38.09%). Similar levels of abstention marked the local-authority elections of 2001.
Thus 39.88% of the electorate failed to vote in the elections for the municipal
chambers (Câmara municipal), with a similar percentage in those for the municipal
assemblies (39.87%) and parish assemblies (39.97)42.
41
See Freire, A.(2003), 119 et seq.
42
These figures can be viewed at http://eleicoes.cne.pt
257
The 1976 Portuguese constitution did not lay down any provisions for referendums at
either national or local level. In practice, popular participation in the 1970s took the
form of huge turn-outs in national parliament elections (between 1976 and 1983,
turn-out never fell below 93%), workers experimenting with self-management, and
participation in political demonstrations of all kinds. Portugal's accession to the
European Community in 1986 served to consolidate the institutions of the market
economy and representative democracy43. The 1982 constitutional revision
introduced local referendums: Article 240 of the CRP allows local authorities
(municipalities and parishes) to hold referendums on matters falling within their
respective remits, subject to the provisions of the ordinary law governing the form of
such requests and the procedures for submitting them.
The 1989 constitutional revision introduced national political referendums, the

conditions for which were further defined in the 1997 revision. Under Article 115 of
the CRP, such a referendum may be called by the Assembly of the Republic or the
government on matters falling within their respective remits and subject to the
restrictions laid down by the constitution and the law implementing the referendum44.
Article 115 of the CRP also stipulates that referendums may not be held on
amendments to the constitution, budgetary, fiscal and financial questions, matters
43
Freire, A. and Baum, M. (2003), 136.
44
Cf. Organic law on the national referendum 15-A/98 of 3 April 1998, which regulates the
initiative phase and the decision-making phase. In the initiative phase, a proposal is
submitted by the Assembly or approved by the government, or a popular initative is
supported by 75,000 registered voters. The constitutional court then rules on the
constitutionality and legitimacy of the questions posed in the referendum; the court has to
pronounce judgment within 25 days (a deadline which can be brought forward by the
President of the Republic on grounds of urgency). The decision-making phase is reserved
for the President of the Republic, who also has the power to reject requests for referendums.
258
falling within the remit of the Assembly of the Republic provided for in Article 161
of the constitution, and matters with regard to which the Assembly has exclusive
powers, with the exception of the fundamental principles of the education system.
Referendums may also be requested on issues of significant national interest which
are the subject of an international agreement, with the sole exception of issues
relating to peace or the alteration of borders (Article 115 of the CRP). The final
decision on proposals for referendums lies with the President of the Republic, who
can refuse to give his assent and must, in any case, rule within 20 days of the
constitutional court's judgment on the constitutionality and legitimacy of the
questions posed. The outcome of a referendum is binding when the number of votes
cast is greater than half the the number of registered voters: if this is the case, the
competent political bodies are obliged to implement the proposal and adopt the
political and/or legislative acts specified therein45.
The 1997 revision introduced regional referendums, which can be held on specific
questions falling within the remit of the autonomous island regions (the Azores and
Madeira) (Article 232(2) of the CRP), and referendums which form part of the
legislative procedure for establishing the administrative regions (Article 256 of the
CRP).
The national referendums on the establishment of the administrative regions and the
legalisation of abortion. The first national referendums were held in 1998; there were
two questions on the establishment of the administrative regions and one on the
legalisation of abortion. The question on abortion proposed the full liberalisation of
the practice. The first question on regionalisation concerned the creation of new
45
Gomes Canotilho, J.J. (2002), 299.
259
regions, and the second asked the electorate to vote for or against the geographical
breakdown of the regions, as laid down by the 1998 law46.
The decision to hold referendums on these issues was the result of a political
agreement between the centre-right PSD party and the government, led by the
Socialist Party leader, António Guterres: the right-wing conservative parties (CDS
and PP) only appeared to support these referendums for strategic reasons, while the
left-wing parties of the Unitary Democratic Coalition (Coligação Democrática
Unitária – CDU), led by the Portuguese Communist Party (PCP), strongly opposed
them. The two referendums generated wide-scale democratic participation, with
“organised” participation in the referendum campaign from numerous pressure
groups, civic movements and public committees.
There was a high rate of abstention in both referendums. Twice as many people
(68.1%) abstained in the referendum on abortion as in the 1995 political elections
(33%); the level of abstentions in the referendum on the establishment of the
administrative regions (52%) was twenty percent higher than that recorded in the
preceding political elections.
Tables showing the results of the 1998 referendums (http://eleicoes.cne.pt)
Referendum on abortion (28 June 1998)

Question: Do you agree that the voluntary interruption of pregnancy, if it is
carried out at the decision of the woman, in the first ten weeks of her pregnancy,
on legally established health grounds, should be decriminalised?
46
The administrative regions were regulated by Law 56 of 1991: in practice, this provision
was only actually implemented in 1998, when the socialist government gave its backing to
Law 19 of 1998 which defined eight regions: Entre Douro e Minho; Trás-os-Montes e Alto
Douro; Beira Interior; Beira Litoral; Estremadura e Ribatejo; Alentejo; Algarve; Lisboa e
Setúbal.
260
voters
8,496,089 2,709,503 31.89% 5,786,586 68.11% 29,057 1.07% 15,562 0.57%
Results
YES NO
Total 1,308,130 1,356,754
Percentage 48.279999% 50.07%
Referendum on regionalisation
Question No. 1: Are you in favour of the practical establishment of the
administrative regions?
Referendum – 8 November 1998
voters
8,640,026 4,157,447 48.12% 4,482,579 51.88% 0 0.00% 76,395 1.84%
Results
YES NO
Total 1,453,749 2,530,802
Percentage 34.970001% 60.869999%
Question No. 2: Are you in favour of the practical establishment of an

administrative region in your electoral district?
Referendum – 8 November 1998
voters
8,640,026 4,157,447 48.12% 4,482,579 51.88% 0 0.00% 76,395 1.84%
261
Results
YES NO
Total 0 0
Percentage 0.00% 0.00%
The strong influence of the Catholic Church was a factor in the low turn-out and the
“no” result in the referendum on the legalisation of abortion: many bishops and
prelates used their pulpits and the media to argue against legalisation47. Seven
organised civic groups took part in the referendum campaign on abortion: three were
in favour of legalisation and four were opposed. Left-wing party representatives
supported the views of the pro-legalisation civic groups, although none of the groups
was dominated by one political party. The standpoints of the groups opposing
legalisation differed. The Solidarity and Life movement, which advocated preserving
the existing legislation on abortion (permitted only in cases of rape, serious foetal
malformation or danger of serious harm to the physical or mental health of the
mother), was backed by the prime minister and the conservative PSD and PP. The
three other groups opposed to legalisation were the Together for Life committee,
which included the Minister for Finance, the socialist Antonio de Sousa Franco; the
Life North group, which brought together prominent figures from northern Portugal;
and the No to abortion on demand group, which was formed in Coimbra and had
members from across the political spectrum.
The low turn-out in the referendum on the administrative regions was ascribed to the
ineffectiveness of the pressure groups and citizens’ committees and the uncertainties
and divisions within the parties supporting the proposal. Indeed, of the 25 pressure
groups which sprang up at the time of the referendum, only five or six were not
controlled or organised by the major political parties. The control exercised by the
47
Freire, A. and Baum, M. (2003), 140, also point out that there were many authoritative
voices in the Catholic Church, including the Patriarch of Lisbon, D. José Policarpo, who
adopted much more moderate positions.
262
political parties over the pressure groups was thus quite substantial: the low turn-out
was a clear reflection of the uncertainties and divisions within the very parties which
had promoted the referendum. The divisions within the Socialist Party were
particularly significant, where the party's elder statesman Mário Soares took a public
stand against regionalising the country while the leader and Prime Minister in office,
António Guterres, upheld the case for regionalisation48.
The opposition to the creation of the administrative regions was led by the opposition
Social Democrat party, which was allied with the Christian Democrats of the People's
Party and with two independent civic movements: the (centre-right) United Nation
(Nação Unida), whose campaign was based on nationalistic arguments, and One
Portugal (Portugal Único), which was tacitly supported by the former socialist
president, Mário Soares.
Opinion polls revealed that opposition to regionalisation was brought about by a

number of factors:
1) fear of breaking national unity and allowing separatism to prevail;
2) concern that regionalisation might increase the wealth of the northern regions and
exacerbate the isolation of inland rural areas;
3) fear that, as was the case with the autonomous island regions, regionalisation
would greatly increase the number of public officials and, therefore, push up the
national debt, leading to a rise in taxation;
48
Cf. Freire, A. and Baum, M. (2003), 144
263
4) a wish to combat the creation of regions in the poorest areas under the influence of
the Spanish border regions, and rejection of the plan for a federal Europe of the
regions with joint, supranational authorities able to limit the sovereignty of the
nation-state49.
Whereas in the referendum on abortion, the parties and pressure groups had to
contend with a very tough adversary in the Portuguese Catholic Church, the key
factor in the referendum on regionalisation was the role of the political parties and
their ability to absorb pressure groups and civic movements. However, the voting
pattern in this referendum did not reflect the geographical areas of influence of the
different political parties. Although the northern areas, in which there is a greater
concentration of small and medium-sized businesses, voted mainly for the right-wing
parties in the 1995 political elections, these same areas strongly supported
regionalisation in 1998, despite the fact that the referendum had been instigated by
the Socialist Party. This can be explained by the fact that an increasingly powerful
cross-party lobby was emerging in the northern regions in support of regionalisation.
In the Algarve region, all the local centre-right representatives supported the “yes”
campaign. Despite this backing, the campaign mounted by the regionalist lobby in
these regions was not strong enough to win a majority. In the central regions,
including Santarém, the heated controversy over the geographical delimitation of the
regions was manifested in a large vote against regionalisation. The extensive support
for regionalisation in the Alentejo region (where 51% voted “yes”) was linked to the
strong concentration in that area of the Communist Party, which wanted to create a
region it could control itself, and to the fact that none of the local pressure groups or
civic movements supported the “no” cause.
49
See Blanco de Morais, C. (1999), 420
264
Regional and local referendums. Under Article 232 of the CRP, each regional
assembly can propose regional referendums. If such a proposal is approved by the
President of the Republic, the public is called upon to give its binding opinion
directly on a question of specific regional interest. The conditions and the referendum
procedure itself follow the rules laid down in Article 115 applying to national
referendums. Local referendums are governed by Article 240, which entitles local
authorities (municipalities and parishes) to call referendums on matters falling within
their respective remits according to the conditions and procedures laid down by
Organic Law 4 of 24 August 2000. Article 4 of this lists the matters which cannot be
the subject of this kind of referendum, namely: questions which fall within the
legislative powers of the sovereign bodies; matters governed by laws or regulatory
statutes binding on local authorities; decisions contained in the plan; budgetary, fiscal
and financial questions; matters which are the subject of irrevocable decisions
enshrining legally-protected rights or interests, with the exception of parts thereof
which are detrimental to the addressees; and matters on which court judgments have
been issued. Matters which have been the subject of programme contracts are also
excluded. Deputies, municipal and parish assemblies, municipal chambers and parish
boards have right of initiative as regards referendums. The public also has a right of
initiative which can be exercised by groups of citizens registered in the area of the
municipality or parish in question (Article 10). Once the municipal or parish
assembly has decided on the holding of a referendum, the constitutional court
scrutinises the questions to ensure their compliance with the constitution and the law;
it has 25 days to give a ruling (Article 27). A referendum only has binding force if the
number of voters is greater than one half of the voters registered in the census
(Article 115 of the CRP); the result is then binding on the local-authority bodies
concerned.
Referendums do not preclude the right to submit petitions: Article 52 of the CRP
gives all Portuguese citizens the right to submit, individually or jointly with others,
265
petitions, observations, claims or complaints for the purpose of defending their rights,
the constitution, the law or the general interest. They also have the right to be
informed, within a reasonable time, of the response.
A further form of direct participation in political life is the plenary meeting of voters
which replaces the municipal assembly in very small parishes.
In the wake of the defeat of the regionalist lobbies in the 1998 referendum,
commentators sought to interpret the high abstention rate and the victory of those
opposed to regionalisation in mainland Portugal.
The explanation probably lay in the structure of the local institutions. Mainland
Portugal does not have a tradition of meso-level institutions, and local calls for a
reduction in state powers are so thin on the ground that there cannot seriously be said
to be any real conflict between centre and regions. Only the island regions identify
with the regional tier of government, and their separate status contributes to the
widespread view that this tier is unnecessary elsewhere50.
That does not mean, however, that there is not wide support for decentralisation in
Portugal: there was no shortage of proposals offering an alternative to the
administrative regions after the failure of the 1998 referendum. These included the
idea of strengthening local authorities (municipalities and parishes) and local-
authority associations. Portugal's municipal authorities are well-established
institutions, yet they receive a very small state budget (one of the lowest in Europe).
This makes it very difficult for them to establish the services, infrastructure and
50
See Baum, M. and Freire, A.(2003), in Bukowsky, J. et al. (2003), 39
266
communication networks necessary for local economic development, even when they
join forces with other authorities. In addition to the fact that municipal government
takes many different forms, there is a widespread and now deep-rooted awareness of
the limits of the centralised state. Despite steps to devolve the tasks of various
government departments, the issue of coordination between these departments and
the Regional Coordination and Development Commissions, which remain largely
under the authority of the state, has yet to be resolved. As Portugal continues its
integration with the rest of Europe, the creation of a mainland regional government
structure will clearly become a key item on the political agenda once more51.
The 1976 Portuguese constitution laid down numerous principles, rules and
guarantees regarding economic relations, in recognition of the important role the
economy would play in securing the political and social change visualised by the
revolution of 25 April 1974. The aim was the antithesis of the corporatist regime
imposed by the 1933 constitution. The Armed Forces Movement succeeded in
including in the 1976 constitution the principle of the “transition to socialism through
the creation of the necessary conditions for the working classes to be able to exercise
democratic power”: the Portuguese democratic state thus undertook to socialise
production methods and wealth and to promote the well-being of the working
classes52. These goals underpinned the public ownership of the principal means of
production, economic development planning, the central role of the plan with regard
to the free exercise of private economic initiative, and the irreversible nature of
51
Baum, M. and Freire, A, (2003), 43
52
Cf. Articles 2 and 9(c) of the 1976 constitution.
267
nationalisation after 25 April 1974. In practice, however, after the introduction of the
1976 constitution, law-making and economic policy moved clearly away from
Marxist principles and was guided move by the rules of the market economy53. This
is the backdrop to the 1982 revision, which removed the ideological principles
applicable to the transition to socialism and established the principle of the co-
existence of the various forms of ownership (public, private and cooperative) for the
means of production. The 1982 constitution also stipulated that compensation was to
be provided for requisitioned and expropriated estates, including those expropriated
from large landowners54. The ideological cleansing of the constitution was completed
with the subsequent 1989 revision, which abolished the principle of the
“irreversibility of nationalisation” and made provision for the “reprivatisation of …
the means of production or other property nationalised after 25 April 1974” (Article
296 CRP); with this revision, Portugal came into line once and for all with the
European constitutional systems regarding economic relations55. The 1997 revision
eliminated the constitutional principle relating to sectors excluded from private
economic initiative. Portuguese law is thus now no longer obliged to determine the
basic sectors in which private business activity is forbidden; it merely has the option
of doing so56.
The constitution also incorporated a number of principles regarding the financial and
tax system: the central banking system must comply with international and
Community law (Article 102); taxes are to be imposed by law, as provided by the
constitution (Article 103); and tax rates must be proportional to family income and
needs (Article 104).
53
Sousa Franco, A. and D'Oliveira Martins, G. (1993), 142 et seq.
54
Paz Ferreira, E.(1996), in Miranda, J.(1996), vol. I, 383 et seq.
55
See Leitão Marques, M.M. (1991), 32
56
Article 86(3) of the constitution stipulates that the law may determine the basic sectors in
which private economic enterprise is banned.
268
The growing need to incorporate private law into the public enterprise system
contributed to the development of a major economic privatisation drive. The
movement for privatisation which emerged in Portugal sought to address the specific
needs of a country in which the abovementioned constitutional constraints on the
development of private enterprise had helped to slow down this process considerably.
Once those constitutional constraints had been removed, and faced with the
imperative need to reduce a very high national debt, Portugal launched an intense
privatisation programme in the 1990s. The programme was so huge that the revenue
from privatisation during the period 1996-1999 was twice that generated between
1989 and 199557.
The framework law on privatisation was adopted in 1990, laying down the rules on
re-privatising the ownership of, or right to use, means of production and other assets
nationalised after 25 April 197458. In an initial phase, public enterprises were turned
into companies with share capital. The privatisation process could then take the form
of a transfer of shares, an increase in share capital or direct sale; by law, a percentage
of shares was to be reserved for small shareholders under more favourable terms. The
state had the option of retaining golden shares which, whatever their number, enabled
it to exercise the right of veto in decisions on changes to the Social Pact and other
decisions explicitly specified in the company's articles of incorporation. The
privatisation process speeded up sharply from 1995 onwards with the adoption for the
first time of a government programme on enterprises to be privatised or likely to be
privatised in the future. According to information published in 1999 by the Finance
57
Paz Ferreira, E. (2001), 356
58
Cf. Article 1 of Law 11/90 of 5 April 1990.
269
Ministry, at the end of the first half of 1995, 130 operations had been carried out
transferring the state shareholdings of over 100 companies.
Privatisation had several effects:

1) it significantly reduced state involvement in the economy;
2) it cut the national debt;
3) it gave a decisive boost to the capital market.
More specifically, the contribution of public enterprise to GDP (Gross Domestic

Product) fell from 19.7% to 8% between 1988 and 1997; the national debt fell from
66.5% to 62% between 1995 and 1997. In addition to these positive effects on the
Portuguese economy, it is necessary not to overlook the fact that the privatisation
process was actually brought about by external factors such as the need to meet the
convergence criteria imposed by EU integration, and was also influenced by the
political decision to break with a strong historical tradition of state involvement in the
economy59.
Economic regulation developed alongside the privatisation process: once production

had been transferred from the public to the private sector, the most appropriate forms
of state involvement had to be regulated to ensure the smooth functioning of the
competitive market. The most important case was the creation of the regulatory body
for the electricity sector (ERSE – Entidade Reguladora do Sector Eléctrico), as part
of the restructuring programme for the sector required by Community directives. In
1991 the state electricity company (EDP) was converted into a company with share
capital, and its privatisation commenced in 1997. The reorganisation of the service
led to the creation of a public electricity generation and supply network (SEP –
Sistema Eléctrico de Serviço Público) and an independent network (SEI – Sistema
59
See Paz Fereira, E. (2001), 384.
270
Eléctrico Independente), operating in competition. Decree-Law 182 of 1995 created a
regulatory authority (ERSE), which was given the task of regulating the public
network (SEP) and managing relations between the SEP and the SEI. ERSE is a
public law body with administrative and financial autonomy and its own resources,
but it is not an independent authority, being answerable to the Minister for the
Economy.
In the communications sector, the regulation process led to the creation of the
communications authority (ICP – Instituto das Comunicações de Portugal), whose
role extends far beyond that of regulation in the strict sense of the word: its tasks
include helping the government manage telecommunications policy, price-setting and
monitoring the liberalisation of the sector.
This tendency to give regulatory bodies roles more far-reaching roles was confirmed
with Decree-Law 229-B/98 of 29 September 1998 setting up the national rail
transport authority (INTF – Instituto Nacional do Trasporte Ferroviário), which
operates in tandem with the national rail network body running the infrastructure. The
nature of the national civil aviation authority (INACA – Instituto Nacional de
Aviação Civil) is equally hybrid, resembling a public enterprise body with no real
regulatory powers. The tendency to give public-utility regulatory bodies additional
non-regulatory duties was also apparent in the environmental protection field, with
the creation in 1997 of a regulatory authority for water and waste (INÁR – Instituto
Regulador de Águas e Resíduos). This body regulates, controls and oversees the
management of services run by the municipalities, while also ensuring a balance
between quality of service and cost-effective management60.
60
See Paz Ferreira,E. (2001), 409 et seq.
271
The financial systems of the municipalities and parishes are governed by Law 42/98
of 6 August 1998 on local authorities’ finances, as amended by Law 87-B/98 of
31 December 1998, Law 3-B/2000 of 4 April 2000 and Law 15/2001 of 5 June 2001.
Since January 2002, local authorities’ accounting systems, which are currently
governed by Decree-Law 341/83 of 21 July 1983, have been subject to the provisions
of the official accounting plan for local authorities (Pocal).
The Directorate-General for Local Authorities (www.dgaa.pt) regularly publishes

breakdowns of the financial situations of each municipality.
Classification of the revenue and expenditure items in local authorities’ accounts is

governed by Decree-Law 341 of 1998, which includes under current transfers:
– revenue coming from transfers from the state budget (Fundo Geral Municipal,
Fundo de Coesão Municipal, Fundo Base Municipal);
– revenue from Community funds (European Social Fund - ESF);
– revenue from other transfers.
As regards the first category, the law on local authorities’ finances defines the role of
each individual fund. The basic fund (Fundo de Base Municipal) represents the
minimum funding necessary to run the authority, while the general fund (Fundo
Geral Municipal) provides the financing needed for local authorities to perform their
tasks, taking into account the levels of activity and investment of each body. The role
of the cohesion fund (Fundo de Coesão Municipal) is to iron out the imbalances
between municipalities by helping the less-developed ones to catch up. Resources are
272
allocated on the basis of indicators reflecting the extent to which revenue and
opportunity levels fall below the national average. Parishes receive financing from
the parish resources fund, which is distributed between the three territorial units
(mainland Portugal and the autonomous regions of the Azores and Madeira)61.
In 2003, local authorities were entitled to a share of national tax revenue equal to
33% of the arithmetic mean of the revenue derived from personal income tax,
corporation tax and VAT. Thus, in 2003, a total of EUR 2,323,799,024 was divided
between the different funds as follows62:
– 4.5 % for the basic fund;

– 20.5 % for the general fund;
– 5.5% for the cohesion fund;
– 2.5% for the parish resources fund.

of the unions.
Economic cooperation is pursued via the agreements reached between the social
partners and between the social partners and the government on the adoption,
development and implementation of socio-economic measures, particularly as regards
the regulation of terms of employment, economic policy and income and price
policies. The political scene in Portugal did not facilitate the dissemination and
consolidation of socio-economic consultation, the theory and practice of which only
61
Law 42/98 of 6 August 1998 on local authorities’ finances, as amended by Law 94/2001 of
20 August 2001.
62
These data appear on website www.dgaa.pt/Participa.htm
273
started to be seen as important in the 1980s. However, it played a key role in the
policies of the second half of the 1990s after the socialist government took office63.
It is likely that the weakness and instability of Portuguese businesses during the
transition to democracy did not facilitate attempts at social dialogue, although this
method of pre-emptive resolution of conflict between the social partners and
government decisions did take on an increasingly important role. This is borne out by
the fact that, after the 1989 revision of the constitution, Article 56 of the CRP gave
trade unions the additional right to be represented on social consultation bodies. The
establishment of the Economic and Social Council, which replaced the National
Planning Council, was a further decisive step in consolidating socio-economic
consultation. Furthermore, Article 92 of the CRP not only describes the Economic
and Social Council as the “body responsible for consultation and coordination in
relation to economic and social policies”, but also stipulates that its members are to
include “representatives of the government, of organisations representing workers, of
organisations representing economic interests and families, of the autonomous
regions and of local authorities”.
The practice of consultation gives private organisations representing the social

partners and the subnational authorities (local authorities, trade unions, employers’
organisations and other economic associations) a public role and enables them to help
shape government policy. This culture of consultation in modern-day Portugal is far
removed from the corporatist democracy and representation of interests which
underpinned the 1933 constitutional system. Many commentators view social
consultation as being based on the existence of a common ethic in which promises
are expected to be fulfilled, and on genuine representativeness of the leaders of
stakeholders’ organisations.
63
See Paz Ferreira, E. (2001), 340.
274
The distribution of employment in Portugal differs somewhat from the Community
norm. Thus, farming accounts for 12.7% of employment (compared to the EU
average of 2.2%). Industry is moving closer to the EU figure (35.1% compared to
31.3%), while the service sector employs just 52% of the active population, a
percentage which is well below the EU figure of 66.5%.
The active population (including the unemployed and young people looking for their
first job) is about half of the total population (between 48 and 49%), which is in line
with the Community average. The unemployment rate is well below average, and is
one of the lowest in the entire Community (between 4 and 5%).
Fifty-five percent of the workforce belong to a trade union. While the unions have
close ties with the particular parties whose ideologies they follow, they also engage in
constructive dialogue with the government and the other social partners.
The principal Portuguese trade union is the communist-oriented General

Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores
Portugueses-Intersindical-CGTP), which accounts for over half of trade-union
membership (57%). The other main trade union is the General Workers' Union
(União Geral dos Trabalhadores - UGT), which is closer to the Socialist and Social
Democrat Parties and accounts for 33% of trade-union membership. A further 10% of
trade-union members belong to unions which are not affiliated to political parties64.
64
Cf. Il Portogallo visto da vicino, published by the Italian Chamber of Commerce for
Portugal, 2000, 21, on www.ccitalia.pt; on the relationship between the principal political
parties and the trade unions, see Farelo Lopes-F. and Freire, A. (2002), 69.
275
3.5 European integration and economic development at regional
and local level: management of the Structural Funds
Portugal is one of the countries (along with Greece, Spain and Ireland) benefiting
from the Cohesion Fund, which is granted to states whose Gross National Product
(GNP) is less than 90% of the Community average65. The Cohesion Fund is managed
by European Commission Directorate-General XIV, which approves the projects
submitted by the four beneficiary Member States. The Fund supports and facilitates
the implementation of projects in the field of transport and environmental protection.
Through the Fund, the European Community provides up to 85% of the sum to be
invested in projects. The Fund is administered at national level by the Directorate-
General for Regional Development, which is the authority which distributes the
payments (www.dgdr.pt).
From 1993 to 1999, the Cohesion Fund received around EUR 2,990 million (about
ESC 595 billion), which had already generated revenue of EUR 2,827 million
(ESC 557.6 billion) by the end of 2001.
This funding was used to implement 156 projects and distributed equally between the
transport and environment sectors. In the transport sector, 39% of the funding was
used for roads, 23% for the bridge over the Tagus, 19% for railways, 12% for airports
and the remaining 7% for ports. In the environmental protection sector, the funds
were used for water supply (35%), waste water disposal (34%), solid waste
processing (26%) and the building of the Alqueva Dam hydroelectric power station
(5%).
65
The Cohesion Fund was temporarily created by Council Regulation (EC) No. 792/93 of 30
March 1993 and definitively regulated by Regulation (EC) No. 1164/94 of 16 May 1994, as
amended by Regulation (EC) No. 1264/99 of 21 June 1999. Further information on this fund
can be found at www.dgdr.pt/Fcoesao/index.htm.
276
The following Cohesion Fund implementation period (2000-2006) was preceded by
reorganisation of the national strategy for implementing the Fund, which until then
had been managed as part of the operational programmes for infrastructure, transport
and the environment included in the third Community Support Framework (CSF III)
for Portugal. The fact that this period coincided with the CSF implementation period
and with the revision of the national and Community regulations made it possible to
coordinate and streamline distribution of the resources provided through the
European Regional Development Fund (ERDF) under CSF III (2000-2006) with the
resources provided through the Cohesion Fund during the same period.
The ESF Management Institute ((IGFSE)66 was created in 2000 to manage the
European Social Fund (ESF), which is the EU's principal financial instrument for
achieving its strategic employment policy objectives67. This is a national public body
which is responsible for the management, coordination and financial scrutiny of
measures implemented with ESF assitance. The government’s intention in setting up
this coordinating body was to ensure more consistent, flexible management and
coordination of ESF financing under the current Community Support Framework
(CSF III). As the body overseeing the management of the ESF at national level, the
IGFSE helps those responsible for managing the funds to understand and coordinate
national and Community rules on ESF implementation, and acts as the European
Commission’s Portuguese partner in managing the Fund. Under the CSF III audit
system, the IGFSE is responsible for second-level auditing of ESF activities; as well
as assessing the government’s audit system, it also monitors the decisions taken by
66
Created by Decree-Law 45-A/2000 of 22 March 2000: for information on the operation of
this body, see www.igfse.pt.
67
For the aims and objectives of the European Social Fund, which is governed by Regulation
(EC) No. 1784/1999 of the European Parliament and of the Council of 12 July 1999, see
website: http://europa.eu.int/comm/employment_social/esf/20000/index.htm.
277
the bodies managing the operational programmes and scrutinises the position of
beneficiaries. The IGFSE reports to the Secretary of State for Employment
(Secretário de Estado do Trabalho).
Since there is no regional government structure on mainland Portugal, the Structural

Funds have been managed at regional level by regional coordinating commissions
and more recently by the Regional Coordination and Development Commissions
(Comissões de Coordenação e Desenvolvimento Regional - CCDR) set up in 200368.
These commissions play a key role in selecting and promoting numerous projects to
be funded at regional level. The present five commissions – the Commission for the
North (CCDR Norte) based in Oporto, the Commission for the Centre (CCDR
Centro) based in Coimbra, the Commission for Lisbon and the Tagus valley (CCDR
LVT) based in Lisbon, the Commission for the Alentejo (CCDR Alentejo) based in
Evora and the Commission for the Algarve (CCDR Algarve) based in Faro – have to
ensure the implementation of the regional operational programmes for Portugal
provided for in its Community Support Framework and perform an essential role in
supporting and monitoring economic development in the regions. Since the 2003
reform, regional councils participate in the appointment of CCDR chairmen. The
regional council is an internal CCDR body made up, inter alia, of mayors of the
municipalities and representatives of the parishes within the region concerned.
Despite this move to ensure representation of local authorities on CCDR bodies, the
CCDR are still closely tied to the government and the Ministry of Public Works,
Planning and Regional Administration.
68
Decree-Law 104/2003 of 23 May 2003 set up the Regional Coordination and Development
Commissions, which took on the role of the CCR: the new commissions are decentralised
units of the Ministry of Public Works, Planning and Regional Administration (Article 1).
See point 1.1.2 above for the changes to their organisation and role.
278
Now that the CCDR have been given an important role in coordinating the Structural
Funds' regional development activities, observers feel that the development and
increasing use of the system whereby Community aid is managed by bodies that
remain under the authority of government departments has in fact helped to revive
state involvement in the economy, which had fallen dramatically following the large-
scale privatisations of the 1990s69.


Demand for public services began to grow dramatically in the 1980s, and has
continued to develop as the structure and needs of Portuguese society have changed.
In the 1950s, the average age of Portugal’s population was lower than that of other
European countries; by the end of the 1990s, however, the proportion of the total
population over the age of 65 was greater than that under 15. Life expectancy rose
substantially, from 60 and 66 (for men and women respectively) in 1960 to 73 and 79
in 2001. Population ageing has been caused by the fall in the birth rate (11%) and in
the female fertility rate70. There have been considerable changes in family life,
largely related to women’s emancipation. Women now account for half of the
employed active population, compared to just 20-25% in 1960. In 1998, 56% of
university students were women; this figure is slightly higher than the figures for
Sweden and France. A breakdown of the number of women in employment in 1995
69
Cf. Mozzicafreddo, J. (2000), 149
70
Cf. Barreto, A. (2002)
279
according to the level of study achieved revealed that 91% of women with degrees or
diplomas were in employment, while the European average was below 80%71.
Between 1960 and 1999, the number of church weddings fell. In the north and the
centre there was a greater tendency towards marriage and less of a tendency towards
cohabitation. In Lisbon, the Tagus Valley, the Algarve and, to some extent, the
Alentejo, however, there was a higher proportion of unmarried unions, a significant
number of children born out of wedlock and a lower marriage rate. As regards the
composition of the family unit, a clear tendency has emerged in recent years towards
the nuclear family; most single-parent families are headed by a woman and, despite
the very few forms of support available for mothers with small children, 70.8% of
lone mothers are in employment; this percentage is much higher than the figure for
women in childless relationships72.
National health service. While society has developed at a remarkable rate over the
past 30 years of democracy, the efficiency of the production and public-service
systems is still well below the European average. With the nationalisation of the
health system, a potentially free, state-funded service was created and, despite
changing health policies, there is no doubt that the increase in life expectancy at birth,
the fall in infant mortality and the rise in the average age at death are evidence that
the standard of living in Portugal has improved considerably over the past 15 years73.
Education and training. Improved schooling has had an equally decisive impact.
Public spending on education increased from 3.5% of GDP in 1985 to 5.15% in 1991,
71
See Torres, A. (2003), 243 et seq., 254
72
Cf. the data recorded by Torres, A. (2003), 251
73
Cf. Mozzicafreddo, J. (2000), 57
280
producing a substantial increase in the number of people benefiting from nursery,
vocational, secondary and higher education74.
Law 88 of 1913 allowed Portuguese municipalities to organise and manage public

services at local level by setting up "municipal enterprises". These bodies were
governed by public law and were part of the municipality’s internal organisation.
In 1977 (Law 79/1977 of 25 October), it became possible to set up municipal

enterprises which were separate from the municipality in terms of legal personality
and capacity, although still subject to municipal controls. Municipal enterprises
became widespread, particularly after the adoption of Law 58/1998 regulating the
setting-up of municipal, inter-municipal and regional enterprises75.
The municipal enterprises managing the principal public services can be divided into
those which perform an activity that is merely of public interest and those which have
been set up to deliver a public service. Some of the enterprises hold a local monopoly
and perform economic activities that are not open to private companies (i.e. water
collection, treatment and distribution; collection, treatment and recycling of urban
waste water; collection and processing of solid urban waste; rail transport operated as
a public service).
74
Cf. Mozzicafreddo, J. (2000), 63, table 2.15
75
Rebordão Montalvo, A.(2003), 180, points out that in 1999, there were 34 municipal and
inter-municipal enterprises and 143 companies in which municipalities owned share capital;
by October 2001, there were already 114 of the former and 187 of the latter: in total,
269 municipalities were involved. In addition to these, there were 58 limited companies,
35 cooperatives, 21 foundations and 19 banks, taking the total number of companies and
bodies with municipal involvement to 434.
281
The current legal system governing municipal enterprises managing public services is
laid down by Law 58/98 of 18 August 1998 (Framework law on municipal, inter-
municipal and regional enterprises), which endeavoured to reconcile the need for
efficient municipal economic initiative with the need to ensure order and
transparency in the way the sector is managed76. This law distinguishes between
public enterprises, in which a municipality (or administrative region) owns all the
capital; publicly-owned enterprises, in which municipalitites or associations of
municipalities (or administrative regions) own capital alongside other public bodies;
and publicly-controlled enterprises, in which municipalities, associations of
municipalities (or administrative regions) own the majority of the capital and private
bodies hold a minority share.
This wide range of models for managing local public services has helped to transform
the traditionally bureaucratic, archaic management of these services by providing
more flexible arrangements that are better geared to the differing needs of local
authorities77.
The frequency with which urban public transport management, waste collection and
treatment and water collection and distribution services are entrusted to private
companies is further evidence of Portugal’s openness to the private sector. There are
also a number of partnerships with private companies based on service contracts for
the upkeep of parks, surveillance and security of public buildings, and organisation of
school transport.
Cooperation between the public, private and social sectors at local level is ensured by
strategic consultations between municipal chambers, local businesses and other
76
Cf. Pacheco de Amorim, J. (2000), 42
77
See Paz Ferreira, E.(2001), 290
282
associations on the framing of projects of municipal or inter-municipal interest. Thus,
municipal authorities are increasingly playing a leading role in economic
development and promoting local community involvement in key local projects78.
The autonomous regions also have independent control of their assets and can
therefore set up their own enterprises. In practice, however, this independence has
been greatly curbed by the framework law on privatisation, which made the
government responsible for the decision to sell off nationalised public enterprises,
including those performing their principal activity within an autonomous region79.
Private enterprise will have an increasingly important role to play in the organisation
of the health service. Private-sector service providers are increasingly taking on a
leading role as the sector develops, especially in the field of specialised medicine,
diagnostic methods, customised treatments and tests80. On a more general note, this
raises the question of the role of the welfare state (Estado-Providência) in the
management of public services: redefining the state’s role does not mean dismantling
the welfare state, but striving to give it a key role in the regulation of services rather
than in their delivery81. Regardless of the question of the respective roles of the
private and public sectors, the Portuguese health system is lagging well behind other
European countries in the use of new information technology and
telecommunications. Precisely with a view to overcoming these shortcomings, a
series of projects to computerise the health system form part of an information
society action plan: these projects include creating a healthcare portal, connecting
ambulances to accident and emergency units, extending the use of electronic
78
See Rebordão Montalvo, A.(2003), 193
79
Paz Ferreira, E. (2001), 291 et seq.
80
See Mozzicafreddo, J. (2000), 59 et seq.
81
Mozzicafreddo, J. (2000), 67
283
diagnosis, and developing electronic identity cards to enable the national health
service to identify each patient82.


and results)
One of the priorities of the current government’s programme is to promote an

enterprise culture and conditions favourable to technological innovation, which is
essential for the achievement of a new and more competitive development model.
In order to implement and monitor this project based on information techology

innovation and new forms of communication, government resolution 135/2002 of
20 November 2002 set up a special government-sponsored Innovation and
Knowledge Mission Unit (UMIC) (http://www.umic.pcm.gov.pt/UMIC/). This body is
responsible for supporting and coordinating government initiatives in the field of
innovation, the information society and eGovernment. The UMIC operates under the
direct responsibility of the minister attached to the prime minister's office and has the
task of implementing mechanisms for the effective promotion of an environment
conducive to innovation. Its duties include drawing up action plans for technological
innovation and computerisation of the public administration.
Innovation plan. The integrated strategy for promoting innovation is based on a series
of projects centred around four pillars:
82
Cf. 2003 Information society action plan, 11, at: www.umic.pcm.gov.pt/Umic/
284
– advanced skilling of human resources;
– access to and dissemination of knowledge;
– stimulation of the innovation network;
– promotion of new market products and services.
Information society action plan. The main objectives of the information society
action plan are as follows:
1) making new information and communication technologies accessible for all to use,
not least in order to promote Portuguese language and culture as widely as possible;
2) promoting IT training and culture;
3) ensuring efficient public services in order to increase active participation in the

exercise of citizens’ rights;
4) developing electronic tools to improve communication between the public

institutions and the citizen, and between the public institutions and the business
world;
5) providing a more effective health system by setting up an online health service,

including a health information network, and introducing electronic cards for all
healthcare users;
6) disseminating e-commerce and transactions, with particular focus on small and

medium-sized businesses;
285
7) developing a culture portal to display information from a wide variety of public
and private bodies, and a knowledge portal connecting up national and international
libraries.
Under the plan, the autonomous regions of the Azores and Madeira are to draw up
development strategies that take account of the national context and their own
specific geographical and economic situations.
eGovernment action plan. This action plan establishes a number of priorities, which
include: 1) improving the services provided to the public; 2) achieving an efficient,
modern public administration; 3) connecting the entire administration up to
broadband; 4) rationalising public administration communications costs; 5) a national
e-commerce programme; 6) modernising local public administration; and 7) an
information campaign relating to communications initiatives undertaken in the
various government departments and public offices83.

networks.
Portugal has not yet experimented with e-voting. A project for e-voting in the
forthcoming European elections is being developed and will be finalised from
January 2004. This pilot project will run in a limited number of parishes and is based
on the "voto electrónico presencial" technique tried out in Brazil: instead of voting at
the polling station in the traditional manner, each voter registers his or her vote via an
electronic terminal. At present, e-voting via the Internet is inconceivable, not just
because of the small number of Portuguese households which have access to or use
83
Cf. eGovernment action plan, at www.umic.pcm.gov.pt/UMIC/
286
the Internet but, first and foremost, because in this relatively young democracy, the
physical presence and participation of the voter at the polls is still seen as an integral
part of exercising the right to vote.
As regards the structural conditions necessary for the dissemination of e-voting, the
introduction of ICT in Portugal is in a dynamic, transitional phase. The results of a
survey commissioned by the UMIC and published in September 2003 confirm that
the Portuguese are gradually starting to use the Internet for both cultural/educational
and work-related purposes. Half of the Portuguese population own a computer (53%,
including 46% of households) and, of these, a large proportion (82%) are frequent
users. Only 39% of the population use the Internet, but an average annual increase of
25% was recorded between 2000 and 2003; 77% of users use the Internet frequently.
Twenty-eight percent of families have an Internet connection and, here too, there was
an annual increase of 52% between 2000 and 2003; only 10% of families also have
broadband (high-speed Internet access), but it should be noted that this figure is three
times the 2002 figure. The rise in Internet access is linked to professional
requirements (23%), the need to provide children of school age with a research tool
(20%) and the need to keep up with technological advances in society (20%). The
number of Portuguese conducting e-commerce transactions remains low (5%)84.
As regards local media networks, there are regional television channels and many
regional and local radio stations. The public television company RTP’s first
television channel was launched in 1957 and began to broadcast to the autonomous
island regions in the 1970s: broadcasts to Madeira started in 1972 and to the Azores
in 1975. Regional radio stations cover different districts (spanning several
municipalities) in the Azores and Madeira, while municipal radio stations only
84
The results of this survey appear on the UMIC website:
www.umic.pcm.gov/UMIC/Media/SaladeImpresa/inquerito_internet_2003.htm; as regards
UMIC's role and initiatives, see point 5.1 above.
287
broadcast to one municipality. There are two regional radio stations on the mainland,
which are both private and have been broadcasting since the end of 1990. The
Lisbon-based Radio Nostalgia covers the south of the country and specialises in
music from the 1950s and 1960s. The northern half of the country is covered by TSF,
a company born of a joint venture between the local radio stations in Lisbon and the
regional stations in the north; it broadcasts news, music and sport. There are around
300 registered local radio stations in the coastal areas, but they are unable to
broadcast to the whole country. The coastal areas of Aveiro, Lisbon, Oporto and Faro
have a lot more stations than areas inland such as Beja, Portalegre, Guarda, Castelo
Branco and the islands: this reflects and confirms the fact that the coastal areas are
still more economically developed and more dynamic than areas inland85.
A government web-portal (www.lojadacidadao.pt) has been set up with the aim of

using new information technology to improve public services. This portal contains a
series of links to the various departments which issue certificates, and a specific site
for public information. The creation of the portal was accompanied by a large-scale
trial of the "one-stop shop" management model. The project began in October 1997
when the government set up a five-member team (reporting directly to the Secretary
of State for Public Administration and Administrative Modernisation) to oversee the
setting-up of one-stop shops in certain towns and cities, where users would be able to
request and access a range of services. This was part of a wider strategy to modernise
the public administration and decentralise and streamline use of the services.
85
In 2002, 354 local radio stations were registered, 318 of which were on the mainland, 22 in
the Azores and 14 in Madeira: see www.ics.pt/verfs.php?fscod=388.
288
The project was first piloted in Lisbon and Oporto. The siting of the one-stop shops
was decided on the basis of a number of criteria, including the location of the easiest
access routes to the city, the accessibility of public services, and parking availability.
The services managed by these centres include water, electricity and gas supply,
telephone connections, vehicle registration, passport issue and social security and
health services. There are currently six one-stop shops in Portugal (in Lisbon, Oporto,
Aveiro, Viseu, Setúbal and Braga). There is also a site (www.infocid.pt) from which it
is possible to access information on services available online, including the Serviço
Público Directo (http://spdirecto.infocid.pt), to which online applications can be
made for civil and commercial certificates.
The central government was the driving force behind the streamlining of public
services: this particular project was spearheaded by the prime minister’s office, and
the department responsible for its implementation is the Ministry for State Reform
and Public Administration86.
Interlinkage between IT tools, new technology and streamlining public services is a

priority of the current government, which established the eGovernment action plan
developed by the Innovation and Knowledge Mission Unit (UMIC)87. The objective
of providing high-quality, efficient public services to individuals and enterprises is
one of the seven pillars of the action plan. Projects contributing to the achievement of
this objective include creating a public portal; streamlining communications costs;
promoting e-commerce; creating an administration portal; a single, integrated social
security system; a single vehicle registry; and an integrated civil registry system. The
creation of a public portal forms part of an overall strategy for the public
86
Cf. Timonen, V. - O'Donnell, O. - Humphreys, P.C. (edited by ), 2003, 48.
87
For information on the role and responsibilities of the Innovation and Knowledge Mission
Unit (UMIC) set up as part of the prime minister’s office, see point 5.1 above; the
eGovernment action plan is published on the UMIC website: www.umic.pcm.gov.pt/UMIC/.
289
administration portal (named "Portugal.gov.pt") and is to be launched in December
2003; the project aims to provide the public with more efficient, faster services.
Clearly, the objective of creating efficient services which are increasingly in tune
with the public’s needs involves local authorities: where eGovernment at local level
is concerned, it is the municipalities which have to provide more user-friendly,
integrated services. To this end, in 2003 it is planned (i) to revamp the digital cities
and regions project, which is one of the objectives of the information society action
plan88, (ii) to register the basic electronic services which local authorities will be able
to use in the future, and (iii) to enlist the support of information technology in the
decentralisation process. The provision of electronic facilities for the delivery of
grassroots services (local eGovernment) is perfectly in keeping with the approach
enshrined in the constitution, based on the principles of decentralisation and
subsidiarity89.
88
See point 5.1 above.
89
See point 1.1.1 above.
290
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en el ordenamento portugues, in Perspectivas Constitucionais. Nos 20 anos da
Constituição, Miranda, J., Coimbra, Coimbra Ed., 703 et seq.
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estudo de caso: o arquipélago dos Açores, Lisbon.
Barreto, A. (1999), Portugal: Democracy through Europe, in Regional integration

and democracy: expanding on the European experience, edited by Anderson, J.J.,
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Barreto, A. (2002), Mudança social em Portugal, 1960/2000, Working Papers,

Instituto de Ciências Sociais da Universidade de Lisboa (ICS), October 2002:
www.ics.ul.pt/publicacoes/workingpapers/index.htm.
Baum, M. and Freire, A. (2001), Political parties, cleavage structures and

referendum voting. Electoral behaviour in the regionalisation referendum, in South
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Between europeanisation and local societies: the space for territorial governance,
edited by Bukowsky, J., Piattoni,S. Smyrl, M., Lanham Md., Rowman & Littlefield.
Costa Lobo, M. and Magalhães, P.C.(2001), The Portuguese Socialists and the third
way, Working Paper: www.ics.ul.pt/publicacoes/workingpapers/index.htm.
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Costa Lobo, M.( 2001), The rule of political parties in Portuguese democratic
consolidation, in Party Politics, 7(5), 643 et seq.
Farelo Lopes, F. and Freire, A. (2002), Partidos políticos e sistema eleitorais. Uma
introdução, Oeiras, Celta Ed.
Freire, A. and Baum, M. (2002), Election order and electoral cycles in democratic
Portugal, 1975-2001, Report presented to the Annual Meeting of the American
Political Science Association, Boston, 29 August – 1 September 2002:
http://apsaproceedings.cup.org/Site/abstracts/0144/014004BaumMichae.htm.
Freire, A. and Baum, M. (2003), Referenda voting in Portugal, 1998: the effects of
party sympathies, social structure and pressure groups, in the European Journal of
Political Research, 42 (1).
Freire, A.(2003), Comportamientos eleitorale em Portugal, in El sistema político de

Portugal, Siglo XXI, edited by Barreto, A., Gomes, B., Magalhães, P., Madrid, 113 et
seq.
Gomes Canotilho, J.J. (2002), Direito constitucional e Teoria da Constituição, 5th

edition., Coimbra, Almedina.
Leitão Marques, M.M. (1991), A Constitução económica depois da segunda revisão

constitucional, in Revista de direito publico, 32.
Martins, H.(1998), Federal Portugal: a historical perspective, in the Portuguese

Studies Review, 7, No. 1, 13 et seq.
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Maxwell, K. and Monje, S.C. (editor) (1991), Portugal: the constitution and the
consolidation of democracy (1976-1989), Camões Center Special Review, No. 2,
New York.
Maxwell, K. (1995), The making of Portuguese democracy, Cambridge University

Press.
Miranda, J. (1994), Le Regioni autonome portoghesi, in Federalismo e regionalismo

in Europa, edited by D’Atena, A., Milan, 241 et seq.
Miranda, J.(1996) (editor), Perspectivas constitucionais. Nos 20 anos da Constituição

de 1976, Coimbra.
Mozzicafreddo, J.(2000), Estado-Providência e Cidadania em Portugal, Oeiras,

Celta Editora, 2nd ed.
Opello, W.C. (1993), Portuguese regionalism in the transition from the Estado Novo
to the Single Market, in The regions and the European Community: the regional
response to the single market in the underdeveloped areas, Leonardi, R., London,
Frank Cass, 162 et seq.
Pacheco de Amorim, J. (2000), As empresas públicas no direito português. Em

especial, as empresas municipais, Coimbra, Almedina.
Paz Ferreira, E. (1996), A Constituição económica de 1976: "Que reste-t-il de mon

amour"?, in Perspectivas constitucionais. Nos 20 anos da Constituição de 1976,
Miranda, J., Coimbra, vol. I, 383 et seq.
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Paz Ferreira, E. (1997), O redimensionamento dos poderes económicos e financeiros,
in Estudos de direito regional, edited by Miranda, J. and Pereira da Silva, J., 569 et
seq.
Paz Ferreira, E. (2001), Direito da economia, Lisbon.
Piergigli, V. (1998), Il decentramento territoriale nell’ordinamento portoghese: una

soluzione (ancora) parziale e (sempre più) differenziata, in Stati nazionali e poteri
locali. La distribuzione territoriale delle competenze. Esperienze straniere e tendenze
attuali in Italia, edited by Gambino S., Rimini, Maggioli, 1038 et seq.
Rebordão Montalvo, A. (2003), O processo de mudança e o novo modelo da gestão

pública municipal, Coimbra, Almedina.
Sousa Franco, A. and D'Oliveira Martins, G. (1993), A Constituição económica

portuguesa. Ensaio interpretativo, Coimbra.
Timonen, V., O'Donnell, Humphreys, P.C. (editor) (2003), EGovernment and the
decentralisation of service delivery, Institute of Public Administration, Dublin.
Torres, A. (2003), Famiglia, matrimonio e divorzio in Portogallo: tendenze

contemporanee, in La famiglia in Europa, edited by Rossi, G., Rome, 243 et seq.
294
USEFUL LINKS
Regional Assembly of the Azores www.alra.pt
Regional Assembly of Madeira www.alrm.pt

National Association of Portuguese Municipalities www.anmp.pt
National Association of Parishes www.anafre.pt
Metropolitan Area of Lisbon www.aml.pt
Metropolitan Area of Oporto www.amp.pt
Government www.governo.gov.pt
Parliament www.parlamento.pt
Constitutional Court www.tribunalconstitucional.pt
Economic and Social Council www.ces.pt
National Statistical Institute www.ine.pt
National Election Commission www.cne.pt
Directorate-General for Local Authorities www.dgaa.pt
Regional Coordination and Development www.ccr-ltv.pt
Commissions www.umic.pcm.gov.pt
Innovation and Knowledge Mission Unit
Contacts in institutions:
Delegation to the Committee of the Regions: Prof.
Virgilio Rapaz
Prof. Jorge Miranda (University of Lisbon)
Dr Antonio Araújo (Assistant at the Cabinet of the
President
of the Constitutional Court)
Dr André Freire (Researcher, ISCTE – Lisbon)
295
296
UNITED KINGDOM
INTRODUCTION
Regionalisation, federalisation and devolution have also affected the United

Kingdom. The centralised form of government that had been characteristic of this
country for the previous thirty years has, since the second half of the 1990s,
undergone significant changes in the direction of federalism. In this sense, devolution
in Scotland and – albeit in a more diluted form – in Wales has highlighted the
profound changes that have taken place in the shape of the country and of its
government. These changes are further evidenced by the decisive steps taken since
2002, when the Government published its white paper on governance.
This highlighted the emergence of entirely new needs in respect of the coordination
and development of these types of autonomy: metropolitan local government was
revived, developed and strengthened (in particular the Greater London Authority);
greater interaction between associations, trade unions and political parties was
promoted, and all of these were put on a stronger regional footing (a trend that could
favour embryonic regional parties, which can be clearly identified even within the
two major political parties, Labour and Conservative). There is an increasing
awareness of the value of cooperation and social partnership as an instrument of
government and as a means of achieving broader, more effective governance.
These policies thus reflect a new kind of politics. Devolution has not led to
fragmentation. Rather, the new arrangements have facilitated greater integration of
and interaction between all the players (both institutional and socio-economic) in the
different territorial entities that make up the United Kingdom.
297
Scotland is certainly the region that has received the greatest degree of autonomy as a
result of devolution, although now – about five years after the first Act on the subject
– some research bodies are asking whether the current situation really constitutes an
improvement.
At the same time, it must be emphasised that this state of affairs has stimulated
greater civic participation, possibly helped by spin-offs from technological progress;
electronic voting and the development of networks at local level open up new
avenues that could revitalise democratic channels that currently seem to be dying out.
As a result local and regional economic development seems to be flourishing,

particularly in the wake of the Thatcher era of privatisations at national level. Indeed,
it seems to have benefited from the treatment, in the form of the business-friendly
legislative and regulatory environment that has been in place in recent years, as well
as from incentives for public-private cooperation and, as a result of the steady process
of European integration, from increasingly carefully-targeted use of the Structural
Funds.
The United Kingdom appears to be a country which, following the first stage of
devolution, which was largely focused on legislation, is now about to enter upon a
second stage. This would be focused on promoting a network-based model of open
society. The idea would be to bring together – for example, in the provision of public
services – the public sector with the private, the social partners with the authorities,
and initiatives from elected politicians with those of local and other interest groups,
in a way that promotes the actors who are best placed to understand local needs in the
regions that are stronger, because their autonomy is constitutionally (and thus legally)
recognised, and richer, because their autonomy enables them to manage their own
affairs more wisely. Therefore, the perspectives for this country are very interesting,
even in comparative terms, in that they promise to open up new opportunities within
298
this form of devolved state, enabling more room to be created for a polycentric
democratic model that would be able to bring together the institutional world with the
socio-economic one, but without breaking the bonds that hold the nation state
together.
I. THE EVOLUTION OF FEDERAL/REGIONAL DYNAMICS THE


profile
The United Kingdom is a constitutional monarchy, the result of a long institutional

process, and does not have a written constitution. The legal basis for Britain’s
constitutional framework can be found in a number of laws that govern constitutional
matters, in the customs of the institutions, and in case law. Among these laws are the
Magna Carta of 1215, the Bill of Rights of 1688, and the Act of Settlement of 1700,
as well as the Act of Union with Scotland (1706), the Parliament Acts of 1911 and
1949, and the Representation of the People Act 1983.
Great Britain is the product of the unification of the various kingdoms of the island,
whereby the English crown progressively took in the areas that are now Wales (by
means of a lengthy process concluded in the 16th century), Scotland (Union with
Scotland Act 1707) and Ireland (1801).
Government has been characterised by a high degree of centralisation1. The unitary

structure did not really change until the beginning of the devolution process. The only
political and institutional debate about the organisation of government related to local
1
See Loughlin, J. ( 2001), 37 ff.
299
government. Before the process of devolution, the central government maintained a
predominant role over local, publicly-elected bodies. The Secretaries of State for
Wales, Scotland and Northern Ireland, who were appointed by the Prime Minister,
respectively had powers of supervision and control over elected county councils in
Wales, regional councils in Scotland, and district councils in Northern Ireland.
Territorial arrangements in England, on the other hand, were organised along

different lines. Rather than a Secretary of State, there was a Minister for the
Environment, Transport and the Regions, who had powers of supervision and control
over the 39 elected County Councils and, until the 1985 Local Government Act
abolished them, the six Metropolitan Councils and the Greater London Council. The
picture of local government in England was completed (and, to a large extent,
remains so) by numerous District Councils (metropolitan or otherwise) and by the 33
London boroughs.
The British form of government revolves around the Prime Minister. Within the
context of the two-party system, the Parliamentary form of government evolved
firstly towards a Cabinet model, then into a premiership one2. The leader of the party
that holds the majority after the national general election becomes the head of the
executive. This role confers considerable powers on him or her. For example, the
Prime Minister appoints and dismisses ministers and proposes the dissolution of the
House of Commons to the Queen. In recent British history (except in 1974), the
winning party has always enjoyed an absolute majority in this chamber thanks to the
single-round, single-member, first-past-the-post electoral system. The House of
Lords, on the other hand, is not elected and is not directly involved in Government
2
Caravale , G. (1997), passim.
300
activity3. A strong role is given to the leader of the losing party, who enjoys certain
privileges as Leader of the Opposition and the chair of the Shadow Cabinet, in which
the Opposition prepares its alternative government.

developments
In recent years, the constitutional structure of the United Kingdom has undergone
profound changes as a result of devolution, which has shown itself to be a broad,
wide-ranging process, rather than a one-off event4.
The subject of devolution, meaning the conferment of powers on territorial bodies

within the Kingdom, is not a recent phenomenon, but has been a recurrent political
theme in the country’s history, although it has only been in the late 1990s and the first
few years of the new century that there have actually been significant moves in this
direction.
A number of political changes at national level were very important to this process.
During the last years of the Conservative government, devolution had effectively
been removed from the political agenda5. It was only the policy work of the Labour
Party and its electoral success in 1997 that permitted the process of institutional
3
The upper house is made up of hereditary members and, since 1958, of members nominated
for life by the Monarch on proposals from the Government. A committee of the House of
Lords, made up of the Law Lords, carries out the role of an appeal court in civil and criminal
cases.
4
See Davies, R. (1998); Hazell, R, Young, S, according to whom there is no reason to believe
that the changes that have taken place in the last three years will not continue. It is certainly
possible that the powers devolved to these regions could be extended or reduced over time.
5
See Hogwood, B.(1995), 267 ff.
301
transformation to be set in motion6. In 1998, the Westminister Parliament, thanks to a
sizeable Labour majority and the action of Prime Minister Blair, passed the Scotland
Act, the Government of Wales Act and the Northern Ireland Act, and, the following
year, the Greater London Authority Act. This had a significant impact both on the
structure of local and regional government and on the country’s constitution itself.
The introduction of devolution into the British system has had a significant impact on
the fundamental laws that used to govern the Kingdom. The Acts passed by the
Westminster Parliament have significantly altered the structure of government in the
United Kingdom and have undermined the basis of the supremacy of the national
Parliament.
Scotland and Wales initially pursued similar political and legal paths. In 1997, the
outcome of popular referendums in those two parts of the United Kingdom favoured
the creation of parliaments which would be autonomous of London. In Scotland, the
vote in favour was decisive, at 74.5%7 of votes cast, but reached just 50.3% in
6
The Labour Party manifesto New Labour, New Life for Britain referred to institutional
reform, including, among other things, devolution. Specifically, this meant conferring
greater legislative and administrative powers on Wales and Scotland, which, as stated in the
White Paper on Scotland’s Parliament, are “regions with strong national identity”. When the
Labour government took office, it made a commitment to launch the process of devolution
of powers to a Welsh and a Scottish Parliament, and to provide for an overhaul of regional
arrangements in Britain and of the structures of regional and local authorities. See Morrison,
J., (2001); Blackburn, R., Plant, R. (Eds) (1999).
7
Unlike Wales, turnout was very high (60.1%), handing a comfortable victory to the pro-
devolutionists. The nearly four million people entitled to vote were also asked to vote in a
second referendum on local taxation. On this second question, only 63.5% voted to give the
Scottish Parliament tax-varying powers.
302
Wales8; the results allowed the process of passing the respective Acts on devolution
to be speeded up.
Following this phase, the devolution process in the two parts of the country
developed in very different ways. The content of the laws passed by the Parliament in
London set out the different levels of autonomy that would be granted to those two
“regions” of the United Kingdom. According to the provisions of the Scotland Act,
the Scottish Parliament is empowered to pass primary legislation on certain devolved
matters, and can therefore pass its own Acts on matters that are not reserved for the
central legislature. In addition, it can adopt secondary (also known as delegated or
subordinate) legislation in those same areas of primary legislative competence.
The Edinburgh Parliament, which began work on 1 July 1999, can therefore legislate,
among other things, on education, local government, tourism, economic
development, sport and agriculture, as well as in connection with both civil and
criminal law. This latter power also reflects the existence of an independent legal
system and judiciary (Scots law).
In Wales, devolution has taken a very different form. The Welsh Assembly does not
have legislative powers, but has the power to adopt delegated legislation on devolved
matters, such as health, education, culture, agriculture, tourism, transport, and
development. The level of autonomy granted to the National Assembly for Wales is
even more limited if the relationship with the Welsh Office in London is taken into
8
In Wales, a little more than 50% of the 2.2 million electors entitled to do so took part. There
are two reasons for this. Firstly, Wales, unlike Scotland, has never really had a history of
independence. Secondly, the southern part of Wales is heavily anglicised, to the extent that
the people of South Wales are referred to as “Wenglish”. It was these latter, fearing that the
“pure” Welsh would leave them a minority in a Welsh parliament, who helped to reduce the
participation in the vote, despite it being supported by Labour, the Liberal Democrats and
the Welsh nationalists.
303
consideration. Recently, however, an independent commission was set up under the
chairmanship of Lord Richard to identify areas for improvement in the limited
autonomy of Wales, with particular reference to the lack of primary legislative
powers. This commission completed its work at the end of 2003.
Moreover, the very institutional structure of the type of government provided for in
the 1998 Act is undergoing noticeable changes. There is an increasing separation of
powers between the Assembly and the Assembly Secretaries; these latter are often
incorrectly referred to as Ministers, and the Executive Committee, as it should be
called by law, is often simply called the Welsh Cabinet9.
The situation in Northern Ireland cannot be compared to the other two "regions" that
benefited from the process of devolution in 1998. The considerable social and
political problems in this part of the country meant that it was not possible to follow
the same route of setting up and empowering institutions without first having reached
a peace agreement between the government in London, the Nationalists, and the
Unionists. The historical events linked to Home Rule have over the years paved a
tortuous road to the present situation, as the most recent developments have
demonstrated.
In 1998, an agreement (known as the Good Friday Agreement or Belfast Agreement)

was reached that enabled real devolution to begin. This was signed by the British
government and the main local political parties, and was then the subject of a popular
referendum in which 71.1% of voters supported the multilateral agreement.
Devolution was enshrined in the Northern Ireland Act 1998, on the basis of which the
Northern Ireland Assembly received the power to adopt primary and delegated
9
Hazell, R., 3-4.
304
legislation in respect of some matters that were not reserved for the Westminister
Parliament. However, the devolution process was suspended in October 2002, a year
after the Assembly was set up, because the British government lost confidence in
Sinn Fein following an episode of spying and the departure of the nationalist party
from the regional government. From that moment, the devolved institutions were
suspended, and this crisis was not resolved in time for May 2003, when Prime
Minister Blair, faced with the non-compliance with the agreement by nationalist
forces, postponed the Assembly elections10.
Devolution, then, is a complex and diverse process. Far from being concluded by a
single act of legislation, it requires constant, ongoing political support. This does not
just apply to situations such as Northern Ireland, where considerable tensions exist,
but also to other areas.
The most striking characteristic of devolution in the United Kingdom is the very
varied nature of the forms of autonomy granted by the central government. The
powers that have been conferred vary both qualitatively and quantitatively, which has
led to an “asymmetrical process of devolving powers”11.
In addition to the differences in the prescribed doses of devolved powers,

fundamental differences in the way devolution has been experienced in different
areas of the United Kingdom arise from the nature of the driving force behind it: in
Scotland and Wales, this had a national focus, whereas in Northern Ireland, it was
compounded with a religious element.
10
In May 2003, elections should have been held for the Northern Ireland Assembly, following
six months of inactivity of that body due to the intensification of terrorist activities in the
country. However, Prime Minister Blair postponed the elections due to the strong
disagreements with Sinn Féin and the IRA concerning the implementation of the Good
Friday Agreement.
11
See Bradbury, J., Mitchell, J. (2002) 299 ff.
305
In London, the experience was again different. Here, the demand for autonomy was
born out of a break with the centralised model of government, with a view to moving
towards regional rather than national power, including for England. (See
paragraph I.3.)
The process of change in the British system of government is beginning to include

England in the logic of devolution, with proposals for reforming its territorial
government. As early as 1998, Parliament adopted the Regional Development
Agencies Act, which created the nine regions of the country, each one having a
development agency appointed by the Government.
In 2000, the UK Parliament passed the Local Government Act. Where England was
concerned, this piece of national legislation covered the County Councils, the District
Councils, the London Borough Councils, the Common Council of the City of
London, as well as the Scilly Islands Council; in Wales, it covered the County
Councils and the Borough Councils. The Local Government Act 2000 gave local
authorities (i.e. those described in paragraph I) the power to pursue whatever
activities they considered necessary to the economic, social and environmental
improvement and promotion of their own area. It also set out the regulatory
framework for the aspects relating to the organisation and powers discussed below in
part II.
A decisive step was taken in July 2002 with the White Paper on Regional
Governance, Your Region, Your Choice, published by the Government, which
provided for the possibility, for those regions who wanted it, of directly electing their
respective Assemblies. The White Paper was published in May 2002 and, in the
following months, was the subject of a heated debate between the government in
306
London and the interested parties. These latter were able to submit their comments
and views to the central government on the draft reforms and the proposed stages.
However, the problems that the White Paper faces in building an English regional
model seem to be significant. Firstly, the proposals seem to give limited economic
resources to territorial bodies; furthermore, a reform of this type will necessarily have
an impact on the interests of local government and of big cities. The destiny of the
English regionalisation project is therefore highly uncertain12.
The White Paper provided for a specific political process divided into several phases:
the first involved a survey to assess how interested the public was in regionalisation;
thus, this step of consulting the relevant population was introduced in addition to the
model that had previously been applied to devolution. Only, subsequently, might
there be a phase involving a full-scale referendum. Only if the referendum gave a
positive result would Parliament then act to pass a law regulating the new Regional
Assemblies.
Following the results of telematic surveys13, the referendums provided for by law will
be held in only three regions in the north of England. In the autumn of 2004,
referendums will he held in the North East; Yorkshire and the Humber; and the North
West, where the public will be asked to vote on the creation of an elected Regional
Assembly with powers over (among other things) employment, public health,
transport, culture, tourism, and sport.
12
See the Devolution Briefing on The English Regions Debate: What do the English Want?, 3
July 2003, part of the research programme on Devolution and Constitutional Change, op. cit.
The text collates the various expectations expressed by the citizens of the eight English
regions with regard to referendums.
13
cfr. www.local-regions.odpm.gov.uk/consult/region-assembly/01htm
307
The Assembly will be an opportunity, according to the Office of the Deputy Prime
Minister, for the regional community to participate in decisions that affect it. The
Assembly will be elected by a proportional system, which, whilst not breaking with
the UK’s majoritarian tradition, will make it much more representative and thus
better able to carry out its intended role as a place for participation.
It is foreseen that the elected body will be able to use a progressively increasing
budget made available by the Government. Initially, this will be around £350 billion,
in line with current by central government spending, and will then rise to a higher
figure. However, it is not public spending that is the major issue here, because what is
really new about the creation of a democratically-elected Regional Assembly is that
policies that are currently under complete control of central government would in
future be pursued with the participation of the communities they affect. The issues
that the Assembly will deal with are: employment, housing policy, urban planning,
transport, health, tourism, sport, and the environment. The new Assembly will have
to comprise at least 25 members, a sufficient number to be able to represent the
various parts of the region. The proportional electoral system will most probably
ensure political pluralism and avoid the risk that a single party will have overall
control of the assembly. If this were to happen, it would change the functions of the
assembly itself, which is to be set up precisely to increase the level of participation
and policy-sharing in the field. The intention of central government is both to
encourage the participation of all political and cultural players, and also to avoid
disproportionate representation of different cities and localities.
All citizens resident in the region who have reached the age of 21 will be entitled to
vote. The assembly will have a four-year term.
Setting up the Assembly will cost the UK Treasury about £25 million per year, £5
million of which will be the costs of transferring existing staff to other offices, whilst
308
the remainder relates to elected members' expenses, the cost of elections, and the
additional staff to be taken on. Part of the costs will be covered by a tax; the
remaining costs will be borne by central Government.
It is expected that the proposed regionalising reforms will have a significant impact
on the level of democratic legitimacy of regional politics, in that it would for the first
time enable voters – who are also the users and the beneficiaries of public services –
to express an opinion on their performance through the ballot box.
In addition, the Assembly would be able to give a voice to the region’s interests at
national level.
Based on the example of what has happened in those parts of the UK where
devolution has taken place, central government believes it possible that means may
be devised for regional communities to take part in the decisions of their elected
bodies (Civic Forums, involving representatives of local government and economic
players).

of government
The developing relations between the UK's various governing bodies are not
governed by legislation – with the exceptions set out below; devolved/central
government relations are not even mentioned in the devolution acts. This runs counter
to the requirements for links between institutions that have become apparent
wherever territorial pluralism has been introduced, and also opens the way to the
adoption of informal instruments in the system of inter-governmental relations.
309
As has been seen, the actions of central government were not radically changed by
the devolution process in the early years of its implementation14. Other than the
instruments put in place by the Agreement relating to Northern Ireland, including the
North-South Ministerial Conference and the British-Irish Council, a relationship
between the United Kingdom and the devolved institutions has been established
through the annual plenary meeting of the Joint Ministerial Committee (every
October). There have also been some specific JMCs, not least those relating to
Europe.
As has been said, therefore, with reference to each institution and to every single
instrument of inter-governmental relations, the United Kingdom clearly remains the
dominant partner.
Looking at the legislative texts on devolution, one can find just a few references to
inter-governmental relations. For example, the Scotland Act states that functions that
are exercisable within devolved competence shall be exercisable by the Scottish
Ministers instead of by a Minister of the Crown (Section 53). On the other hand, if
the Secretary of State has reasonable grounds to believe that any action proposed to
be taken by a member of the Scottish Executive would be incompatible with any
international obligations, he may by order direct that the proposed action shall not be
taken.
Conversely, both for Scotland and for Northern Ireland, the Secretary of State may
order that any action that is required for the purpose of giving effect to international
obligations shall be taken. The Secretary of State may also revoke subordinate
legislation that is incompatible with any international obligations or the interests of
defence or national security.
14
Hazell, R.,7-8.
310
Furthermore, outside of the framework of devolved powers, by virtue of an Order in
Council, provisions can be made such that any function that can be exercised by a
Scottish Minister may be exercised (a) by the Scottish Ministers instead of a Minister
of the Crown, or (b) by both concurrently, or (c) by the Minister of the Crown only
with the agreement of, or after consultation with, the Scottish Ministers.
The relationships between local authorities in the United Kingdom, in the context of a
unitary state, have undergone significant developments in recent years, not least as a
result of the increased role of those authorities. They belong to the Local Government
Association (LGA), which represents them along similar lines to those in many more
decentralised countries. This association was formed in April 1997, and represents
local authorities in England and Wales, of which there are around 500 in total. The
aim of the Association is to promote better local government
(http://www.lga.gov.uk/home.asp).
Still on the subject of relations between local institutions, considering that the country
has a less rich experience of this than elsewhere in Europe, the Local Government
Act 2000 provides for the possibility of a function of a particular institution being
exercised by another. In this case, which applies to relations both between institutions
and between bodies within them, provision is made for the Secretary of State to make
provisions within the law. The conditions that may require the transfer of functions
are based on objective factors (such as the size of the authority) and contingent
historical situations.
311
metropolitan cities
With the Greater London Authority Bill of 1999, the Westminster Parliament
provided for radical reform of the government of London. This was a reaction to the
centralising tendency of the previous years and gave the capital of the Kingdom the
power to govern itself in a number of areas strategic to its development.
Following the reform carried out by means of the Greater London Authority Bill,
Londoners are thus now able to directly elect their Mayor and the Assembly, the
Greater London Authority (GLA). The system for electing the Mayor allows for a
second preference vote: that is, the elector can put down a second choice after the
first. In the event that no candidate achieves 50% + 1 in the first round, the second
preference votes are counted to determine the winner. The form of government
provides for the division of powers between the Mayor and the Assembly, which has
25 members.
From the point of view of doctrine, there is a very strong link between the process of
devolution that has been taking place for a few years in the United Kingdom and
developments in its capital. In the case of London, as has already been said,
institutional reforms have been carried out not in response to nationalist or religious
demands, but rather as part of the national government’s vision of regionalisation.
Indeed, it is not inconceivable that other large cities in the United Kingdom may also
come to enjoy similar forms of autonomy.
The autonomy conferred on London means that it now has administrative powers
within its territory over transport, security, economic development, the environment,
health, culture, and planning. The powers of the Mayor in this area are however very
limited. This is the case not so much because of the balancing of his powers with
312
those of the Assembly (which acts as a counterweight), but rather due to the power of
central government and the London boroughs.
The central government is able to have significant influence on the policies of the
London Mayor, as was demonstrated by recent events in the area of transport15, both
because most of the London authority’s finance comes from the state, and because
central government still holds considerable powers on devolved issues.

The party political system of the United Kingdom is largely structured around the two
major national parties, the Labour Party and the Conservative Party. There is also a
third, smaller party, the Liberals. At the last two general elections (1997 and 2001),
the Labour Party defeated the Tories and formed a single-party government without
the support of the Liberals.
As has already been highlighted, the political parties have played a crucial role in the
devolution process, as Tony Blair’s Labour has put great emphasis on institutional
reform, as is clear from the 1997 and 2001 manifestos.
The attitude of the Conservatives has been different. Under Mrs Thatcher’s
government, there was a refusal to envisage devolutionary experiments16. They have
often opposed devolutionary processes in parliament and in referendums. Although
15
For more details on this, particularly with specific reference to financial policies in London,
see Martino, P (2002), p. 1457 ff.
16
See Local Government Act 1985.
313
there are historical reasons for their weakness here, the Tories are significantly under-
represented in the devolved Assemblies when compared to the national level. This is
not true of New Labour (see part II.1).
Nonetheless, regional political parties also played an important role in the devolution
process, both when they developed largely nationalist, secessionist policies, and when
they became less extremist supporters of devolved institutions (see paragraph I.2).
In contrast to the nationwide political battle along the Labour-Tory axis, the Scottish
and Welsh assemblies, which the Labour Party controls, have seen the Lab-Lib
coalitions opposed by the respective nationalist parties (the SNP in Scotland and
Plaid Cymru in Wales), while the Conservatives have never played a significant
political role.
The national political parties are present and operate in the territories affected by
devolution, albeit with very different levels of support. Where they are present, these
parties present themselves as component parts of the respective Westminster-based
parties, but they try to emphasise their regional nature17.
In Scotland, for example, there are the Scottish Conservative Party, the Scottish
Labour Party and the Scottish Liberal Democrats; similarly, Wales also has the Welsh
Labour Party, the Welsh Conservative Party and the Welsh Liberal Democrats.
17
See Devolution Briefings: The Elections in Scotland and Wales: What’s at Stake? within the
research programme Devolution and Constitutional Change, which states that the devolution
process begun in 1997 has brought about lasting structural change to the British political
system. However, “the traditions of Westminster government and the disproportionate focus
those traditions bring on politics as seen from London can all too easily obscure the extent of
change.” (p.1).
314
The Labour Party, compared to the others, is characterised by its strong grassroots
ties in Wales and Scotland, such that it is able to formulate its own, independent
policy programme on employment and development, for example, in the Welsh party.
The fact remains, however, as is stated in the documents of the Scottish party, that the
latter “is an integral part of the British Labour Party”, whose rules and values it
shares. Moreover, in common with the national party, the Scottish organisation also
has strong links, on a local basis, with the trade unions (see paragraph 3).
In Northern Ireland, given the particular situation in which national political forces
have to operate, the London parties are not present, except in very different forms or
with very little electoral support. The latter is the case of the Conservative Party,
which has had close links with the Westminster Conservatives since 1972, but is
almost non-existent in electoral terms (see part II).
The presence of regional parties can be analysed at two different levels of

government: local and national. Locally, the political system of each of the territories
that have benefited from devolution has created its own party system, or else has
strengthened the pre-existing structure.
315
Thus, thanks in part to the Assemblies’ partly proportional electoral system18, a very
great number of regional (or local) parties have come into existence, only some of
which have succeeded in being elected to the Assemblies. Although they do not often
get their representatives elected, these are nonetheless building a framework of inter-
party relations that is profoundly different from the national one19.
The number of parties that could be classified as regional is thus very large if one
looks only at local elections; however, at national level, this number falls
significantly, because very few of them are of national relevance and succeed in
obtaining seats in the Westminster Parliament (see part II).
It is also worth noting that, in order to take part in elections (including those to the
Welsh Assembly, the Scottish Parliament and the Northern Ireland Assembly),
political parties must be registered in accordance with the Registration of Political
Parties Act 1998. In comparison to the high number of political parties listed on the
register, the number of those that actually have significant electoral support or get
elected to the Assemblies is very small.
18
The electoral systems for the Scottish Parliament and the Welsh Assembly are mixed. A
quota of Assembly members is elected by the first-past-the post system in single-member
constituencies in a single round of voting. The remainder are elected by proportional
representation based on votes cast for party lists or independent candidates. In the first-past-
the-post element, voters choose between single candidates from the respective parties. For
the proportional element, each registered party submits a list of names (maximum 12,
minimum 1), and the available seats are contested on a regional basis. There are firm
exclusion clauses concerning candidatures in multiple constituencies or regions; it is also
forbidden to stand in a single-member constituency at the same time as featuring on a
regional list.) If a party’s regional list has been exhausted (the candidates being elected in
the order in which the party placed them on the list), that party no longer participates in the
allocation of seats. Where the seat of a constituency member is vacant, an election shall be
held. Where the seat of a regional member is vacant, it will be filled by the next candidate
on the list.
19
See Saitz, M. (1999), passim.
316
In Wales, in contrast to the other two autonomous regions created in 1998, the party
political landscape is very similar to that at national level, and the only significant
local party is Plaid Cymru. Alongside this, there are the Welsh Labour Party, the
Welsh Conservative Party and the Welsh Liberal Democrats, the regional
manifestations of the respective London-based parties.
The Party of Wales20 came into existence in 1925. Its objective is to improve the
constitutional status of Wales, with the ultimate aim of Wales becoming a fully-
fledged Member State of the European Union. It also seeks to ensure economic
prosperity, social justice, and the health of the natural environment, based, as stated
in its Constitution, “on decentralist socialism”. In its 2003 manifesto for the
Assembly elections, Plaid Cymru firmly opposed the policies of the Lab-Lib majority
that ran the region from 1999, and, whilst judging the process of devolution in itself
to be positive, it highlighted the undeveloped potential of that process.
In Scotland, the situation is somewhat different. Whilst the national parties still get
most of the votes, there is a strong regional party (the Scottish National Party), which
also has seats in London, and a number of small but rapidly-growing parties,
including the Greens and the Scottish Socialist Party (SSP).
The Scottish National Party is, as its constitution states, a “democratic left-of-centre
political party”. It was founded in 1934 with the aim of making Scotland an
independent nation in the mainstream of modern Europe. In its seventy years of
political activity, the SNP claims to have brought Scotland from being “an almost
totally unionist country to a nation on the brink of independence.” In any case, the
20
Article 1 of the party’s Constitution says “The party shall be called 'Plaid Cymru - The
Party of Wales'”. The party also has four MPs at Westminster and two MEPs.
317
nationalists sit on the opposition benches in the Parliament, but continue to fight
vigorously for Scottish independence.
At the last elections to the Edinburgh Parliament (see Part II), both the Greens and
the SSP significantly increased their share of the vote, at the expense of Labour and
the SNP. The SSP, which has come into existence only very recently, fights for an
independent Scotland, but from a different perspective from that of the nationalists.
Under the inspiration of socialism, they hope that Scotland will become part of an
international anti-capitalist network.
In Northern Ireland, the political landscape is very much shaped by the division
between Unionists and Nationalists. The UK-wide political parties are unable to
integrate the region's political dynamic. The largest Unionist party is the Ulster
Unionist Party (U.U.P.)21, whose leader since 1995, David Trimble, is First Minister
of Northern Ireland.
The main aims of this party are keeping the “region” under the Crown as an integral
part of the United Kingdom, to support the democratic institutions of government,
and to safeguard the British citizenship of the residents of Northern Ireland. This
party worked closely together with the Conservatives in London, until the latter,
when they were in government, signed the 1985 Anglo-Irish Agreement, resulting in
the links being severed.
The other main Unionist party, the Democratic Unionist Party (D.U.P.)22, founded in
1970, is the principal opponent of the Agreement23. There are other, smaller, Unionist
21
See their website at www.uup.org.
22
See their website at www.dup.org.uk .
23
See the 2001 Parliamentary and District Council Election Manifesto, which attacks Prime
Minister Blair and the UUP in some detail.
318
parties, such as the United Kingdom Unionist Party (U.K.U.P.)24, which is against the
Agreement, but which split following the actions of some of its leaders, who founded
another small Unionist party (NIUP)25.
The nationalist side is represented by Gerry Adams’ Sinn Féin (SF)26, which has been
the largest nationalist party since 2001, when its support overtook that of the Social
Democratic and Labour Party (SDLP). The leader of this latter party, Mark Durkan,
is Deputy First Minister of Northern Ireland. Sinn Féin is a republican, socialist party
that aspires to represent the Irish people and demands the end of British rule in
Northern Ireland. It also defines itself as nationalist and internationalist, and initially
supported the implementation of the Good Friday Agreement, but wants a united
Ireland.
Aside from numerous other small parties, there is the Alliance Party of Northern
Ireland, which has the special characteristic of being a “cross-community” party27, a
Green party, and a party which, although it calls itself Labour, has no relationship
with the national party of the same name.
With reference to the political forces present in the GLA, apart from the unique
phenomenon of Mayor Livingstone (a Labour dissident who stood as an independent
candidate), the Assembly is made up of the traditional political parties: Labour, the
Conservatives, the Liberals and, additionally, the Greens. These parties, partly
because of the form of government in the city, which relegates the assembly to a
secondary role, do not really have an identity separate from the national party.
24
See their website at www.ukup.org.
25
See their website at www.niup.org.
26
See their website at www.sinnfein.ie.
27
See their website at www.allianceparty.org .
319
As is well known, the scope for autonomous political action by the trade unions in the
United Kingdom has repeatedly been diminished by the role played by political
parties. This is particularly true of the Labour Party, which was born out of the trade
union movement and maintains a direct relationship with it to this day28.
This phenomenon was also repeated at local government level in the areas of the
country that were affected by devolution. Looking at the experience of the Scottish
Labour Party, its political literature makes clear the strong links between itself and
the Scottish trade unions. Specifically, the party structure provides for a Scottish
Trade Union Labour Party Committee, made up of representatives of the trade unions
affiliated to Labour, in order to coordinate policy on social issues.
Furthermore, many members of local trade unions have been elected to the Scottish
Parliament, which confirms the integration of the unions’ political activities into
those of representative parties29.
28
For an historical analysis of this relationship, including from the perspective of devolution,
see Lang, M.S. (2001). Trade unions formally came into existence following the repeal of
the Combination Law (1824-1825), which outlawed workers’ organisations. However, the
development of de facto associations and increasing social tension led to the prohibition
being lifted. In 1869, the Labour Representative League (the precursor to the Labour Party)
was formed. This had its first MPs elected to the House of Commons in 1874. The Labour
Party itself was not formed until 1900.
29
The Scottish Labour Party and its affiliated trade unions have pursued joint policies on
economic and social issues at a local level, leading the Scottish Parliament to approve the
introduction of the Working Families Tax Credit and the minimum wage. See the meetings
between the
320
The Scottish case is the most interesting one to analyse, compared with other
experiences of devolution. In comparison to Wales, Scotland not only has greater
powers, but also a different socio-economic structure30. Wales’s development has
been heavily influenced by the rapid process of the “second de-industrialisation”,
whose effects are being mitigated by increasing public sector employment and by the
use of European funds. Scotland, on the other hand, has chosen to build a knowledge
economy, which it is doing with the close involvement of the social forces in
Parliament and outside it.
In London, too, which enjoys a far lesser degree of autonomy, the issues of social and
economic development are part of local politics, as the 2003-2004 Action Plan of the
Corporation of London’s Economic Development Team shows.
The functions devolved to the city’s government also include economic development
and health, albeit with the strict limits outlined above. The London authority
therefore has policies to support both SMEs and large multinationals.

LEVEL
At national level, the 2001 general election, which the Prime Minister called in order
to exploit a moment where his political support was high, confirmed the landslide
victory that Labour had achieved in the 1997 election, leaving the Tories in
opposition.
30
See Cooke, P. (2000), passim.
321
Of the 659 MPs in the House of Commons, there are currently 409 Labour MPs, 163
Conservatives, and 54 Liberal Democrats. In addition, there are small groups of
unionists (11 in total) and the nine representatives of the nationalist parties (the
Scottish National Party and Plaid Cymru). The four Sinn Féin MPs, who have not
taken up their seats at Westminster, are a special case.
Turnout in 2001 was very low. Only 59.4% of those entitled to vote did so. Among
the youngest members of the electorate, the figure was below 40%. Already in 1997,
turnout was 71%, the lowest level since 1935, but four years later the rate of
abstention rose by 12%, bringing turnout below that in 1918, during wartime.
In European elections, the turnout is even lower: in 1999, the figure was just 23%31.
Compared to 1995, in the 1999 elections to the European Parliament the gap between
the Conservatives and Labour narrowed. The latter lost almost 15 percentage points,
compared to 42% in the previous elections, whereas the Conservatives, with 35.8%,
gained 9 points. Support for the Liberals, at 12.7%, was also down on five years
previously. The Greens, who had previously been absent from the electoral
landscape, did well with 6.7%, while the Scottish nationalists received 2.7% of the
vote nationally, and Plaid Cymru 1.9%. The Conservatives were allocated 36 seats,
Labour 29, the Liberals 10, the nationalists five and the Greens two.
If the data is analysed on a regional basis, turnout in Wales was considerably higher,
with almost 30% of the electorate going to the polls. The June 1999 elections to the
European Parliament saw a reduction in the gap between Labour and the
Conservatives, which nonetheless remained significant, with the parties receiving 32
31
It is a matter of record that this is “a lower percentage of UK population than those who
voted in the phone ballot for the final episode of Channel 4’s Big Brother game show” (The
Independent Commission on Alternative Voting Methods, Election in 21st Century: from
paper ballot to E-voting, p. 16).
322
and 22.7% of the vote respectively. Plaid Cymru asserted itself as the second biggest
party, with 30%, whilst the Liberals got just 18%. Turnout in Scotland, on the other
hand, was lower, with just one elector in four casting a ballot. Here, as in Wales, the
real contest was between the Labour Party and the nationalists, in this case the SNP
(28.7% and 27% respectively). The Conservatives and Unionists received less than
20% of the vote, while the Scottish Liberals got 10%. The Scottish Greens received a
flattering 5.8%, whilst other minor parties failed to receive any significant support. In
Northern Ireland, on the other hand, turnout at the last European elections was above
57%, far higher than other areas of the UK. Votes were distributed among the
Unionists (28.4% for the DUP and 17.6% for the UUP). The SDLP received a little
more than 28% of the vote, while Sinn Féin got 17%.
Turnout at local elections, at around 28-30%., is barely higher, leading some

researchers to suggest that we are facing a “crisis in British democracy”32.
In May 2003, there were elections to the Scottish Parliament and the Welsh
Assembly. Compared to the previous elections, the party political landscape did not
change significantly, despite the fall in votes for both Labour, who along with the
Liberals held the majority in the previous parliament, and the nationalists, who were
the official opposition. Prime Minister Blair’s party now has 50 MSPs, six fewer than
were elected in the first elections in 1999. The SNP also lost eight seats, and now has
27 members in the devolved parliament.
The votes that were lost did not, however, go to the other two traditional UK political
parties. Both the Liberals and the Conservatives held on to the same number of seats
they had had in the previous parliament, with 17 and 18 MSPs respectively. Instead,
two parties that had previously been tiny minorities on the Scottish political scene
32
Ralling, C., Thrasher, M. (2000)
323
saw their support increase significantly. These were the Scottish Green Party and the
Scottish Socialist Party. Each of these had just one MSP in the previous parliament,
but they now have 7 and 6 respectively.
The Lib-Lab majority that was formed after the 1999 elections has thus been
significantly weakened. It now has 67 MSPs, giving it an overall majority of just one.
In the Welsh Assembly, half of the sixty seats went to the Labour Party, which gained
one seat compared to the 1999 result. As in Scotland, the Liberal Democrats
maintained their share of the vote and kept their six members of the assembly, while
Plaid Cymru lost four seats (12 compared to 16 previously). The Conservatives
gained two seats, making their total 11, while another went to an independent.
In May 2000, Greater London voted in elections for a self-government body. The
Mayor was directly elected, as were the 25 members of the Assembly. Ken
Livingstone, a Labour dissident who had stood as an independent against the
candidate of Blair’s party, won the mayoral election. “Red Ken”, as he was
nicknamed on account of his position to the left of New Labour, received 39% of the
vote. The other candidates were widely spaced out. Norris, the Conservative
candidate, came second with 27%, followed by Dobson (Labour) on 13% and Kramer
(Liberal Democrat) on 12%.
As none of the candidates exceeded 50% of the vote, the two leading candidates had
the second preference votes of electors who had voted for their opponents added to
theirs. Each elector had two votes, the first of which would determine either the
winner or who would go through to the second round; and a second to choose the
candidate who was “least far” from his political views, in case his first choice of
candidate was not successful. Thus, Livingstone received 178,809 votes in addition to
the 677,000 he received in the first round, whilst the Conservative candidate received
324
188,000 in addition to his 464,000 first round votes. The Labour dissident was thus
elected with a majority of over 200,000. Voter behaviour in this dual vote mechanism
is worthy of separate analysis. If the first and second preferences are added together,
the candidate who came second, Norris, obtained fewer votes than the Liberal
Democrat candidate (564,000 against 607,000). The latter received many of the
second preferences of Conservative voters, but also some of those of Labour voters
who were reluctant to vote, even in the second round, for “Red Ken”. On the other
hand, only a tiny proportion of the victor’s 667,000 second preference votes went to
Labour; Dobson received just 200,000 of them. Many of these probably went to the
Greens, who, having received just 38,000 first preference votes, got 192,000 in the
second round.
The Assembly elections, on the other hand, gave a much more balanced picture, with
nine of the 25 seats going to Labour, the same number to the Conservatives, four to
the Liberals and three to the Greens.
The case of Northern Ireland deserves separate analysis, because the elections
scheduled for May 2003 did not take place due to the events mentioned above. In this
part of the country, the share of the vote is highly fragmented. The two Unionist
parties received 21% (UUP) and 18% (DUP), with the first receiving 28 seats and the
second, 20. These cannot be taken as a single group given their differing positions on
the Belfast Agreement. The largest share of the vote went to the Social Democratic
and Labour Party (with 22% of the vote and 24 seats), whilst the nationalist Sinn Féin
obtained 17.6% and 18 seats. Smaller shares of the vote went to two other Unionist
parties (UKUP, 4.5% and 5 seats; PUP, 2.5% and 2 seats), whilst the Alliance Party
of Northern Ireland received 6.5% of the vote and six seats.
With regard to turnout in the elections to the “regional” assemblies, that in Scotland
was a little less than 50% in 2003, compared to 58% four years earlier. In Wales, too,
325
turnout in the Assembly elections fell. At the last elections, just 38% of Welsh voters
turned out, compared to 46% on the previous occasion.
It is also interesting to compare data for Westminster constituencies in the individual

areas affected by devolution with data for the respective assemblies. In the 2001
general election, Wales sent 46 Labour MPs to Westminster, compared to five
Conservatives and three Liberal Democrats. Scotland elected 63 Labour members,
13 Liberal Democrats, and seven nationalists. Northern Ireland’s constituencies
elected a large number of Unionists and Nationalists.
Moving on to local elections, it should be noted that turnout in council elections is

even lower than for general elections. After the 2003 elections, Labour controlled
57 councils, having lost 17 and gained just one. Conversely, the Conservatives gained
17 (and lost just one), increasing the number of councils they controlled to around 30,
but with their total number of councillors far exceeding that of Labour.
National referendums are rarely held in Britain. The will of the people is expressed
largely, if not exclusively, in national elections, and does not leave much room for the
use of instruments of direct democracy, although the heavy use of opinion polls does
have a significant influence on the political life of the country.
At local level, on the other hand, referendums are often used, particularly with regard
to local government. Apart from the role played by the referendums on devolution
(see Part I), the London boroughs and local authorities have called referendums to
sound out public opinion on specific local issues.
The recent Local Government Act 2000 provides for a series of circumstances where
a referendum may be held. Leaving aside consultations on the organisation of the
326
executive (Section 25 of the Act, see point I.2 above), provision is made for
referendums following a petition (Section 35), a direction (Section 36) or an order
(Section 37).
With regard to the population’s sense of belonging to its respective local authority
area, the analysis should be carried out both with reference to the situation before
devolution and to that since the creation (and development) of the respective elected
assemblies.
In order to answer the first of these two questions, some researchers have suggested
analysing the electoral data from each region from the referendum on the creation of
the assembly and the turnout in the subsequent national and local elections33.
This would show that in Wales, the proportion of the electorate in favour of an
elected assembly had increased significantly in relation to those who preferred not to
have such a body.
Some researchers state that the impact of the creation and operation of the
Assemblies has been to strengthen the sense of regional identity, particularly in areas
where that identity was relatively weak, as was the case in Wales. On the other hand,
a sense of national identity developed on a civic rather than ethnic basis, thanks to the
fact that these bodies worked to develop social policies.
As has become clear, there is a clear difference between the Scottish sense of
belonging and the Welsh one34. According to some data, 33.7% of Scots feel
33
See Wyn Jones, R., Scully, R. (2003).
327
“Scottish and not British”, whereas only 18% of the Welsh opt firmly for their own
identity rather than that of the UK35.
There is another statistical difference between the two regions. 35.6% of Scots feel
“more Scottish than British” (against 20% of Welsh people), and only 23% give
equal weight to their Scottish and British identities. In Wales, however, almost 40%
of the population feels equally Welsh and British.
The same statistics show that only 10% of Scots and 3% of Welsh people are in
favour of independence both from the United Kingdom and from the European
Union, whilst 18% and 2% respectively would like independence from the
motherland whilst remaining inside the European Union.
Finally, the absolute majority of Scots is in favour of the elected Parliament with tax-
raising powers, whereas only 25% of Welsh people would be in favour of such an
assembly. The Welsh would appear to be much more “tied” to the United Kingdom,
as only 38% are satisfied with the recently created Assembly, and fully 27% think
that they could do without it.
The concept of economic constitution in Great Britain is identified more with

“legislative public opinion”, defined by the constitutionalist Albert Dicey at the end
of the 1980s and the early 1990s as being the sum total of the institutions and
34
Ardensen,R., passim
35
Ardensen, R., 2.
328
legislative rationes that make up the connective tissue of a certain section of public
law that has a bearing on the economy, rather than in a specific constitutional law36.
Thus, defining the British constitutional framework with respect to the economic and
financial constitution means defining the scope and the extent of public law that
affects the economy. Incidentally, this is a question that has often been asked
regarding economic development at regional and local level in recent times,
particularly in the light of the progressive increase in legislation following the arrival
of the Labour government, led by Tony Blair37, after the Thatcher era.
The laws governing the economic and financial constitution in Great Britain are made
up both of Statutes – that is, primary legislation passed by Parliament – and of
administrative instruments issued by the Government (such as licences) and by
sectoral authorities, in addition, of course, to the jurisprudential rules of common
law38. At the same time, the option of intervening in the economy can be exercised
both with ordinary social aims (from information regulation to private regulation),
and in order to develop economic regulation, which represents, and has represented, a
significant part of Great Britain’s recent interventions in its economy39.
Thus, following on from the era of nationalisations, when government control over
public corporations was quite invasive, came the Thatcher era, during which the
polemic against “big government” led, through fifteen years of strong, decisive
policies of deregulation and privatisation, to a market economy. This was followed
36
This becomes clear also with respect to the same use of this terminology by teachers and
researchers, in that they often talk of “regulation” or “regulatory law” rather than “economic
public law”. For a very useful summary, see Bonomo, A. (2003).
37
For a general outline see Graham, C., Prosser, T. (1988); Prosser, T. (1997).
38
For a general outline, see D’Alberti, M (1990).
39
For a clear overview, see Ogus, A. (1994).
329
by the Tony Blair era (1997 to the present day), which has been characterised by a
desire to continue the processes of deregulation and privatisation already in progress,
but, at the same time, to temper them with new forms of regulation, so-called re-
regulation, which seem to have changed the nature of state intervention in the
economy, making it far more complex.
The British market has thus become freer and richer, since it has been privatised, but
also more competitive, as the rules protecting competition and free access to markets
have been strengthened. Last but not least, the incremental advance of Community
legislation, pushed forward by the policies of the Labour Party, means that a
significant part of the British financial and economic sector is now affected by
Community harmonisation policies. The peculiarities of the British order now seem
increasingly to be giving way to the relevant EU regulations.
Not only is privatisation in Great Britain the first real example of a newly recast
relationship between the economic system and state intervention; it is perhaps also,
by virtue of its variety and quality, the best and broadest programme in this area.
Consequently, it has become a reference model that everyone quotes and tries to
imitate40.
The characteristics of privatisation in Great Britain can be summarised in four points:

the relative speed with which it was carried out; the incentivisation and progressive
building of a large number of small shareholders, most of them in families, who
invested their savings in the stock market; the widespread introduction of elements of
40
In general, see Kay, J., Mayer, C., Thomson, D. (1986); Wright, V. (1988), 86 ff.; Bishop,
J., Kay, C., Mayer, C. (1999).
330
regulated competition in sectors that had previously been controlled by strong, deep-
rooted public sector monopolies; and, because of this, the opening of many public
services to the market through the sale, among other things, of public utilities, whilst
at the same time creating public organisations responsible for regulating them
(particularly through the so-called quangos created by Mrs Thatcher)41.
However, following on from the era of privatisations carried out by Margaret

Thatcher between 1979 and 1993 (notably the reform of the railways)42, Tony Blair
has continued this policy since 1997, privatising not only some public transport
services (such as the London Underground), but also, in 1999, the Post Office,
founded by King Charles I in 1635, turning it onto a plc and putting some of its
services on the market, thus definitively breaking the monopoly on postal services,
against a backdrop of increasing confrontation between the "old" and the "new" left.
At the same time, the Blair government not only hived off the problems of the
National Health Service and, citing the difference between the state and public
spheres, privatised some parts of it (ranging from supplies to infrastructure and
paramedic services), but also turned increasingly to the private sector to manage
schools and public services (such as fire brigades), and did not hesitate to increase
fees at public universities.
In this context, it is important to emphasise how much the Blair government has done
in the transport sector, not least in the light of the tragic consequences of serious fatal
accidents. In January 2002, a ten-year plan for overhauling the national railways was
presented in the form of the Transport Act 2002. This plan, which was drawn up by
the government’s Strategic Rail Authority (SRA), provided for £33.5 billion of state
funding and £34 billion of private funding. The main aims of the plan are to improve
41
For more on all four of these points, see Foster, C.D. (1992), 15 ff.
42
For a comprehensive overview of this subject, see Grimstone, G. (1993).
331
services in the short term and to expand the network in the long term, although it was
criticised by Railtrack, the company that has been in administration since 7 October
2001 and owns and runs the country's crisis-hit rail network.
Similarly, Blair’s preferred route to privatisation in the healthcare sector seems to

have been particularly difficult. This seems to point towards public hospitals
potentially run by the patients, according to a “foundation hospital” model, as set out
by the British Secretary of State for Health, Alan Milburn. The idea of this reform is
that hospitals should remain public bodies, and thus paid for by the State, but be run
and administered by their patients, becoming an autonomous entity able to manage its
budget, its staff and its operations without having to refer to the Government. This
plan thus introduces a business model which belongs to the community and is also
required to reinvest profits, protecting the property of these Foundation Hospitals
from any form of sale.
In addition to all this, the most recent proposal of the Blair government is to privatise
the technical infrastructure of the judicial system in England and Wales. This would
affect only England and Wales, as Scotland and Northern Ireland each have their own
legal system. The proposal involves putting archives, security, clerks’ offices and
everything that is peripheral to the administration of justice on the market. This
would strip the Courts Service, which was created in 1995 and is responsible for the
management of the Court of Appeal, the High Court, county courts and tribunals, of
all its powers. According to a report by a Government-appointed commission chaired
by Kenneth McKenzie, the Courts Service has many deficiencies when it comes to
offering an efficient service to the public.
Thus, in general terms, it should be emphasised that the privatisations that have been
carried out do not seem to affect development at regional or local level by bringing
about wide-ranging decentralisation, but rather seem to have the quite different effect
332
of reducing public intervention and expanding – in a horizontal direction, so to speak
– the activities of the private sector and of the market in many areas.
Privatisations seem to operate directly on the market, avoiding almost completely any
form of decentralisation or devolution between regional and local levels. It is public
bodies as such – both state and sub-state – which, in the hard logic of the British
process, seem to be becoming ever further removed from the process of reform that is
taking place. There is no principle of decentralisation or subsidiarity involved in this
process; nor is there any transfer of management or supply of public services from
the State to sub-state bodies.
The reform plan, which is more balanced but otherwise mirroring the decisions taken
in the Thatcher era, thus concerns the relationship between the public and private
sectors rather than that between the state and the sub-state level. This is what
characterises the privatisation model adopted in Great Britain, which is totally
removed from any kind of involvement of sub-state entities.
The doctrinal basis for the process of devolution that has characterised the second
term of the Blair government was set out in the 1960s, notably by the works of the
constitutionalist J.P. Mackintosh43. Part of this process has been the redistribution of
the budget, despite economic reports showing that 97% of Scotland’s budget - with
an identical picture for Northern Ireland or Wales – depends on London44. With
respect to Scotland, it should be noted that the Scottish Parliament was given tax-
43
Torre, A. (2002), 867
44
Patrice, C. (2000)
333
varying powers45 after 63.5% of Scots voted in favour of such a measure. This raises
the so-called "West Lothian question" concerning the ability of Westminster MPs
from Scottish constituencies to vote on all English matters, whereas English MPs
have no such power over devolved issues in Scotland46.
That having been said, although the Scottish Parliament and the Northern Ireland
Assembly have primary legislative powers on issues devolved from London, whilst
the Welsh Assembly only has administrative powers, local and regional authorities’
share of national tax revenue is of little relevance given that the Chancellor of the
Exchequer has exclusive power over British economic policy. Only the Scottish
Parliament has limited tax-varying powers for funding local authority expenditure.
The system for financing the three regions’ budgets is based on the “block and
formula” system, whereby the budget consists of a given sum (block) which is
adjusted on the basis of numerical variations in the population via an appropriate
formula (known as the Barnett formula). Thus, the central government retains
relatively tight control over public policy in Scotland, Wales and Northern Ireland.

of the unions
Public-private cooperation is also developing, in part through the increasing

importance of public companies, although private companies (i.e. companies with a
limited shareholder base that do not intend to float on the stock market) remain a
widespread type of structure.
45
For the results of the referendum, see www.bbc.co.uk/politics97/devolution
46
See Poggeschi, G. (1998), 955.
334
The intermediary role of trade unions, however, has – as has already been made clear
– lost much of its relevance, despite the Labour Party being in government. In
particular, the progress of privatisation has certainly increased tensions and led to
repeated and severe strikes of whole areas of the public sector. However, the
Government has always stood up to these, taking ad hoc measures to replace strike-
bound services. A recent example of this is the use of the army to replace firefighters
who were on strike in protest against their privatisation; however, this solution did
not prevent a number of deaths from occurring over the strike weekend, possibly due
to the inexperience of the army in civil protection matters.
3.5 European integration and economic development at regional

and local level: management of the Structural Funds
In 1999, the rules governing the Structural Funds were subject to a complex reform,
the main thrust of which was set out in the Communication “Agenda 2000: For a
stronger and wider Union”, which was presented by the Commission in July 199747.
In particular, the Communication set out the position of the Community institutions
with regard to the political and economic development of the Union with the strategic
prospect of enlarging the Union to the new countries of central and eastern Europe
and, against that backdrop, set out common policy objectives and outlined the
financial framework for the first seven years of the millennium (2000-2006).
Interestingly, in contrast to widely-held perceptions, Great Britain was shown to be

one of the biggest users of the European structural funds.
47
European Commission. Agenda 2000: For a Stronger and Wider Union COM(97) 2000
final, 15.7.97
335
Following the reform of the Funds introduced by the new rules, which tends to focus
more heavily on priority objectives for intervention, entails changes in the
management, monitoring and assessment of measures, and reduces the number of
objectives from seven to three, it can be seen that the Structural Funds used by Great
Britain amount to EUR 15,635 million for the period 2000-2006.
This is a very significant figure compared to those of other countries such as Italy or
France. It is certainly the case that a significant proportion of this Community aid
comes in the form of the British rebate – granted because of its limited use of
agricultural subsidies – which has benefited the country significantly.
At the same time, due emphasis must be given to the lasting close relationship that
exists between the UK’s Permanent Representation to the EU (UKREP) and the
European offices of the devolved administrations; and to the small group of the
Ministerial Coordination Committee on EU Policy, to which the devolved institutions
make a contribution. The European Union is an important forum for the devolved
administrations: Scotland and Wales have active representations in Brussels dealing
with their particular interests: in the case of Scotland, Scotland House, and Wales, the
Welsh European Centre. These are not mouthpieces for the interests of the United
Kingdom (although some members of the Scottish Executive take part in UKREP,
where they represent the interests of the UK, and not just those of Scotland).
336

Great Britain was the cradle of the Welfare State, but over the last few decades has
also been the country which, more than any other in Europe, has transformed public
intervention in economic and social policies using privatisation and competition
instruments.
Experts have identified two different periods in compiling the history of public
services in the UK, during which the State significantly strengthened its role. The
first was between the end of the 19th century and the early years of the last one; the
second was after the Second World War48.
The end of the 19th century was the beginning of the end of the laissez-faire era and
the start of that of state intervention, laying the foundations for the system of public
services. The need to establish a social security system was highlighted by the 1942
Beveridge Report, which was based on the assumption that such a system needed to
recognise the central role of the family, with the aim of full employment and the
creation of a national health protection system for His Majesty’s subjects.
In 1946, after the Second World War, the National Health Service49 was created, the
most significant act in what has been described as the “post-war consensus” between
the national political parties in favour of (Keynesian) state intervention in the
48
Fenwick, J., Harrop, K., 53 ff
49
The institution came into being through the National Health Service Act.
337
economy and the creation of a progressive tax system. Aside from action in the area
of health, the National Insurance Act was adopted the same year, followed in 1948 by
the National Assistance Act50 and the Children Act. The scope of this legislation
covered areas that were closely linked to the Welfare State, such as health, education,
individual social services, housing, and social security.
The National Health Service itself has, over time, remained at the heart of social
policy. This system was created with the aim of protecting the health of all citizens,
thanks in part to the construction of a very wide network of public hospitals. In the
nineteenth century, medical care was mainly provided by private individuals or by
charities, notwithstanding the setting up of “infirmaries” for the poorest under the
Poor Laws. The very diversity of these organisations led to the creation of a Local
Government Board. On this basis, the task of unifying healthcare, which passed into
the hands of local authorities in 1930, was progressively completed.
There was a clear shift from a public system run along charitable lines alongside a
basic service provided largely by the private and voluntary sectors to a national
system of public service for all citizens, which was created in 1946. However,
notwithstanding the intentions, if one looks at the effectiveness of the service, the
system was not truly extensive and comprehensive, as the costs of treatment were
often too high and waiting times very long.
Hospitals played a very important role within the healthcare system. Indeed, they
accounted for 70% of healthcare spending; however, their geographical distribution
was not optimised (the classic example being London, where all the hospitals are in
the centre of the city).
50
This replaced the Poor Laws.
338
This disparity was addressed by the Labour governments of the 1970s, who put in
place instruments to rebalance the distribution of hospitals and make them more
specialised, whilst promoting the role of primary healthcare. The Conservatives
continued to move in this direction, and some hospitals were closed.
In its early days, the NHS was organised into hospitals, primary care, and local
authority services. That structure was modified over the years with the introduction of
regional, area and district levels, but the real innovation came when, based on the
belief that the NHS was a source of waste and inefficiency, it was thought necessary
to introduce market principles. The idea was that attention to costs and efficiency
would increase and Health Authorities would be better able to control their activities.
In addition, a number of “quasi autonomous trusts” were created, from which the
authorities could buy the various services.
It is clear that, at the beginning of the 1980s, and coinciding with a slowdown in
economic growth, the post-war settlement broke down and new ways of running
public services began to be looked at, particularly by the Conservative Party. Once
they came to power in 1979, the Conservatives prepared a plan for the progressive
withdrawal of the State from the provision of public services and the economy,
introducing competition into various areas of public utilities.
This policy, which was continued throughout the 1980s, had a direct impact on local
authorities, who had been playing a significant role in the provision of public
services. These became less and less providers of services and more and more
monitors and regulators of competition between private service suppliers. In terms of
the relationship between central and local government, this also led to a significant
move towards centralisation, due to the introduction of unelected, government-
appointed bodies.
339
The Conservatives made use of their four terms in office to continue reducing state
intervention in the economy and in service provision; meanwhile, the Labour Party,
having for a time maintained its traditional position, accepted the model proposed by
the governing party and began to propose very similar ideas for developing public
services and the economy51.
Some have suggested that his convergence constituted a new consensus between the
two major parties along the lines of that which allowed the Welfare State to develop
after the 1940s. This time, the agreement was about the need to keep reducing the
role of the state, and instead to encourage private operators to provide services on a
competitive basis.
The role of central government became progressively less significant, particularly

once the process of devolution was completed and the Scottish, Welsh and Northern
Ireland political institutions had started work. Each region has both a Secretary of
State with a department of central Government, and its own Assembly and Executive.
Scotland and Northern Ireland have different laws from those in England and Wales.
The Scottish Parliament has wide legislative powers, and the Scottish Executive has
its own social policy. Similarly, the administrative structure of Northern Ireland
provides for a Health Board, based on the Irish model, which deals with personal
social services, while public housing is managed by the Northern Ireland Housing
Executive.
In the various sectors that are considered as public services, the relationship between
the centre and the periphery has in most cases become very complex, and the
implementation of devolution has complicated it still further. Looking to the field of
education, it can be seen that, in the post-war years, a school system was created,
51
Giddens, A. (1998)
340
jointly run by the centre and the regions, but that this developed very differently
following devolution. The development of Education Authorities themselves in
Scotland, England and Wales was very different. On the one hand, the Labour Party,
whilst committed to public-private partnership and managerial control, wanted to
leave some powers with the Education Authorities. On the other, the Conservatives,
whilst not wanting them to be abolished, are demanding a reduction in bureaucracy
and centralisation in the sector52.
During the 19th century, local authorities were given an increasing role, particularly in
policies relating to poverty (Poor Laws53) and, subsequently, in the provision of
public services relating to health, social assistance and education. Local authorities
lost those prerogatives one by one due to a drive towards centralism, which has led to
a situation whereby local authorities can now only pursue those activities that the
central Parliament allows them, often under the direction of central government,
which carries out a wide-ranging monitoring role. Furthermore, local authorities have
limited fiscal and economic room for manoeuvre. However, this institutional
framework has demonstrated the risk that centralised policymaking will have a slow
(or distorted) effect across the country.
In today’s United Kingdom, local authorities are the principal bodies ensuring
protection of the individual and social rights. Legislation and case law gives them
powers in matters relating to public health, street management, town planning, social
services, leisure, and education54. Local authorities carry out a very large number of
52
Campbell, C. (2000), 85-106
53
The experiment of the Poor Laws began at the end of the 1500s (1531, 1536, 1598),
continued in the Elizabethan era (1601) and in the nineteenth century (1834).
54
See Highways Act 1980; Public Health Act 1936, 1961; Clean Air Act 1974; Building Act
1984; Control of Pollution Act 1974.
341
functions, including services for people with disabilities, the mentally ill, and
children55.
It should immediately be pointed out that there has been a progressive move away
from a model of social services provided directly by local authorities to other models.
Increasingly, various other service providers have come into existence alongside local
authorities, such as quangos and other unelected bodies. The acronym “quango"
stands for “quasi-autonomous non-governmental organisation”; this refers to
statutory bodies that are required to protect and promote social rights, and are not
really completely independent, but are part of government56.
In the summer of 2001, the Office of Public Service Reform was created to work with
the Prime Minister and Government departments on the reform of the UK’s public
services, including the Civil Service and local government. The aim of the Labour
government is to begin a phase of “modernising our public services”, as Prime
Minister Blair has said57.
The Labour government’s policy on public services is summarised in this body’s

documents. It is worth remembering that Labour won the 2001 general election with
a message of improving public services in health, employment and education. The
presumption of increased public spending and better services is, however, closely tied
to the country’s economic growth. However, the Labour government expected to
increase capital investment from 2002 onwards. Public spending on education and
55
See Chronically Sick and Disabled Persons Act 1976; Children Act 1989; National Health
Service Community Act 1990.
56
For a discussion of quangos see Edward, D.A.O., Robinson, W., McColgan, A. (2003), 695
ff.
57
See The Prime Minister’s Office of Public Services Reform, Reforming public services, 2.
(http://www.pm.gov.uk/output/Page258.asp)
342
health was £34.8 and £39.2 billion in 1997; in 2001-02, the budget was £42.3 billion
and £50 billion respectively. In 2003, the estimates show an further increase to 44.6
for education and 53.8 for health. On transport, the Government has drawn up a plan
to improve the rail and road network involving £180 billion of public and private
funds.
Furthermore, in preparing what has been described as “the most ambitious

programme of public service reform and investment since 1940”, the government
intends to put the customer at the centre of policymaking in this area, strengthening
the principles that already exist in the current model. As is stated in the Office of
Public Services Reform report, “public services have to be refocused round the needs
of the patients, the pupils, the passengers”. Labour’s reforms are supposed to be
based on four fundamental principles: setting national standards and clarifying
responsibility; devolution and delegation to front-line staff, giving local government a
central role, inter alia in assessing the impact of services in relation to specific needs;
greater flexibility in organising services and incentives and awards for the best
services; and customer contact, listening to calls for change58.
In UK politics, privatisation has had a significant, wide-ranging impact, because the

process has not only opened up to the private sector activities from which it had
previously been barred, but a private-sector mentality has also pervaded the very way
in which public bodies are organised and public services are provided (even where
these have remained in public hands).
58
As well as the document in the previous footnote, see Powell M. (2002), Rouse, J. (2002),
Smith, J. (2002).
343
Thus, the country has undergone a process, which started during the long period of
Conservative government, of transfer of some significant areas of public services to
the private sector. This happened with telecommunications, gas, water, electricity and
the railways. Council housing was sold to its tenants on favourable terms, and
construction of new council houses was limited. In the area of broadcasting, a legal
framework was created in 1990 to allow private entities to use analogue broadcast
frequencies and thus to provide an alternative to the BBC.
The main instrument used in reshaping the UK’s social system during the long period
of Conservative government was contracting-out. The aim of this was to take the
supply of some services out of the hands of local authorities.
In some areas, services were also contracted out to voluntary organisations or

individual citizens who carried out the activities free of charge. Regarding non-profit
making organisations, it should however be noted that a lively debate has emerged in
the UK about whether it is appropriate to keep in place the significant (tax and other)
concessions that the law grants them, thus giving them a de facto advantage over
other organisations59.
An important pillar in the public service model of the 1980s was compulsory
competitive tendering (CCT). This established the principle by which local councils
were required to submit a specified set of activities to a bidding process. However,
this procedure left open the possibility that the local authority would itself win the
contest (in the absence of private bidders or on merit), but in this case the services it
provided would in future have to be carried out on the basis of private sector
economic criteria60. The activities subject to this mechanism of contracting and
59
Soldati, N. (2000) 546 ff
60
Fenwick, J., Shaw, K., Foreman, A. (1994), 45-55
344
supply, are set out in the national rules contained in the Local Government Acts. The
1988 Act made the use of this procedure compulsory, applying to street cleaning,
cleaning of buildings, collection of refuse, upkeep of open spaces, catering for
schools and welfare schemes, and the repair and maintenance of vehicles. This list
was gradually extended over the years to include leisure management and some
departments of local councils themselves, such as finance, legal, architecture, and
property management.
As has already been stated above, the use of competitive instruments (in particular
CCT) was the method by which central government reduced the level of autonomy
enjoyed by local authorities. This instrument, which has been very widely adopted,
has led to significant centralisation of power in the hands of central government,
which has become the guardian of its operation and of competition61.
There are other reasons why this process of change has had a very significant impact
on local authorities. The latter had been established in a system of democratic
accountability for their actions. That is, the evaluation of their work was carried out
above all according to political criteria and influenced by votes at elections. The
changes carried out in the 1980s have led to a very different situation, where
accountability is based purely on economic criteria and in terms of efficiency and
value for money as the market dictates. People on the receiving end of public services
are increasingly considered as users rather than citizens.
The strengthening of the user concept has progressively paved the way for the
consumer-orientation concept, reflecting the increasing attention paid to users by the
public sector. This customer-awareness is further strengthened by the creation of
61
Fenwick, J., Shaw, K., Foreman, A. (1994)
345
consultation procedures, bringing services closer to the user, and the creation of
performance and customer satisfaction league tables.
The process of building the new model of welfare produced another important
phenomenon: that of value for money indicators, particularly by virtue of the changes
to the concept of accountability itself.
Local councils are required to monitor and evaluate the activities of private-sector
service providers on the basis of these indicators. Just as local authorities have the
task of monitoring private companies, they themselves are subject to performance
monitoring by central government. This monitoring is carried out by the Audit
Commission62, an independent public body, which sets the criteria for evaluation of
performance and publishes reports on the state of the nation63.
The Local Government Act 1999 made significant changes to the instruments that the
law confers on local authorities for deciding on companies providing public services.
The system of CCT was replaced by Best Value64. Highly pragmatic in nature, this
method requires local authorities to formulate a performance plan for each service
with the declared aim of securing best value for each service. This new system has
also had an effect on the accountability of local authorities, which is now evaluated
with reference to the performance plans. By reducing the role of competition in the
provision of services, it also increases their scope for action.
62
The Commission was set up by an agreement between the Office of the Deputy Prime
Minister, the Department of Health and the Welsh Assembly. It checks that public money is
spent effectively, efficiently and economically at local level and in the supply of services
relating to criminal justice, health and housing. For further information on the Commission,
visit its website at www.audit.commission.gov.uk .
63
See 1995 Report.
64
See Barnes, M. (1999), 60-75; Bartlett, B. (1999), 102-118.
346
One of the most distinguishing features of the Best Value legislation is that it requires
local authorities to consult users of each public service. This mechanism is supposed
to shape the service to the various specific requirements of the users, and thus to
enhance local democracy65.
Under the previous system (CCT), of course, decisions on the supply of services were
entirely a matter for local authorities. In spite of this clear pointer, no provision was
made for a single model applicable to all local circumstances according to which the
individual authorities would have to effect this opening up to the outside; rather, each
of them was instrumental for this purpose66.
Among the various approaches taken by local authorities, some did not introduce any
significant innovations in the management of public services (such as the cases where
a service panel was set up), whereas in others, the means made available to users
encouraged the expression of new ideas from the community (the community
development approach). In yet others, residents’ meetings were organised, which
simply turned into forums for political propaganda and did not engender any real
sense of participation among those involved.
The common feature in all the different areas is unquestionably the difficulty in
designing a universal model for consultation, especially in view of two factors:
firstly, the costs of such activities and the extra work they mean for local government;
and secondly, the influence that the nature of the local ruling class will have on the
results of those activities.
65
Dibben, P., Bartelett, B. (2001) 43-58
66
See Modernising Local Government: The Government Agenda, 1998.
347

and results)
Public administrations in Great Britain are highly computerised, and, as many annual
reports published by specialised companies (for example, by Assinform) indicate, IT
and the development of telecommunications in Great Britain are a key part of the
Government’s strategy for bringing the institutions closer to the citizen. Indeed, the
aggregate ICT (Information and Communications Technology -
http://www.becta.org.uk/index.cfm) market for the public sector clearly shows that
Great Britain is a leading country, along with France and Germany, in the increasing
use of hardware and software in the public sector, including at regional and local
level. This is reflected particularly in investments in new IT architecture, in keeping
with Internet/Intranet or ERP applications.
In this context, Great Britain’s efforts to implement the European Commission’s

directives on investment in information technology in the public sector have made it
the first country in the European Union to achieve the objectives set out by the
European Commission in this area. Certainly, this is not a policy that has been
imposed from above, but is based on consensus among citizens, as expressed through
a Government-commissioned survey in 1996, which examined public interest in
information technology (computers, bar code readers, fax machines, ticket machines).
Many of these programmes were introduced thanks to the work of the National
Council for Educational Technology, which was renamed in March 1998 as the
British Educational Communications and Technology Agency. Although a
348
centralised body, the scope of its activity means that it has quickly developed at a
regional and local level as well. In the last year, the National Council for Educational
Technology has acted on behalf of the Department for Education and Skills,
promoting, among other things, IT in schools, but also investment in new technology,
multimedia products and educational software.

networks
It has recently been pointed out, in the light of the increasingly poor turnout at
general elections, that “people are becoming used to conducting their transactions in
flexible ways – by post, phone, in the street or supermarket, and increasingly at home
via e-mail and the web – and the burden of walking to a polling station to cast a vote
could seem anachronistic”67.
It should be remembered that, in order to vote in the United Kingdom, citizens must
be listed on the Electoral Register, which is currently updated each month at the
initiative of the citizen (for example when he moves house). This system is known as
rolling registration. Registered voters receive a polling card from the authorities,
which states the type of election and the location of the polling station. It then falls to
the elector to go to the polling station to cast his or her vote on an individual ballot
paper, enabling the elector to be identified in the event that this becomes necessary68.
Finally, the counting of ballots takes place elsewhere than the polling station (except
in the case of local elections). Candidates and their agents may be present during all
67
The Independent Commission on Alternative Voting Methods, Election in 21st Century:
from paper ballot to E-voting, 5.
68
See Ballot secrecy: electoral reform Society-Liberty working party report, Electoral Reform
Society, 1997.
349
electoral business, so that the system benefits from a high level of transparency, in
addition to security and secrecy. In general, the counting of votes is not subject to
significant delay, partly because only 0.3% of ballot papers are spoiled.
The Representation of the People Act 2000 provided for experiments with new voting
methods for the local elections of May that year in 32 local authorities and in
London. The experiment introduced postal voting, the use of electronic voting and
counting machines, longer opening hours for polling stations, and the use of mobile
polling stations69.
The main alternative voting methods are:
− Postal voting
− Telephone voting
− Online voting.
In addition, there are voting and counting methods that may be introduced
in the future. These would alter the way that elections are currently
conducted, consisting of computerised voting at polling stations and
(independently of this) electronic counting.
With respect to both voting and counting methods, the advantages, disadvantages,
risks and possible solutions have quite properly been highlighted.
69
See Piloting New Electoral Arrangements, a Local Government Association Briefing for
May 2000 elections, LGA Publications, April 2000; It is interesting to note that private
organisations have also been trying to change their internal voting methods – trade unions
are one such case.
350
For example, postal voting does not represent a real break with the traditional way of
organising elections, as it is in any case used alongside polling stations. The 2000 Act
currently offers electors in England, Scotland and Wales the possibility of voting by
post, whilst there are some restrictions in Northern Ireland70. In 2001, 5.3% of votes
were cast by post (against 2.4% in 1997). However, following the 2000 reforms,
universal postal voting was used in some areas on an experimental basis. On 4 May
that year, citizens voted for some borough councils by universal postal ballot.
On the basis of the guidelines contained in the legislation approved by the

Westminster parliament, all registered electors in those areas experimenting with
universal postal voting were sent the necessary materials for casting a postal vote. In
each case, local authorities were required to work hard to assist electors with the new
system. Voting was permitted to commence between 24 and 7 days before the
election date.
Whilst postal voting would appear to offer a high standard of secrecy, increased
participation, and cost savings, its security is more questionable.
Similarly, telephone voting, so far little used in the United Kingdom, seems to offer a
fast, secure alternative to the traditional method of voting that will potentially
increase participation at a reasonable cost.
However, let us now turn to what seems to be the real challenge to the traditional
organisation (and regulation): electronic or online voting. The United Kingdom has
only very recently begun to experiment with electronic voting for public bodies,
although it was used a number of years ago in some local referendums. In 2000 and
2001, Bristol City Council and the London boroughs of Croydon and Islington
70
In Northern Ireland, notwithstanding those restrictions, the use of postal voting was far
higher than average: 3.3% compared with 2.4% in the 1997 general election.
351
experimented with this type of voting. Electors in these areas were able to vote by
post, by telephone or on line.
Turnout in Bristol was 40.2%; in Croydon, 35.1%; but only 2.7% and 3.4%
respectively used the Internet to vote. If these percentages are analysed by area, social
group and age, however, it becomes clear that the use of Internet voting is far more
widespread in areas with a wealthier, better educated population, because Internet
access is not yet universal.
In the referendum in Islington, on the other hand, where turnout was 22.3%, only
2.4% used the Internet (2.4% voted by telephone).
In the 2003 local elections, following government approval, some 59 local

authorities, encompassing 6.5 million voters, experimented with alternative voting
methods, between them including all such methods. Of these local authorities, 32
experimented with all-postal voting, seven experimented with flexible opening hours
and locations of polling stations, while 17 used electronic voting, along with voting
by telephone, via the Internet and through digital television. Finally, four authorities
used e-voting in conjunction with postal ballots.
The experiments in these localities showed that the use of postal voting, for example,
increased turnout. The beneficial effect of e-voting on turnout, on the other hand,
seems to be far more doubtful71, even though the trend towards use of e-voting is
increasing.
71
See Piloting Alternative Voting Methods in the 2003 Local Elections in England, Report and
Comments by the Electoral Reform Society. For an account of the voting experiments in
2003, see also the Electoral Reform Society’s website.
352
E-voting offers a high degree of flexibility to electoral procedures and positively
addresses one of the main reasons for abstention in the United Kingdom, given that
21% of voters who failed to vote in the 2001 general election stated that it was too
difficult to get to the appropriate polling station72. However, in any discussion on
Internet voting, it is also important to consider the issue of access, which is far more
widespread in some geographical areas and social classes than in others.
Thus, the Internet makes possible new and innovative voting methods, but also
changes the way that public institutions and bodies communicate, providing a
considerable boost to openness and transparency. The institutions use the net to
increase participation and to stimulate interest among citizens.
For example, it is possible to follow the proceedings of the devolved institutions on

the Internet. On some of the Assemblies’ websites, for example, it is possible to
watch live sessions of parliamentary committees, thus increasing the openness of the
authorities’ work.
The role that information and communications technologies are progressively

acquiring in public administrations and public service providers has been apparent for
some time. In the May 2000 Modernising Government White Paper, there is also an
explicit reference to the impact that ICT is intended to have on public services.
EGovernment is now able to develop using many and various means, such as the
creation of websites and of call centres that give information on services and how to
72
See Electoral Commission, Voter attitudes surveys for the 2001 general election,
www.electoralcommission.gov.uk/moripoll.htm.
353
use them; the use of smart cards for the acquisition and exchange of data; and digital
television, to raise awareness of services and differentiate between them.
Furthermore, these individual instruments can be rendered interoperable thanks to the
digital technologies opening up their content.
Each year, the UK government spends a significant budget on ICT73, in addition to

that spent by external private companies and associations.
Numerous studies have highlighted how ICT can transform the relationship between
various levels of government and members of society, whether viewed as service
users or citizens, while these technologies represent “the biggest change for the
United Kingdom’s local authorities”74.
Before the available technologies reached their current stage of development, local
authorities were already using databases and computerised administrative tools75, but
the impact of new technologies has made necessary a complete rethink of internal
working practices and relations with the public. The advantages of these innovative
tools are clear, both in terms of accessibility of information and services,
transparency, and openness, but also of distribution of services and information on
the ground. Anyone who needs to deal with local government, whether as a citizen or
as a service user, can potentially choose not only what to request, but also when and
where to do so.
As experts have shown, whilst the academic debate has focused on the relationship
between democracy and ICT, these technologies are in practice most widely used in
73
See UK Parliament’s Public Accounts Committee First Report, which put public sector
expenditure for 1998-1999 at £7 billion.
74
See Cremin, M.(1999).
75
Bellamy, C., Taylor, J.A.(1998); Compare Automatic Data Processing (ADP)
354
relation to public services. Indeed, in the last twenty years, the New Public
Management idea has permeated the way public services are run and has put the
emphasis on citizens as users rather than players in democracy.
However, this distinction between citizen and user has some difficulty penetrating
local authorities’ work with new technologies. This is the case because the first
practical tool that local authorities have used has been the creation of websites; by
now, almost all local authorities have a presence on the web76. On these sites, it is
difficult to distinguish clearly between content aimed at people in their capacity as
citizens and that aimed at users77. Further developments in ICT will be required
before distinguishing between different types of content becomes easier.
A study into hundreds of local authority websites carried out at the end of the 1990s
showed that these were the main form of ICT used, and, at the same time, that these
websites rarely contained any services as such, but were purely sources of
information with varying degrees of relevance to each authority’s tasks.
One of the most significant problems here has been keeping sites up to date, with
news of important events in the local community was still not online several weeks
afterwards: “in this sense, local government appears to lag behind some private
sector pratice”78. This failure arose from a lack of technical capacity and from
distrust of new technology, but it is clear that local government long retained an
oversimplified idea of the use of ICT.
76
See Horrock, I., Hambley, N. (1998), 39-44.
77
Cremin, M. (1999), 11
78
Cremin, M. (1999), 21-22
355
However, the Labour governments of the last few years have put a great deal of
emphasis on the use of ICT, not least in public services. To this end, the website
www.ukonline.gov.uk, managed by the Office of the e-Envoy, part of the Cabinet
Office, has a section where it is possible to access some services directly, in addition
to the traditional section that contains information. In the “Do it online” part of the
site, it is possible to register to vote, buy a TV licence by credit card, apply for a
passport, calculate personal taxes, etc. There is also an alphabetical list of all local
authorities and of numerous other services divided by subject or area of interest79.
79
The site has some strict rules for users who access it. These can be found in the section
entitled “Terms and Conditions.”
356
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USEFUL LINKS
BBC www.bbc.co.uk
Parliament www.parliament.uk
Welsh Assembly www.wales.gov.uk

Scottish Parliament www.scottish.parliament.uk
National and regional political parties www.labour.org.uk
www.uup.org
www.dup.org.uk
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www.niup.org
http://sinnfein.ie/
www.allianceparty.org
364
SPAIN
INTRODUCTION
Although Spain is undoubtedly one of the most decentralised states in democratic

Europe, devolution remains a key issue in Spanish politics. This is borne out by
recent political and institutional events which are calling into question the solidity of
the present devolution system and with it the overall future of the autonomic state.
The government has seen a host of requests from governing parties in various regions
for different forms of autonomy, ranging from the declared sovereignty of Basque
nationalism to the incisive declarations of autonomy from the Catalan left. The
Catalonia regional elections of 16 November 2003 marked the end of a historic stage
in Catalan politics, dominated by the figure of Jordi Pujol, leader of the moderate
Catalan nationalists. Mr Pujol had led the Catalan Generalitat without interruption
since 1980 and had shown a strong commitment to dialogue and negotiation with
central government. The new coalition government headed by the Catalan Socialist
Party (PSC) leader, Pasqual Maragall, has announced important changes in social,
fiscal and economic policy which it plans to fully implement during the current
legislature, and proposes wide-ranging reform of the statute of autonomy, with the
aim of significantly extending the region's autonomy within both the autonomic state
and the European Union.
In the Basque Country, the Basque prime minister Ibarretxe has announced that a
consultative referendum will be held at the end of 2005 on the new draft political
statute (the Estatuto político de Euskadi). The draft was approved by the Basque
government on 25 October 2003 and is now being discussed at the parliament in
Vitoria. The draft calls for the territorial authorities that historically make up the
Basque region to be granted the right to self-determination, and voices the intention
to set up an autonomous legal entity known as the Community of Euskadi; this
365
community should be able to associate freely with the Spanish state and establish a
new system of political and legal relations with it, enabling it to carry out its duties
with full autonomy. To this end, the new statute significantly extends the
competences of the Community of Euskadi, not only as regards cultural and language
matters but also in the economic and fiscal field, leaving the Spanish state a limited
number of competences in a small number of fields. The draft statute also provides
for the establishment of an autonomous judicial authority and a special division of the
constitutional court, known as the Tribunal Euskadi-Estado, to be responsible for
settling any disputes of competences between the Spanish state and the institutions
and authorities of the Community of Euskadi. On 13 November 2003 the Madrid
government responded to the challenge posed by the Basque nationalists by formally
contesting the draft statute at the constitutional court; shortly afterwards, it tabled a
proposal in parliament to reform the penal code, with the clear aim of sanctioning the
actions announced by the Basque government to secure approval of its statute.
Although the recent demands for autonomy by the nationalist parties in the Basque
Country and those of the left in Catalonia differ significantly in their aims and
content, their main effect has been to focus political/constitutional debate in Spain on
the question of how the country is governed. These demands were not promoted
solely by the nationalist parties' scant loyalty to the constitution; they are also the
result of original structural dysfunctions within the autonomic state that remain
unresolved. A particular shortcoming is the lack of active multilateral cooperation
between the state, the autonomous communities and the local authorities, and the
absence of a chamber that is truly representative of the subnational authorities. This
situation led the two government and opposition parties, the People's Party (PP) and
the Socialist Party (PSOE), to focus their campaigns for the 2004 national elections
on the country's system of government. The PP has tended to radicalise its dealings
with all the regionalist and nationalist groupings and has stressed the need to retain
constitutional stability in order to preserve the country's unity. The PSOE, in contrast,
366
feels that the constitutional reforms necessary to complete the autonomous regions
system (in particular, reform of the senate to turn it into the representative chamber of
the autonomous communities) should be implemented during the coming term.
Against this backdrop of far-reaching political instability, Spain has managed to

achieve a high rate of economic growth and widespread prosperity. With a GDP of
EUR 542,000 million and per capita GDP of EUR 18,110, Spain is now one of the
ten most developed western economies. In the last ten years, Spain has significantly
reduced its public deficit, and has made its economic system more flexible by setting
in train a privatisation programme and adopting measures to curb public spending.
The Spanish government's economic policy in recent years has sought first and
foremost to achieve real convergence with its EU partners, particularly as regards per
capita income and unemployment. The main instruments deployed have been curbing
public spending – thus enabling Spain to be a founding member of the eurozone –
and implementing an ambitious privatisation programme, thereby opening up the
markets and increasing competition. The adoption of the 2000-2003 stability
programme, which entered into force with the 2003 budget, was designed to press
ahead with these strategies. The budgetary policy laid down in the programme aims
at a substantial improvement in the main variables: public accounts, primary balance,
public savings and public debt/GDP ratio. The idea is to wipe out the deficit by a
policy of restructuring expenditure, reducing tax pressure, and measures to encourage
development plans in the fields of education, research and social policies.
In the public services sector, the transfer of new competences (health and education)
to the autonomous communities, backed by the requisite financial support, has
strengthened the role of regional authorities in the management and delivery of public
services. Devolution of health to the regions has made it possible to transfer to the
regional health services the management and supply of a number of health services
that were previously the responsibility of the national health institute (Insalud). One
367
should also not underestimate the social services provided by the autonomous
communities, which have developed advanced social welfare systems offering the
most vulnerable groups (the elderly, people with disabilities, minors, etc.) appropriate
socio-economic support. Largescale decentralisation to the autonomous communities
in recent years has further highlighted the need to transfer wider competences and
tasks to local authorities too. One recent legislative step in this direction was the
approval on 16 December 2003 of Law 57/2003 on measures to modernise local
government, designed to strengthen the local government system. More particularly,
this law promotes the application of new forms of direct democracy and the
dissemination of new information and communication technologies with a view to
increasing people's involvement in local political life. The aim here is to implement
the strategy identified in Info Action Plan XXI, adopted in 2001 by the
interministerial committee on the information society and new technologies, for
promoting ICT and eGovernment in Spain's regions. Some 300 initiatives have been
launched so far, significantly increasing the computerisation of the public authorities
and improving access to the information society for both businesses and individuals.


profile
The first constitution in Spain's political history was approved in Cadiz at the
beginning of the 19th century, opening a long cycle of political and institutional
instability which marked the whole process of developing a constitution for the
liberal Spanish state. The most recent stages in Spain's institutional development
began with the outbreak of the civil war in 1936 which led to the fall of the second
368
republic and the establishment of a dictatorship under Francisco Franco. A plebiscite
on 26 July 1947 secured the return of the monarchy and Franco's role as "regent" for
it in the interim, and in 1969 he appointed as his successor Prince Juan Carlos of
Borbon. The death of Franco and the accession to the throne of Juan Carlos in 1975
ushered in a political transition governed by a special law passed in 1976 with a
popular referendum. This restored certain basic rights and brought the election in
1977 by universal suffrage of the Cortes Generales (Spanish parliament), which was
given the task of drafting a new constitution. The new text was approved by popular
referendum, by a large majority, on 6 December 1978 and entered into force on 28
December 1978. With the specific aim of preventing the abuses of Franco's
authoritarian regime, the 1978 constitution adopted a parliamentary monarchy and a
democratic system of government, as can be seen both in the new legal position of
the Crown (Title II) and in the relations between parliament and government (Title
V). The new system involves a rationalised form of parliamentary government which
is closely modelled on the 1949 German constitution and thus assigns a stronger role
to the prime minister. The Spanish parliamentary system rests on some basic
mechanisms designed to stabilise the executive, such as the particular mechanism for
appointing the prime minister (Article 99), the "constructive motion of censure"
(Article 113) and the "automatic" dissolution of parliament (Article 99(5)). Although
these mechanisms rationalise the parliamentary system, they do not guarantee the
executive full autonomy from parliament and real stability – two factors that are
essential for the proper functioning of parliamentary government. In Spain, however,
this has also been achieved by the combined effect of various political and
institutional factors, such as the moderating role played by the constitutional court
and the constructive operation of the party system. This has combined the advantages
of one-party government (albeit sometimes without an absolute majority) with the
flexible, consensus-based coalition system, all within a generally alternating trend
369
and with different majorities between central government and the autonomous
communities1.

developments
As regards the type of State, the territorial organisation system enshrined in the 1978
Spanish constitution does not conform to classical federalist or regionalist models2.
In the context of the indissoluble unity of the Spanish nation, the constitution
recognises the right to autonomy as a general principle of state organisation. This
principle lies behind the division of the national territory into municipalities,
provinces and autonomous communities, which are to "enjoy self-government for the
management of their respective interests" (Article 137). The constitution also
guarantees implementation of the principle of solidarity (Article 138), and a "just and
adequate economic balance between the different areas of Spanish territory" (Article
139). Building on these premises, the constitution guarantees the autonomy of the
8,104 municipalities and 50 provinces which make up the Spanish state, stipulating
the democratic and representative nature of their governmental bodies (Articles 140
and 141) and the provision of sufficient funds to perform the tasks assigned to them
by law.
The constitution does not provide a priori for the existence of autonomous
communities, but guarantees the right to autonomy of nationalities and regions under
1
Chimenti, C. (2000), 4 et seq.
2
For an analysis of the originality of the territorial organisation system adopted in the Spanish
constitution, see in particular López Aguilar, J.F. (1999), 104.
370
an implementing principle which offers autonomy as a right which can only be
exercised by following one of the procedures for establishing self-government laid
down in Title VIII of the constitution. Title VIII provides several paths for this and
two separate levels of competences that may be attained3. However, the solution
adopted in the constitution does not divide the Spanish state into two levels of
autonomy, but offers any sub-state authority the possibility of choosing its own path
for establishing an autonomous community, in accordance with its particular
aspirations; the initial (but not final) level of competences will depend on the path
chosen. This is because, although the system adopted in the constitution for
distributing competences between the state and the autonomous communities
(Articles 148 and 149) is based on two lists of respective competences and a residual
clause, it gives the autonomous communities the possibility of extending their
competences after five years have elapsed, through reform of the statutes of
autonomy (Article 148(2)). The provision within the constitution for an equal
distribution of competences across the autonomous communities is not incompatible
with its recognition of certain local linguistic, cultural, legal and economic features,
known as "hechos diferenciales" (differentiating factors): this asymmetry is inevitable
in the autonomic state. In recognising these factors, the constitution introduces
criteria for differentiating between the autonomous communities with the result that
some of them demand different treatment, generally aspiring to a higher level of
competences and self-government.
3
Title VIII provides for an ordinary system of gradual access to full autonomy by a "slow
path" (Articles 143, 144 and 146) and a special system for immediate access to full
autonomy by a "fast track" (Article 151 and the second transitional provision). The fast track
takes the form of a twofold alternative procedure designed to attain the maximum level of
competences provided by the constitution, while the slow path requires a less complex
procedure for achieving an initially lower level of autonomy while offering the possibility of
extending competences through reform of the statutes of autonomy after five years. The only
communities which have acceded to the highest level of autonomy from the outset are the
three historic nations (Basque Country, Catalonia, Galicia) and Andalusia; the latter
followed the complex procedure governed by Article 151.
371
The provision of different forms of access to self-government and of two initial levels
of competences enabled the disparate regions that made up post-Franco Spain in 1978
to set up autonomous communities in just a few years. The 17 autonomous
communities that today form the Spanish state concluded their autonomy process at
the end of 1982 with the approval of their respective statutes of autonomy4.
The initial activation of a different level of competences, combined with the

recognition of the differentiating factors, led to the establishment of an asymmetric
form of regionalism which over the years has seen a partial standardisation of
institutions and competences. This process was made possible by the political and
legislative reforms adopted in the last 30 years, which extend the regulatory
framework for Spanish regionalism and are the hallmark of its steady development.
The first steps towards remedying the initial asymmetry were made with the 1981 and
1992 autonomy pacts, concluded respectively between the Democratic Centre Union
(UCD) and the PSOE, and between the PSOE and the PP. These pacts should be seen
as part of a wider reform programme conducted by the main national political
groupings with the aim of steering the autonomy process towards a cooperative form
of regionalism. The pacts made it possible to establish an identical institutional
architecture for all the autonomous communities, devise a procedure for remedying
the asymmetrical distribution of competences (Article 148(2)) and strengthen
cooperation. They were implemented by the organic law harmonising the autonomy
process (LOAPA), Organic Law 9/1992 on the transfer of powers to the autonomous
communities under Article 143, the organic laws of March 1994 reforming the
4
Spain currently comprises the two autonomous cities of Ceuta and Melilla and 17
autonomous communities: Andalusia, Aragon, the Balearic Islands, the Canary Islands,
Cantabria, Catalonia, Castilla-La Mancha, Castilla-León, Extremadura, Galicia, La Rioja,
Madrid, Murcia, Navarra, the Basque Country, Asturias and Valencia.
372
statutes of autonomy, and Law 30/1992 on the statutory framework for public
authorities and on common administrative procedures.
With the 1994 reform of the statutes of autonomy and the transfer of education and
health competences to all the autonomous communities, the process of levelling out
the competences of the autonomous communities was broadly concluded (December
2001). However, this has not produced complete uniformity. Differences remain as a
result of the differentiating factors, which enjoy constitutional recognition in some
autonomous communities and prevent total standardisation of the competence
system. At present there is one set of competences broadly enjoyed by all
autonomous communities, and a second set of specific competences enjoyed by
certain communities as a result of their differentiating factors5.
The institutional standardisation process has been concluded with the further
statutory reforms approved since 1996 by virtually all the autonomous communities,
which have significantly changed the form of regional government and strengthened
the parliamentary system.
Among the reforms designed to strengthen cooperation within the autonomic state,
mention should be made of the reform of the regulation of the senate, of 11 January
1994. This established a new legislative commission, the Comisión General de las
5
The distinct financial and tax system in the Basque Country and Navarra, the
economic/fiscal system of the Canary Islands and the existence of regional civil law and
autonomous police in some autonomous communities are examples of special competences
arising from the differentiating factors. Aja, E. (1999) 155-160.
373
Comunidades autónomas, which enables the autonomous communities to participate
more widely in the work of Spain's second chamber6.
However, the standardisation process has been hampered by trends in the other
direction which have slowed down the supposed completion of the
federal/cooperative side of the autonomy process. In 1996 the Aznar government
concluded "governability" pacts with the Catalan, Basque and Canary nationalist
parties which, in exchange for political support, granted special concessions to the
autonomous communities represented by these parties. The main political result of
these pacts was the reform of the autonomous financing system, adopted for the five-
year period 1997-2001, which gives the autonomous communities greater financial
autonomy7. It is clear that, as well as facilitating bilateral relations between the
government and the autonomous communities, these pacts aggravate the asymmetric
nature of the autonomic state by constitutionally acceding to the most insistent
demands for autonomy.
Finally and most recently, the autonomy system risks being destabilised by the
renewal of ETA's terrorism campaign, the outlawing of the Batasuna radical Basque
political party and the demands for sovereignty on the part of the "democratic
nationalist" Basques. All this could heighten the climate of uncertainty. The
application of the new organic law on political parties (No. 6/2002, approved by
parliament on 28 June 2002) led the supreme court to ban the Batasuna party on the
grounds that it gave political support to terrorism by offering institutional cover to
6
It is agreed that constitutional reform is needed to alter the role of the senate and turn it into
a chamber for representing sub-state interests. The most recent studies on this subject are by
Alonso De Antonio, A. (2001), 415-429; Pendás García, B. and Martínes Santamaría, P.
(2003), 809-840.
7
For the development of the autonomous financing system, see Aja, E. (1999), 110-118.
374
ETA (supreme court ruling of 28 March 2003)8. This exacerbated the tension
between central government and the nationalist parties in the Basque government
which, as well as being extremely reluctant to implement the ruling, began to step up
their demands for self-determination. The conflict came to a head on 25 October
2003 with the adoption by the Basque government of a new draft political statute
setting up a new autonomous legal entity, the Community of Euskadi, which may
associate freely with the Spanish state9. The Basque government also threatened to
hold a regional referendum on the proposed statute with a view to pushing it through
if the national parliament refuses to approve it.
The scale of the autonomists' recent demands has thus raised the autonomy issue so
acutely that it is causing an interinstitutional and inter-party conflict which is without
precedent in democratic Spain under the present constitution. This highlights the
genuine need to reach agreement on a definitive model of territorial organisation,
with a view to adopting the legal and political measures needed to complete the
autonomy process.

of government
The 1978 Spanish constitution refers to coordination as one of the basic principles
underpinning the activity of the public authorities. However, unlike other
8
The Batasuna party was outlawed under the ruling adopted by the special sitting of the
supreme court on 28 March 2003, consolidating the earlier decrees 6/2002 and 7/2002. The
text of the ruling can be found on the official website of the supreme court:
www.poderjudicial.es/tribunalsupremo.
9
The document approved by the Basque government is now being discussed by parliament.
Its content is outside the scope of the present study. It can be consulted via the following
link: www.nuevoestatutodeeuskadi.net.
375
constitutionally federal systems, it does not adopt a cooperative model of
intergovernmental relations to guarantee effective operation of the autonomy system.
In politically decentralised states, close cooperation between central and regional tiers
of government ("vertical cooperation") is institutionally necessary to attain a
satisfactory level of political integration. "Horizontal" cooperation is also vital to
allow regional bodies to work effectively together on cross-sectoral issues. The
Spanish constitution provides no explicit guarantee of vertical cooperation. This
failure to enshrine vertical cooperation arrangements has impeded the development of
an effective model of autonomic cooperation, facilitating the growth of bilateral
relations and leading to widespread conflict between state and regions10.
The need to introduce new cooperation mechanisms and to reduce the conflict
between state and regions has prompted constitutional jurisprudence and state
legislation to take steps to strengthen vertical cooperation.
Spain's constitutional jurisprudence has, on a number of occasions, called on the state

and the autonomous institutions to cooperate closely, affirming the importance of the
principle of constitutional loyalty between the state and the autonomous
communities. This principle seems to be drawn from the principle of federal loyalty
(Bundestreue) adopted in the German Federal Republic, albeit with significant
differences in the way it is applied.11
10
For a detailed analysis of the significance and development of cooperation in the autonomic
state, see the study by Tajadura Tejado, J. (2000), 61-145.
11
However, the principle of autonomic loyalty does not operate in the Spanish system as a
legal/constitutional obligation, as it does not strictly impede legal action by the state and
regional authorities. This matter is particularly highlighted by Aja, E. (1999), 142-144.
376
As regards state legislation, there is the above-mentioned Law 30/1992 on the
statutory framework for public authorities and on common administrative procedures,
which defines cooperation as an essential element in the proper functioning of the
autonomic state. This law introduced new cooperation instruments (consortia) and
improved the operation of existing ones (sectoral conferences, conventions), without
establishing a new model of cooperation relations between the state and the
autonomous communities.
Horizontal cooperation, in contrast, is explicitly enshrined in Article 145 of the

constitution, which states that the statutes of autonomy may stipulate the
circumstances, requirements and terms under which the autonomous communities
may reach agreements amongst themselves regarding the management and supply of
services; this article also establishes the nature of the involvement of the parliament.
The statutes of autonomy provide for two different types of agreement (cooperation
conventions and agreements) which, theoretically, the autonomous communities can
use to regulate any matters of supraregional interest. However, a series of
constitutionally prescribed limits impede the effective operation of these instruments
and prevent them being used in practice. The biggest limit is control by the
parliament, which is exercised in the national interest at the final stage of the framing
of agreements12. As a result, the autonomous communities have not developed
sufficient cooperation to guarantee a satisfactory level of coordination and
integration.
The growth of bilateral relations between state and regions in the Spanish system has
been prompted mainly by the low level of cooperation between autonomous
12
As regards the control exercised by the Cortes in the framing of interregional agreements,
see Gutierrez Vecen, C. (2000), 100 et seq.
377
communities and the inherent weakness of the state legislation governing vertical
cooperation.
However, one should not underestimate the significant progress achieved in recent
years, signalling a clear will to improve existing cooperation13. Firstly, an effort has
been made to give a new boost to cooperation by giving the autonomous communities
a role in some state bodies (state councils for telecommunications and universal
postal services, the data protection agency). The steady increase in the number of
agreements concluded between state and regions – around 500 per year since 1999 –
is a further encouraging sign. Lastly, the setting-up of bilateral cooperation
committees on matters of constitutional jurisdication has significantly reduced the
number of constitution-related disputes between the state and the autonomous
communities. These committees were set up by Organic Law 1/2000 of 7 January
2000 amending Article 33 of the organic law on the constitutional court, which
extended to six months the deadline for submitting a charge of unconstitutionality, so
as to facilitate conciliation between the state and regional institutions involved.
The local government system is based on Articles 137, 140 and 141 of the
constitution, which, as well as making provision for municipalities and provinces,
outline the basic principles underpinning their organisation. These articles establish
three basic principles for the local government system:
a) constitutional guarantee of local self-government, with specified bodies being

guaranteed the right to organise their political authority on a territorial basis;
13
Useful information about recent trends in institutional relations between the state and the
autonomous communities can be found in the study by Ramón Cólera Leirado, J. (2001),
87-116.
378
b) the democratic origin and representative nature of local government bodies;
c) financial self-sufficiency for the performance of the duties assigned to them.
Although the constitution unequivocally guarantees local self-government, practical

devolution has been slow as it depends on joint legislative action by the state and the
autonomous communities. Under the provisions of Article 149(1)(xviii) and
Article 148(2), it is up to the state to lay down basic legislation while the autonomous
communities are responsible for fleshing out the detailed measures. This generic
breakdown is made clearer by constitutional case law which delineates more
precisely the competences of the state and the autonomous communities regarding
local self-government. It is thus the task of the state to establish the minimum levels
of competence needed to guarantee the autonomy of the local authorities, while the
competent legislator (state or autonomous community, depending on the field
concerned) has the task of establishing the detailed competences (constitutional court
ruling 214/1989). This means giving the state a central role in the setting of local
provisions and leaving their implementation to the autonomous communities which,
by transferring or delegating matters and duties within their remit, can give the local
authorities effective autonomy14.
The new system of local, municipal and provincial self-government was established
under the Local Government Act (LBRL 7/1985), which went some way towards
implementing the constitutional requirements regarding the foundations for Spain's
new system of local government (Article 149(1)(xviii). The act lists core public
services which have to be transferred to the municipal authority (safety, traffic,
14
There is a wide range of autonomous competences which, by their very nature, can be
managed efficiently at local level and which should be decentralised in future. These
competences are: consumer affairs; ports; education; employment; environment; spatial and
urban planning; management of historic and artistic assets; civil protection and the voluntary
sector; health; transport and tourism. On this point, see Ramón Cólera Leirado, J. (2001),
108.
379
education, waste disposal, etc.) and gives the provinces a coordinating role designed
to "ensure full and adequate provision of municipal services throughout the province"
(LBRL Article 31(2)). In order to improve the management of these services, the act
establishes other local bodies such as mancomunidades (groups of municipalities),
comarcas (districts) and metropolitan areas, which are given responsibility for
certain muncipal services and activities in a specified area (generally, a province)15.
The mancomunidades are voluntary associations of municipalities, set up to jointly

manage certain municipal services.
The comarcas are municipal organisations directly set up by the autonomous

communities to manage certain services in fields that come within their remit.
The metropolitan areas are groupings of municipalities set up by the autonomous

communities in densely populated areas to jointly manage one or more services.
Although the act transferred certain services to local authorities, it did not give them
specific competences; these have to be transferred to them by the competent
legislative body (state or autonomous community). However, the limited number of
laws adopted pursuant to the LBRL since 1985 has not made it possible to complete
the local devolution process. In the 1990s a strong local movement arose with the aim
of strengthening local government and increasing the competences and financial
resources of local authorities to enable them to manage the interests of their
communities.
15
A detailed map showing these bodies in each autonomous community can be found on the
website of the Public Administration Ministry: http://www.dgal.map.es/cgi-
bin/webapb/webdriver?MIval=reel
380
The Spanish federation of muncipalities and provinces (FEMP) has promoted these
demands since 1996, conducting lengthy negotiations with central government and
the political parties represented in parliament. These negotiations led to the
conclusion of an agreement on local self-government which was finally adopted on
17 July 1998 with a local pact that was signed in the Council of Ministers. The
agreement represents a broad political compromise between the state and the local
authorities, whereby the signatories undertake to increase the autonomy of the
smaller subnational authorities by redefining their competences and strengthening
their institutions. However, the legislative bodies have been slow to act on this,
preventing the achievement of the objectives laid down in the local pact. The pact has
been partially implemented through the provisions of five state acts which, despite
extensive coordination and cooperation arrangements, do not implement the intended
decentralisation16. In practice, conclusion of the local devolution process depends on
the adoption of local agreements between autonomous communities and local
authorities. The idea is that these agreements should be concluded bilaterally, to
enable them to be individually tailored to the specific characteristics and problems of
each area17. To date, local pacts have only been concluded in Andalusia and Asturias.
These two autonomous communities18 have gone some way towards implementing
16
The relevant acts are: Organic Law 10/1999 of 21 April amending Organic Law 8/1985
governing the right to education; Law 10/1999 of 21 April amending Law 1/1992 of 21
February on the protection of public safety; Organic Law 11/1999 of 21 April amending
Law 7/1985 of 2 April on local government and measures for the development thereof; the
Law on traffic, circulation of vehicles and road safety; and Law 29/1985 of 2 August on
water.
17
For a discussion of the failure to implement the local pact and the development possibilities
of local government, see Calonge Velásquez, A. (2000), 150 et seq.
18
In Andalusia the laws adopted in implementation of the local pact are: Budget Law 8/1996
of 26 December; Health Act 2/1998; Law 13/1999 of 15 December on public events. In
Asturias, the provisions of the local pact are formally enshrined in Law 1/2000 of 20 June
establishing the Asturian commission for local government. For an analysis of recent
developments in local devolution in these two communities, see Rodríguez-Arana, J. and
García Mexia, P. (2003), 797-800.
381
them in their legislation by transferring certain competences (health, transport, public
events, spatial planning) to local authorities and setting up special bodies to ensure
coordinated management of decentralisation (Asturian commission for local
government).
metropolitan cities
The Spanish constitution contains no specific provisions for metropolitan areas. The
autonomous communities have competences in this field but they have not adopted
particular proposals either. However, in the last few years, cities such as Barcelona
have strengthened some aspects of city government, opening the way to a new stage
in the development of metropolitan self-government with a view to the adoption of a
national law on the main cities and urban areas.
While the city of Barcelona is geographically a metropolitan area, it is not really one
in administrative terms. It has just two metropolitan administrative bodies, namely
the transport authority and the water and waste treatment agency, plus the
mancomunidad of neighbouring municipalities for the supply of joint services.
Recently, however, Catalan political groupings opened negotiations with central

government to obtain greater autonomy through recognition of the municipal charter
adopted by the Catalan parliament in 1998. On 20 February 2002 the Catalan parties
tabled a senate motion calling on the government to adopt a draft special law for the
city of Barcelona forthwith, assigning the municipal council "the capacities and
competences" recognised in the Charter19. Subsequently, the minister for public
administration, Jesús Posada, formally recognised the Barcelona municipal charter,
19
El País newspaper of 21 February 2002: www.elpais.es.
382
undertaking to implement it by adopting a law on major cities that specifically
mentions the charter20.

The drafters of the Spanish constitution deliberately opted for a devolution model that
could be further tailored to different requirements, and this has enabled the political
parties to play a key role in the evolution of the autonomic state.
The two main national political parties – from 1978 to 1982 the Democratic Centre
Union (UCD) and the Socialist Party (PSOE), and from 1982 to 2003 the PSOE and
the People's Party (PP) – have played an important role in the constitutional
development of the autonomic state, with the adoption of important political pacts in
1981 and 1992 which wound up the first stage of the autonomy process. The laws
adopted in implementation of these pacts merely gave legal status to the guidelines
already drawn up by the political authorities. However, although these parties
cooperated effectively during the first stage of the autonomy process (1981-1996),
there was deep disagreement about the definitive model of territorial organisation
which would conclude the political side of the autonomy process.
After the general election in 2000, the combined effect of the absolute majority
obtained by the PP and the Basque and Catalan demands for national self-
determination caused serious instability, which severely tested the current model of
20
To this end, the Public Administration Ministry has recently published a long report on
major cities and urban areas (Informe sobre las grandes ciudades y las áreas urbanas,
which can be consulted at: www.dgal.map.es/cgi-bin/webapb/webdrivermival=cg.
383
political devolution and threatened its very survival21. As a result, the PP government
and the PSOE opposition (the two parties which underpin the operation of Spain's
political system) have focused their debates and disputes on the local government
system. In the period 1996-2000, the PP essentially handled the devolution process
by means of bilateral negotiations with the Basque and Catalan nationalist parties, but
from 2000 onwards with a homogeneous government it was able to uphold the unity
of the country – a policy criticised by the other parties as being anti-autonomy and
recentralising. In contrast, the PSOE, which aspires to govern with the future support
of nationalist or regionalist parties from autonomous communities such as Andalusia,
the Balearic Islands, Catalonia and Galicia, has been obliged to accept proposals from
the traditional nationalist groupings. This is confirmed by the paper adopted by the
PSOE at the self-government conference of 19 January 2003 which, with an eye to
the upcoming elections on 25 May, set the following key objectives for the party's
autonomy policy: improvement of the distribution of competences and resources
between the state and the autonomous communities; strengthening of
intergovernmental cooperation, through the establishment of a conference of the
presidents of the autonomous communities; and constitutional reform of the senate, to
make it the representative chamber for the autonomous communities22.
At least in the early stages of the autonomic state, the absence of specific legislation
limiting political parties' ability to run their own affairs, together with Spain's
particular and incomplete democratic history, meant that the Spanish party system at
national level was not conducive to the establishment of regionalist structures. Even
today, the party system is not highly decentralised, although the constitution's
21
For an analysis of recent political developments in the autonomy process, see Blanco
Valdés, R. (2003), 105-132.
22
El País of 19 January 2003: www.elpais.es.
384
requirement of "internal democracy" (Article 6) has gradually led the parties to adopt
a stronger regional dimension by setting up regional conventions and assemblies
which play a part in the framing of policy guidelines23.
Spain's party system is notable for the large number of nationalist and regionalist
parties that are represented politically in a single autonomous community. The
regionalist stance of these parties makes it difficult for them to make an impression at
national level. However, even though these parties do not gain a high percentage of
votes in national elections, the high concentration of votes in a given region still
enables some of them to obtain a considerable number of seats in the chamber of
deputies. Also, from 1993 to 2000, the fact that no party had an absolute majority in
the chamber of deputies considerably strengthened the hand of the nationalist parties
at national level (for instance, the Catalan and Basque nationalist parties played a key
role in the governability of the Spanish state).
Although it is difficult to establish a clear line of demarcation between regionalist and

nationalist parties, it is possible to distinguish between those political formations
which aspire to strengthen the self-government of their autonomous community by
working with central government on the one hand, and those whose autonomy
demands are so ambitious as to sometimes verge on the unconstitutional on the other.
The latter would include some of the nationalist parties, more particularly those on
the Basque nationalist front (Basque Nationalist Party (PNV); Eusko Alkartasuna ed
Eskerra Batua) which, on 25 October 2003, approved a draft political statute
demanding full self-determination for the Basque people. There are other radical
23
As regards the organisation and operation of political parties, see Navarro Méndez, J.
(1999), 330-370.
385
minority groupings which fall outside the Spanish political system, such as the now
outlawed Batasuna party, and violent nationalist groupings such as ETA, whose
autonomy demands go beyond the bounds of constitutional loyalty and autonomous
co-responsibility.
The autonomous communities have emulated the state model of social cooperation at
local level. The cornerstone of this is the economic and social council (CES), which
represents the various strands of Spanish society. The autonomous communities
pursue economic and social cooperation by setting up their own economic and social
councils, the composition and operation of which usually reflect those of the national
economic and social council.
The establishment of regional economic and social councils has provided an

institutional forum for ongoing dialogue and communication between the social
partners and representatives of the regional administration, and has ensured that the
latter play their role in the planning and implementation of regional socio-economic
policy. To this end, the regional economic and social councils have the following
advisory duties:
a) at the request of the regional government, they issue non-binding opinions and
assessments of the main regional socio-economic policy and planning instruments;
b) they conduct studies and surveys on topics of particular regional interest;
c) they draw up an annual report on general labour market trends and the regional
socio-economic situation, which they submit to the governing council of the
autonomous community.
386
Immediately under these regional economic and social councils, virtually all the
autonomous communities also have a number of sectoral committees, reporting to the
individual authorities. These play a specific intermediary role to facilitate the
conclusion of agreements between economic operators and the regional authority.

LEVEL
In Spain, elections are held every four years, by universal suffrage and direct secret
ballot, to elect members of the national, regional and local assemblies.
The electoral system for the two chambers of parliament (chamber of deputies and
senate) is governed by the constitution and by Organic Law 5/1985 on the general
electoral system, which lay down separate rules for each chamber. The chamber of
deputies has 350 members and is elected by a proportional system using the d'Hondt
method, with party lists for each province. The number of deputies elected for each
province is roughly proportional to the population, but such as to ensure that each
province has at least two deputies. A party must also obtain at least 3% of the vote in
order to take part in the proportional distribution of seats. The senate has 259
members and is also elected every four years, using a two-tier proportional majority
system whereby each province24 elects four senators and a further 51 are elected by
the autonomous communities (one for each community, plus one for every million
24
This rule does not apply to the island constituencies, where the number of senators varies
from three (Gran Canaria, Majorca and Tenerife) to one (Ibiza-Formentera, Minorca,
Lanzarote, Fuerteventura, Gomera, Hierro, Las Palmas) and the autonomous cities of Ceuta
and Melilla, which each elect two senators.
387
inhabitants, elected by the representative assemblies from among their members
according to the rules of the proportional system).
The election of the autonomous assemblies is governed by the respective statute of

the autonomous community concerned. Under Article 152 of the constitution, the
assembly is elected by universal suffrage in accordance with a system of proportional
representation that also has to ensure the representation of the various areas of the
territory. The representatives of the regional assemblies are elected by a proportional
system using the d'Hondt method, with party lists for each province (Andalusia,
Aragon, Castilla-La Mancha, Castilla-León, Galicia and Valencia) or region
(Cantabria, Madrid, Navarre and La Rioja). The members of the local assemblies are
elected using the same system and the same mathematical formula, but with a higher
exclusion threshold (5%).
A comparison of the results of recent national and local elections shows that Spanish
voters have become quite volatile in their party preferences.
The results of the 12 March 2000 elections for the chamber of deputies and the senate
opened a new electoral cycle with the PP gaining an absolute majority, giving a clear
indication of the change which had occurred in the political stance of the Spanish
electorate in the preceding few years (see Table 2.1). This change had been
foreshadowed by the results of the previous general election (1996), which gave the
388
PP what was generally termed a "bitter victory"25. However, the trend was only partly
confirmed by the local and autonomous community elections of 25 May 2003, which
saw the PSOE push ahead, gaining 200,000 more votes than the PP and securing
34.71% of the vote compared with the PP's 33.84% (see Table 2.2). Whilst this result
cannot be interpreted as confirming full support for the PP, the small difference
between the number of votes for the two main parties shows that there were no real
winners or losers in these elections, which did not substantially alter the balance of
political power in the country26.
Table 2.1 Results of the 12 March 2000 elections for the Chamber of Deputies
PARTY VOTES VOTES SEATS SEATS
% %
45.24
Partido Popular(PP) 10,321,178 183 52.29%
%
Partido Socialista Obrero Espanol
7,918,752 34.71% 125 35,71%
(PSOE)
Izquerda Unida (IU) 1,263,043 5.54% 8 2.29%
25
The PP won the 1996 election with a slim majority (340,000 votes and 45% of seats) over
the PSOE. Despite its significantly weakened political position and contrary to predictions,
the PSOE held on to 40% of the seats in parliament. The relative majority secured by the PP
led it to seek parliamentary support from nationalist parties such as the CIU and the PNV,
thereby enabling it to form a government. The special circumstances surrounding the 1996
election and its results led politicians and academics to speak of a "bitter victory" for the PP
and a "sweet defeat" for the PSOE, as the latter saw its superiority confirmed with a 50.9%
share of the vote. For more details of the particular conditions which led to the PP victory in
1996, see Ramón Montero, J. (1996), 84.
26
The PP won a majority of votes and seats in the regional assemblies of eight autonomous
communities: the Balearic Islands, Cantabria, Castilla-León, Valencia, Madrid, Murcia,
Navarre and La Rioja. The PSOE retained its position in the autonomous communities
where it had won in 1999, namely Extremadura, Castilla-La Mancha and Asturias. The
election results do not automatically produce majority governments because in some cases
the parties conclude post-electoral coalition agreements with minority parties. For a detailed
analysis of the last elections, see the report on the 2003 elections available on the El País
website: www.elpais.es.
389
PARTY VOTES VOTES SEATS SEATS
% %
Convergència i Unió (CIU) 970,421 4.25% 15 4.29%
Euzko Alderdi Jeltzalea-Partido
353,953 1.55% 7 2.00%
Nacionalista Vasco (EAJ-PNV)
Bloque Nacionalista Gallego (BNG) 306,268 1.34% 3 0.86%
Coalición Canaria (Cc) 248,261 1.09% 4 1.14%
Partido Andalucista (PA) 206,255 0.90% 1 0.29%
Esquerra Repubblicana de Catalona
194,715 0.85% 1 0.29%
(ERC)
Iniciativa Catalona Verdi (IC-V) 119,290 0.52% 1 0.29%
Eusko Alkartasuna (EA) 100,742 0.44% 1 0.29%
Chunta Aragonesista (CHA) 75,356 0.33% 1 0.29%
TOTAL 22,078,234 96.77% 350 100.00%
Other 736,233 3.23%
Source: Election Board of the Chamber of Deputies
Table 2.2. Results of the local and autonomous community elections of 25 May 2003
VOTES
PARTY VOTES MEMBERS
%
Partido Socialista Obrero
7,972,995 34.71 25,709
Espanol (PSOE)
Partido Popolar(PP) 7,772,934 33.84 26,657
Izquierda Unida (IU) 1,390,673 6.06 2,308
Convergència i Unió (CiU) 789,936 3.44 4,230
RESTO 861,865 3.75 2,103
INDEP 723,577 3.15 3,508
Esquerra Republicana de Catalunya-Acord
417,293 1.82 1,347
Municipal (ERC-AM)
(Euzko Alderdi Jeltzalea-Partido Nacionalista
408,153 1.78 993
Vasco/ Eusko Alkartasuna ( EAJ-PNV/EA)
Partido Andalucista (PA) 333,691 1.45 707
Iniciativa Catalunya Verds –EPM (ICV-EPM) 335,289 1.46 404
Bloque Nacional Gallego (BNG) 325,492 1.42 605
390
VOTES
PARTY VOTES MEMBERS
%
Euzko Alderdi Jeltzalea-Partido Nacionalista
76,011 0.33 722
Vasco (EAJ-PNV)
Coalición Canaria (CC) 283,711 1.24 495
Euskal Herritarrok (EH) 283,711 1.24 495
Iniciativa per Catalunya Verds-Entesa pel
283,711 1.24 495
Progrés Municipal (IC-V-EPM)
BLOC-Esquerra Valenciana
139,494 0.61 309
(BLOC- EV)
Eusko Alkartasuna (EA) 30,399 0.13 158
OUV 86,805 0.38 135
Partido Aragonés (PAR) 85,817 0.37 1,076
BLOC-VERDS 85,817 0.37 1,076
Union del Pueblo Navarro (UPN) 99,940 0.44 375
Chunta Aragonesista (CHA) 88,884 0.39 213
Grupo indipendente Liberal (GIL) 88,884 0.39 213
Partido Regionalista de Cantabria (PRC) 66,594 0.29 301
Centro democratico y social y Union centrista
66,594 0.29 301
(UC-CDS)
Partido Socialista de Andalucía (PSA) 58,808 0.26 55
Union del Pueblo Leonés (UPL) 45,807 0.20 246
Partido Socialista de Mallorca-Entesa
35,508 0.15 102
Nacionalista (PSM-EN)
Unión Renovadora Asturiana (URAS) 35,508 0.15 102
Unión Mallorquina (UM) 33,144 0.14 98
TOTAL 23,274,649 67.36 65,544
Source: Ministry of the Interior
Turn-out at both these last two elections was rather low, at under 70%.
391
Ignoring fluctuations caused by exceptional political, economic or social
circumstances, the average turn-out can be said to be around 70% (Table 2.1). This
rather modest level is similar to that of certain other European countries27. It is
difficult to find a general reason for high or low turn-outs, as it has been shown that
turn-out depends more on the economic climate at the time of the election than on
structural factors28. However, it is fair to say that politico-cultural variables (the level
of party identification) and institutional factors (the electoral system) are generally
the most important determinants of electoral behaviour and thus also of the level of
participation in political life29.
At national level, both the low level of identification with a particular party and the
not fully proportional representation system influence the behaviour of Spanish
voters, who prefer to cast a "useful" vote, i.e. to vote for a party that can realistically
win seats in parliament30. This explains why Spanish voters have focused on a limited
number of parties and on essentially moderate options. This stance, backed by the
low level of party fragmentation and polarisation in the Spanish political system, has
fostered a mainly two-party system, fluctuating slightly according to the political
cycle, which has led to fairly solid government majorities at national level.
27
On this subject, see the study by De Battisti, S. (2001), 79-108, which points out that a
significant number of the countries under discussion have an average electoral turn-out of
between 70% and 80% (Germany, United Kingdom, France, Switzerland, United States).
28
For a discussion of the factors and conditions influencing election turn-out in Spain, see
Ramón Montero, J. (1996), 84.
29
De Battisti, S. (2001), 83. The author looks at the phenomenon of abstentionism in 19
countries in different cultural areas, analysing regulatory/institutional and historical/cultural
factors.
30
On this point, see Ramón Montero, J. (1996), 90-96.
392
Table 2.3 Turn-out in recent elections for the Chamber of Deputies
YEAR Votes cast % Non-voters %Blank % Spoilt % Deputies
ballots ballots
2000 23,339,490 69.71 10,629,814 31.29 366,823 1.57 158,200 0.7 350
1996 25,202,106 77.47 73,297,267 22.53 243,345 0.96 125,782 0.5 350
Source: Election Board of the Chamber of Deputies
At local and autonomous community elections, in contrast, and with a few specific
exceptions, average turn-out is a few percentage points lower than in national
elections. In the last three local and autonomous community elections it has stood at
67.08% (see Table 2.4). In such circumstances, turn-out can significantly affect the
result. Thus, for example, the higher turn-out of young voters in the 25 May 2003
local and autonomous community elections enabled the PSOE to win by a slim
majority (200,000 votes).
Alongside lower turn-out, autonomous community elections also tend to see stronger
splits into nationalist groupings, producing different voting patterns and different
party systems. The existence of strong nationalist parties in some autonomous
communities and the presence of regionalist parties in others affects the level of
regional party fragmentation. The two-party system is much less in evidence, partly
because of the more proportional effects of regional electoral systems and, more
importantly, because of the focal position of the regional parties. The autonomous
communities which have moved furthest from the two-party system are the Basque
Country, Catalonia and Navarre, where subnational parties have gained over a third
of the vote, followed by the Canary Islands and Aragon.
393
Table 2.4 Turn-out in recent local and autonomous community elections
YEA Votes % Non- % Blank % Spoilt % Councill
R cast voters ballots ballots ors
2003 23,274,6 67.3 11,280,2 32.64 404,99 1.7 307,607 1.3 65,544
49 6 56 5 3 2
1999 21,497,3 64.0 12,088,5 35.99 415,40 1.9 194,970 0.9 65,265
88 1 69 1 3 1
1995 22,333,3 69.8 9,620,43 30.11 323,71 1.4 152,907 0.6 65,869
75 9 7 2 5 8
Source: Ministry of the Interior
As regards elections for Spain's many and diverse municipalities, turn-out can also be
influenced by specifically local or cultural factors such as the stance taken by local
key players. There is a large number of floating voters who can be swayed by the
particular circumstances of each election. Votes can also reflect such factors as the
influence of the personalisation of politics and clientelist links in Spain's political
culture; these factors, combined with the role of individual leaders, are especially
influential at local level.
The 1978 Spanish constitution gives direct democracy only a marginal role, as the
constitutional organisation of the state is based on the principle of representative
democracy. This move was probably prompted by the deep suspicion of mechanisms
which could lend themselves to populist exploitation in a highly unequal society such
as the post-Franco Spain of the late 1970s. The constitution offers the electorate two
instruments for direct democracy: submission of bills by "popular initiative", and
referendums.
394
The submission of bills by popular initiative (Article 87 of the constitution) is
governed by a special organic law (Organic Law 3/1984 on popular legislative
initiatives). The initiative must be proposed nationally by at least 500,000 members
of the electorate, in the form of a detailed draft bill backed by 500,000 authenticated
signatures. It may not cover taxation, international affairs, or areas governed by
organic laws or by royal pardon. Popular legislative initiatives are one of the few
expressions of direct democracy which also apply at regional level. All the
autonomous communities' statutes contain provision for these initiatives and have
appropriate legislation governing their procedures, which broadly follow the model
laid down in Organic Law 3/1984. However, some autonomous communities have
introduced specific procedural provisions. Thus, for instance, while some
communities (Aragon, Balearic Islands, Canary Islands, Galicia) allow the committee
promoting the initiative to defend its proposed bill in front of the full parliament,
others provide for a reading of the justificatory text appended to the draft by a
member of the president's office in the chamber31.
The constitution makes provision for various types of referendum at national and
autonomous community level. These are governed by Organic Law 2/1980 on the
regulation of the various implementing arrangements for referendums. The
instruments enshrined in the constitution and regulated by this law are the
consultative referendum (Article 92 of the constitution) and the constitutional
referendum (Articles 167 and 168) at national level, and the autonomous community
31
Aragon, the Balearic Islands, the Canary Islands and Galicia have provisions for
intervention by the committees promoting the initiative in the respective regional
assemblies. In Aragon, the committee can also withdraw its proposal if it considers that it
has been modified during the parliamentary procedure. In Catalonia, members of parliament
may not sit on the committee promoting the initiative, so as to ensure that the committee is
not represented when the bill is going through parliament. For more information on the
different procedures adopted by the different autonomous communities, see the 2002 report
entitled La democracia directa en España, www.demopunk.net.
395
referendum (Article 151) and the statutory referendum (Articles 151 and 152(2)) at
regional level. Constitutional and statutory referendums are obligatory stages in the
framing of constitutional laws and statutes of autonomy. Consultative and
autonomous community referendums, in contrast, are forms of popular consultation
with differing aims, conducted at national and regional level respectively.
In constitutional referendums, voting may be optional (for a partial revision of the

constitution) or obligatory (for a full revision). In a consultative referendum, the
electorate does not vote on the adoption of a piece of legislation but only on key
political decisions. These decisions must be specified in the decree calling the
referendum, which is issued by the king on a proposal from the prime minister and
with the prior authorisation of an absolute majority of the chamber of deputies. Thus,
both in the way they are launched and in their non-binding effect, such referendums
do not impinge on the primacy of representative democracy in the Spanish political
system32.
Regional referendums involve direct consultation of the people, generally with the
aim of guaranteeing the autonomy of the subnational authorities. Autonomous
community referendums are a mandatory form of consultation and are part of the
procedures for attaining self-government under Article 151 of the constitution. Under
this article, subnational authorities which wish to follow this path to autonomy must,
in order to gain the widest possible degree of autonomy from the outset, submit their
self-government project to the electorate. Although this instrument is a necessary
stage in the establishment of an autonomous community, it has only been used four
32
Chimenti, C. (2000), 12 et seq.
396
times because only Andalusia, Catalonia, Galicia and the Basque Country have
acceded to the highest level of autonomy33.
A statutory referendum under Article 152(2) is not mandatory for reforming the
statute of autonomy of all communities, but only of those operating under Article 151
(Andalusia, Catalonia, Galicia and the Basque Country). Once approved as a draft
organic law, and before being promulgated, the reform of the statute must be ratified
by a referendum of the electorate of the community concerned. The difference
between this case and those covered by Article 143 is that, for the latter, a referendum
is an optional but not essential stage in reforming the statute, as it is governed by the
respective provisions of each statute of autonomy34. Nonetheless, one should not
underestimate the political importance of such consultation, firstly because it gives
the community a chance to give their views on the draft, and secondly because
closing the process by holding a referendum keeps the statute outside the purview of
the state35. The statutes of autonomy do not provide for any other forms of popular
consultation, because of the restriction imposed by Article 149(1)(32) of the
constitution which stipulates that only the state has competence to authorise popular
consultations through the holding of a referendum. This article is probably one of the
main factors limiting the development of direct democracy at regional and local level,
as it has prevented the autonomous communities from holding referendums without
prior state authorisation. To date, only two of the 17 autonomous communities have
introduced provisions on the procedure for holding local referendums (Catalonia in
33
Catalonia and the Basque Country held their referendums to ratify the establishment of their
autonomous communities on 25 October 1979. Andalusia followed on 28 February 1980,
and Galicia on 21 December 1980. Under Article 151 of the constitution, the referendum
must be approved by an absolute majority of the electorate in each province of the region
which wishes to set up an autonomous community.
34
This form of referendum has not yet been used for reforming statutes of autonomy. See the
2002 report on La democracia directa en España, p.11, www.demopunk.net.
35
On this subject, see Ruíz Rico Ruíz, G. (2003), 75-103.
397
1996 and Andalusia in 2001), and very few municipalities have adopted their own
regulations for instruments of direct democracy. One of the few to have done so is the
municipal council of Mieres (Asturias), which in June 2001 adopted a regulation
establishing a consultative referendum and laying down the relevant implementing
arrangements36.
There is a strong sense of regional identity in Spain. People generally feel a strong
attachment to their community of origin, and this attachment goes hand in hand with
general satisfaction about the operation of the autonomic state. This is borne out by a
large-scale opinion poll on national and autonomous institutions, conducted in
September 2002 by the Sociological Research Centre (CIS), the most prestigious of
Spain's official polling bodies, which revealed broad satisfaction with the situation.
Of those questioned, 51.3% were completely satisfied with the operation of the
autonomic state, while 25% would prefer a state system which gave more powers to
the autonomous governments and 5% favoured full autonomy37. At the same time,
57% of respondents said that they felt equally attached to Spain and to their
autonomous community, while just 13% identified more with their community.
The feeling of belonging to a community, a nation or a region is thus of essentially

ideological significance and may correspond with a variety of political choices or
find expression in a variety of political parties. In practice, however, it can only
produce politically important effects if it is reflected in a system of political parties
36
See the 2002 report on La democracia directa en España, p.11, www.demopunk.net.
37
These figures are taken from a survey conducted in September 2002, and are published in
study 2455 on Instituciones y autonomias, published in Bulletin 31 of the Sociological
Research Centre (CIS), January-April 2003. The findings can be consulted on the CIS's
website: www.cis.es.
398
which are able to translate its main tenets into institutional practice. In any event, the
parties do not necessarily reflect the views of their voters when they adopt key
political decisions38; these decisions are often the result of medium- or long-term
strategies and do not reflect the degree of nationalist feeling present in the
autonomous community. Accordingly, the nationalist stances found within Spain are
not always faithfully reflected in the political activity of the parties which represent
them at institutional level. This explains the existence of very disparate political
situations: for instance, some autonomous communities with a strong sense of
regional identity (Andalusia, Galicia, etc.) aspire to increase their level of autonomy
while fully respecting the principles of allegiance to the constitution and autonomous
co-responsibility, while others use this identity as a platform for more ambitious
demands for autonomy that sometimes stretch the constitution to the very limit. A
case in point is the Basque Country, whose nationalist coalition government approved
a draft reform of the statute on autonomy on 25 October 2003 claiming the right to
self-determination for the Basque people and hence the establishment of an
autonomous state freely associating with Spain39.
38
On this subject, see Aja, E. (2003), 189, who considers that grassroots regionalist and
nationalist sentiment is not truly reflected in the actions of the political parties tied to them.
39
This is the gist of the new draft tabled by the Basque parliament on 25 October 2003, based
on the founding tenets of radical Basque nationalism: the irridentist claim to Navarre,
exercise of the right to self-determination, and unconditional sovereignty for the historic
Basque community. For an analysis of this document, see the official website of the Basque
parliament: www.Parlamento.euskadi.net/actividaddelparlamentovascoBoletinOficial.
399
The 1978 Spanish constitution contains detailed provisions on economic regulation,

including the principles governing socio-economic life, economic rights and
freedoms, and the rules governing state intervention in the economy. As well as
according wide recognition to economic rights and freedoms, the constitution has a
separate title on economic regulation (Title VII – Economy and finance), which
contains rules on state intervention in the economy, regulatory instruments for the
planning of general economic activity, and rules on public assets and on taxation and
the budget40. Taken together, these provisions illustrate the twin "economicist" and
"social" strands of the Spanish constitution41. The constitution clearly envisages a
mixed economic system that may be termed a market economy, offering plenty of
freedom for private initiative while giving the state ample scope for influencing the
structure and operation of market dynamics. The constitutional provisions
recognising and guaranteeing economic rights that are essential for the operation of a
market economy (e.g. Article 33 on private property rights and Article 38 on freedom
of enterprise) are flanked by other provisions which give the state wide scope for
pursuing social objectives. Many provisions stipulate that state intervention in the
economy must be in the general interest. For instance: Article 40 requires the public
authorities to promote economic and social progress and a more equitable distribution
of wealth; Article 128 recognises public initiative in economic activity and states that
essential resources or services may be restricted by law to the public sector and that
intervention in companies may be decided upon when the public interest so demands;
40
For an analysis of the economic parameters and models contained in the 1978 Spanish
constitution, see Cassetti, L. (2002), 163-169.
41
Ruíz Rico, G. (1994), 96-97
400
Article 131 enables the state to plan economic activity in order to meet collective
needs. There are thus numerous references to the social dimension of the economic
constitution, perhaps expressed most forcefully in Articles 128 and 131 in general
clauses widely sanctioning public intervention in the economy as a way of ensuring
social justice.
As regards territorial decentralisation, it should first be noted that the highly

decentralised nature of the Spanish state does not impinge on the principle of market
unity, which derives from the application of the principle of political unity (Article 2)
to the system for distributing economic competences between the state and the
autonomous communities (Articles 148 and 149). The unity of the national economic
system is a sine qua non for ensuring that the distribution of economic competences
does not hamper the achievement of balanced, even economic development at
regional level42. This is underscored by Article 138 whereby "the state guarantees the
effective implementation of the principle of solidarity, safeguarding the establishment
of a just and adequate economic balance between the different areas of Spanish
territory". This is an important economic provision which enables the state to
intervene in economic matters of regional competence in order to ensure a similar
level of socio-economic development throughout the country. This provision,
together with those mentioned above, confirms that, in a market economy, public
intervention is only acceptable when it is in the general interest. The general interest
thus becomes a yardstick for assessing economic measures adopted by the state, and
for justifying public intervention.
Title VII of the constitution also contains detailed financial provisions concerning
taxation, the budget and credit operations. As regards financial relations between the
various tiers of government, Title VII sets out the general principles governing the
42
On the distribution of economic competences between the state and the autonomous
communities, see Malaret, E. (1997), 4045-4079.
401
fiscal autonomy of territorial authorities, to be interpreted and applied in conformity
with the relevant provisions of Title VIII. These latter provisions do not establish a
full-scale territorial financing system43, but provide a general framework which the
legislative bodies have wide discretion to flesh out. The constitution outlines the
basic principles of the system, recognising the financial autonomy of the autonomous
communities (Article 156(1)), self-government for the management of the respective
interests of municipalities, provinces and autonomous communities (Article 137) and
the provision of sufficient funds for them to perform the tasks assigned to them
(Article 142). Although the principle of regional financial autonomy provides an
important guarantee of self-government for the autonomous communities, it remains
subject to the principle of coordination and solidarity. Article 156 stipulates that the
autonomous communities are to enjoy financial autonomy for the development and
exercise of their powers, in conformity with the principles of coordination with the
state treasury and solidarity amongst all Spaniards. The requirement for coordination
with state resources implies that the autonomous communities' financial activity must
comply with general economic policy objectives guaranteeing stability and economic
balance44. The principle of solidarity, recognised in Articles 2 and 138 of the
constitution, explicitly prevents the autonomous communities, when exercising their
powers, from adopting any provisions or decisions which run counter to the general
interest and fail to take account of the community of interests which binds them.
Similarly, the principles of local self-government and financial self-sufficiency,
which are an important guarantee of the autonomy of local authorities, are subject to
the same conditions as regional financial autonomy, as well as requiring prior
implementation of the local decentralisation process.
43
There are many studies of the autonomous community financing system and its
development. The most recent include those by Martínez-Pujalte Lopez, V. (2000); Sanchez
Sanchez A. (2001); Lago Montero J. M (2000); Garcia Morillo, J., Pérez Tremps, P. and
Zornoza Pérez, J. (1998).
44
Constitutional court ruling 1986, 11
402
Alongside the restrictions deriving from these provisions, the constitution places
other conditions on the financial autonomy of subnational authorities, for example by
limiting their capacity to levy taxes. Although Article 133(2) expressly recognises
such a right by stating that the autonomous communities and local authorities may
establish and levy taxes, it adds that this must be "in accordance with the law". This
provision is further restricted by Article 133(1), which states that the primary power
to raise taxes is vested exclusively in the state by law. It is thus clear that, although
the constitution recognises local and regional tax-raising powers, the task of deciding
subnational authorities' level of autonomy in the matter rests with the state. Indeed,
Article 157(3) stipulates that the exercise of the financial powers of the autonomous
communities, as enumerated in Article 157(1), may be regulated by an organic law.
The financial powers of local authorities are also to be determined by national
legislation, under Article 142 which expressly defines their sources of financing.
As well as regulating financial autonomy and the limits thereof, the constitution
establishes two mechanisms for interregional solidarity, with the aim of remedying
regional economic imbalance. Article 158 establishes an interregional compensation
fund for investment expenditure, designed to redress economic imbalances between
regions and implement the principle of solidarity by promoting investment. The
article states that parliament is to distribute the resources of this fund among the
autonomous communities but does not specify the criteria to be used for this. In
addition to this general instrument, the constitution states that the state budget may
include an allocation to the autonomous communities "to guarantee a minimum level
of basic public services throughout Spanish territory".
Lastly, the constitution contains an additional provision recognising the historic rights
of the territories with 'fueros' (historic charters). This states that "the general updating
of the fuero system shall be carried out, when appropriate, within the framework of
403
the constitution and the statutes of autonomy". The territories with fueros are the
provinces of Guipuzcoa, Vizcaya and Alava, which make up the autonomous
community of the Basque Country, and the province of Navarre, which currently
forms an autonomous community termed a 'comunidad foral'. The additional
provision underpins the special financing system of these two autonomous
communities, which differs from the general system covering the other 15
autonomous communities.
The general financing system for these 15 autonomous communities is governed by

Organic Law 8/1980 on the financing of the autonomous communities (LOFCA),
which was fully transposed into the statutes of autonomy. A similar finance and tax
system thus applies to all 15 autonomous communities. However, this broad
uniformity left some questions unresolved, with the result that, during the first 20
years of the autonomic state, it did not prove possible to establish a stable financing
system. Although the LOFCA envisaged a transitional system which would apply for
the first six years after the adoption of the statutes of autonomy and which would be
replaced by a definitive system thereafter, the relevant provisions never actually
entered into force. When the six-year period ended, negotiations were opened
between central government and the autonomous communities, conducted via the
main financial coordination body, the fiscal and financial policy council (CPFF).
These negotiations led to the adoption of a financial agreement for the period 1986-
1991. Five-year agreements then became the legislative norm, and continued to be
concluded until the adoption of the new financing system45. On 27 July 2001 the
CPFF adopted a reform of the financing system which ended these ongoing five-
yearly political negotiations and instead introduced an automatic mechanism
providing a more stable system. The regions thus now have greater autonomy to
manage those public services (such as health) which have already been transferred to
45
For an analysis of the three financial agreements adopted for the periods 1986-1991, 1992-
1996 and 1997-2001, see Rodríguez Álvarez, J.L. and González Alonso A. (1999), 221-227.
404
them or are likely to be in the future46. The agreement was implemented by Law
21/2001 of 27 December 2001 laying down fiscal and administrative measures for the
new system for the financing of the autonomous communities covered by the
common system and the cities with statutes of autonomy (LSFCA). This law provides
for the introduction of automatic updating mechanisms and extends the application of
the existing finance and tax system to the public sector in its entirety47.
In the Basque Country and Navarre, the updating of the historic rights mentioned in
the additional provision was enshrined in the statute of the Basque Country and in
Organic Law 13/1982 on the reintegration and enhancement of the fuero of Navarre
(LORAFNA). The Basque statute states that financial relations with the state are
regulated by the traditional fuero system of economic covenants and agreements
(Article 41(1)), while the LORAFNA states that Navarre's fiscal and economic
powers are regulated by the traditional system of economic agreements (Article
45(1))48. These stipulations were put into effect by Laws 12/1981 and 28/1990
respectively regulating the financing system for the economic covenant of the Basque
Country and the economic agreement of Navarre. The special financing systems
46
There is provision for three different forms of financing: one for services of shared
competence, one for health care and one for social services.
47
For an analysis of the new financing system, see the legislative text published in the Spanish
official journal (BOE) of 31 December 2001 and available on the following website:
www.noticias.juridicas.com.
48
The terms "economic covenant" and "economic agreement" refer to the traditional financing
systems of the autonomous communities of the Basque Country and Navarre which,
although they have been radically altered, still form part of the Spanish legal system.
Historically, these systems were the result of a broad compromise between the state and the
governments of the two communities, whereby the state gave these communities important
tax privileges on condition that they returned a certain proportion of the revenue to the state.
Over the last 20 years, these systems have been regularly updated in order to adapt them to
the general financing system. Today, the Navarre agreement and the Basque covenant set
out the rules governing financial relations between central government and the two
communities.
405
which they established are not set in stone: they have been regularly updated and
amended. The Basque economic covenant was recently reformed under Law 12/2002,
which introduced a more stable fiscal and financial system for the autonomous
community. The Navarre economic agreement has been amended several times in
order to update and adjust the financial powers of this autonomous community to the
new needs of autonomy policy.
The legislative framework for the local government financing system has been built
more slowly than the regional system. The broad outline was introduced by
Law 7/1985 establishing the foundations of the local system (LBRL). Given the
practical impossibility of establishing a permanent system, this law simply laid down
basic rules for the financing of the new local government system. A full-scale
financing system was only established three years later with Law 39/1988 of
28 December 1988 regulating local finances; this implemented the principles of
autonomy and financial self-sufficiency enshrined in the constitution and recognised
in Title VII of the LBRL. This law definitively removed local authorities from the
financial tutelage of central government and gave local government bodies the
possibility of playing an effective part in establishing and managing their financial
resources. However, the ensuing finance system did not prove able to adapt to
emerging demands for greater local financial autonomy. In order to address these, on
11 July 2001 a committee comprising representatives of the Spanish Federation of
Municipalities and Provinces (FEMP) and of central and local government was set up
with a remit to draft a proposal for reforming local finances. Their proposal was
adopted, virtually unamended, as Law 51/2002 on the reform of local finances, which
introduces a more stable financing system and gives local authorities greater
autonomy and more shared financial responsibility.
406
The adoption of the constitution in 1978 spurred rapid changes in the Spanish
economy which, over a thirty-year period, has shed its relative backwardness and
emerged as a leading player that is fully integrated in the international economy. This
transformation is faithfully reflected in the degree to which the economy has opened
up to foreign trade49 and in the dwindling role of agriculture within the production
system. With the development of its industrial and service sectors, Spain has ceased
to be a predominantly agricultural country: the service sector is now the cornerstone
of the Spanish economy50. At the same time, Spain has become a full member of the
international economic system. The first timid move in this direction was the 1959
stabilisation plan, continuing after 1970 with the signature of a preferential agreement
with the EEC and culminating in 1986 with the country's accession to the European
Union. Since then, the main aim of Spain's economic policy has been real
convergence with its European partners, particularly as regards per capita income and
employment. This aim was amply achieved in the second half of the 1990s in a
context of radical economic change, influenced by the effects of European integration
and the liberalisation and privatisation policy that was de facto imposed by the EU in
tandem with the setting-up of the single currency and the related requirement for
macroeconomic convergence. After a brief period of recession in the early 1990s, the
Spanish economy saw a further upturn.
49
As regards foreign trade, the Spanish economy is one of the most open in the western world.
In 1990, imports and exports (goods and services) accounted for 33% of Spanish GDP; by
2002 the figure had risen to 63.5%. See the 2002 report drawn up by the Italian Foreign
Trade Institute (ICE), available on the ICE website: www.ice.it.
50
The service sector accounts for 64% of productive activity, while manufacturing industry
accounts for 36%, with the figure for agriculture and fisheries falling to just 4%. These
figures are taken from the ICE's 2002 report on the Spanish economic situation, which can
be found on the ICE website: www.ice.it.
407
The Spanish government's economic policy since 1996 has had three main strands:
firstly, economic planning based on reducing the deficit through rigorous control of
public spending, keeping a curb on inflation and cutting interest rates, made possible
by the credibility of the government's budget policy; secondly, an ambitious
liberalisation and privatisation programme for public undertakings, with the primary
aim of making the economy more competitive and the private sector more dynamic;
and thirdly, a more effective labour market, to be achieved through social dialogue,
reducing labour costs, providing more stable employment and developing new paths
to employment (on this point, see chapter 3.4 below).
The economic liberalisation and privatisation process has thus been conducted during
a period of strong economic growth, with the aim of increasing competition and
making the business system more efficient. Spain has not adopted any general
legislation on privatisation, preferring specific legislation for each sector. Some
general guidelines are contained in Law 5/1995 on legal arrangements for the
disposal of public shareholdings, although this only concerns privatised undertakings
pursuing general interest activities, for which the law introduced prior controls based
on the issue of administrative authorisations51. The state thus retains a form of control
of privatisation operations when they involve companies in which the state
shareholding acts as a guarantee of a precise public interest52. Against this backdrop,
51
An administrative reform took effect with Law 6/1997 of 14 April 1997 on the organisation
and operation of the general state administration. This law rationalised and simplified the
regulations governing the institutional administration of the state. It distinguished two
separate categories of public body: firstly, autonomous bodies which supply or manage
public services and which are regulated by public law; and secondly, public enterprises
which supply and manage services and produce goods of public interest that have an
economic value. These public enterprises are generally governed by private law, and are
only governed by public law if they are granted administrative powers. See Nico, A.M.
(2000), p.1311.
52
More specifically, if the state holding is more than 25% and the privatisation concerns more
than 5% of the company's capital.
408
the privatisation process opened in 1996 when the government approved an ambitious
privatisation programme laying down principles and guidelines for modernising state
undertakings53. The programme stipulates that basic privatisation powers lie with the
government and the agencies overseeing the privatisation process (SEPI, SEPPA and
AIE – agencies put in charge of state-controlled industrial and other holdings). These
agencies are responsible for drawing up the detailed privatisation proposals, in
accordance with the agreement and with the government's guidelines. The advisory
committee on privatisation then issues an opinion on the proposals. The proposal and
the opinion are then forwarded to the deputy prime minister and the economics and
finance ministers, who assess them and pass them on to the Council of Ministers for
final approval. Following this procedure, the privatisation of public undertakings has
adopted two separate paths: direct sale to other companies or private groups,
generally in the same production sector, and indirect disposal via the public sale of
shares in the company54. The first path has been used for the sale of lossmaking
companies, and of subsidiaries of some public enterprise groups of lesser importance.
With a view to rationalising the business system, small and medium sized enterprises
have been sold, and those with no real economic development prospects have been
wound up. Indirect sale has been used in the case of large companies occupying a
strong position on the national market and offering the prospect of good profits. This
has been the path followed for large companies in the electronics,
telecommunications and energy sectors, considerably reducing the state's role in
Spanish industry.
53
The principles cited in the document are: a) publicity, transparency and competition; b)
economic efficiency; c) the need to separate ownership from management; d) all operations
to be subject to controls; e) protection of general economic interests and of state assets; f)
protection of shareholders' interests; g) continuity of the business plan of privatised
undertakings; h) improvement in competence; I) extension of the capital market and of the
companies' share base. For an analysis, see Pampillon (1997), 25-34.
54
As regards the practical arrangements for the privatisation process in Spain, see Nico, A.M.
(2000), 1281-1311 and Troncoso Reigada, A. (2000).
409
The large-scale privatisations of the years 1997-2001 brought leading companies in
key production sectors onto the stock market and provided a significant amount of
revenue for the state. From 1996 to 1998, privatisation revenue accounted for 2.7% of
GDP. In 1997 alone it yielded ESP 2,050 million, the equivalent of 77% of the
previous year's deficit. After a brief pause in 2001, more privatisations were launched
with the sale of six public companies and seven agricultural undertakings belonging
to Expasa, yielding EUR 835 million that year.
These figures show that the privatisations undertaken in the last ten years have played
an important role in Spain's economic recovery; in the five years from 1996 to 2000
the country's growth was above the EU average. Privatisations have done much to
help reduce the government deficit, bringing it below 3% of GDP and thus enabling
Spain to meet the Maastricht stability criteria and become a founding member of the
economic and monetary union. Although Spain has been feeling the effects of the
world economic slowdown, its growth rates remain above the developed country
average. Its per capita GDP currently stands at around 80% of the EU average.
Funding for the autonomous communities comes from three main sources: own
resources, ceded taxes and transfers. The own resources come from local taxes and
from revenue from credit operations and assets. Local taxes account for only a small
part of local revenue because, although they can be levied on physical objects already
taxed by the state, they must not create double taxation55. The same is true of
additional levies on state taxes; following the 1997 reform, this concerns all taxes that
55
Constitutional court rulings 37/1987 and 186/1993
410
can be ceded. Whilst these could potentially generate a considerable amount of
revenue, the autonomous communities have made little use of them because they fear
the political consequences of increasing tax pressure. Consequently, the only
additional levies so far are those which eight autonomous communities have
introduced on gaming56. Revenue from credit operations and assets provides an
important source of income for the autonomous communities. Such revenue is
derived from the sale of assets and from the communities' stake in commercial
enterprises, and from the raising of loans. The autonomous communities have made
widespread use of credit operations, even though these are restricted by the LOFCA
(Article 14). This places a number of conditions on the nature and duration of loans
and considerably limits public and foreign loans, which require prior state
authorisation.
A considerable proportion of autonomous community funding come from taxes ceded

by the state; since the entry into force of the 1997 reform, these have formed the main
source of finance. Until 1997 this only concerned a small number of taxes, but ceded
taxes are now the cornerstone of the whole financing system. The 1996 and 2002
reforms of the LOFCA introduced two major changes in the ceded tax provisions
which increase their importance: firstly, a proportion of personal income tax, value
added tax (VAT) and most special taxes are ceded, and secondly, the communities
are granted certain regulatory rights concerning the ceded taxes. Personal income tax
is split into two parts, with 70% going to the state and 30% to the autonomous
community in which it is levied. Each autonomous community thus obtains 30% of
the personal income tax raised in its territory. As regards VAT and special taxes, the
ceded portion must not exceed 35% and is calculated on the basis of consumption
56
It should however be noted that the single-province autonomous communities (Asturias,
Cantabria, La Rioja, Madrid and Murcia) have introduced an additional levy on the
municipal tax on economic activities, which was assigned to them under the local finance
act (LOFCA). On this point, see Rodríguez Álvarez, J.L. and González Alonso, A. (1999),
231.
411
within each autonomous community. On the basis of these latter modifications,
Article 11 of the LOFCA stipulates that the following state taxes may be ceded: a) up
to 33% of personal income tax: b) tax on assets; c) tax on the transfer of assets and
registration tax; d) up to 35% of VAT; e) inheritance tax and levies on donations; f)
up to 40% of special manufacturing taxes; g) electricity tax; h) special tax on certain
modes of transport; i) gaming taxes; j) tax on retail sales of certain fuels. The second
change generally increased the autonomous communities' regulatory rights, although
these vary with the tax concerned and must not affect the tax base. The autonomous
communities are entitled to decide the proportion of personal income tax they wish to
levy themselves, while, in the case of consumer tax, regulatory power remains in the
hands of the state.
The third – and for a long time, the main – source of autonomous community funding
is financial transfers. This category includes sums returned to the autonomous
communities by virtue of their contribution to national tax revenue, and transfers
from the interregional compensation fund. The former sums have dwindled
considerably since personal income tax was ceded in 1997, as this source of revenue
is no longer included. Transfers from the interregional compensation fund have
become more important since the adoption of Law 29/1990, which made the fund a
more effective instrument of economic solidarity and coordinated its operation with
that of the EU's Structural Funds (on this subject, see chapter 5 below). The fund has
an annual endowment of 30% of state civil investment, and the monies are distributed
among those autonomous communities whose per capita income is below 75% of the
EU average.
The 2002 legislative reform significantly restructured the system regarding

contributions to national tax revenue and divided it into three main sections: a) a
"sufficiency" fund, calculated on the basis of the difference between the spending
needs of each autonomous community and its tax-raising capacity; b) top-up
412
allocations to those communities that are unable to guarantee the minimum level of
spending considered necessary throughout the country for the provision of health and
education services; and c) the interregional compensation fund to provide long-term
support for structural investment in the less developed regions57. The level of these
transfers is calculated using a number of socio-economic variables that are listed in
the LFSCA and in the law establishing the interregional compensation fund.
The two autonomous communities covered by the special financing system currently
have broader taxation powers than the 15 "general system" autonomous communities.
The former thus have regulatory and executive powers over all taxes except those
deriving from tax monopolies, import duties and import obligations relating to VAT:
these are the exclusive competence of the state. This means that the Basque and
Navarre authorities are responsible for the regulation, management, settlement,
collection, inspection and revision of taxes levied on their territory. They naturally
also receive funding from the sources available to all autonomous communities
(interregional compensation fund, EU funds). However, the tax-raising powers of
these two communities are subject to specific limitations laid down in the laws
enacting the Navarre agreement and the Basque covenant, in the constitution and in
the statutes of autonomy. The first limitation derives from the territoriality principle,
which is used to determine the distribution of taxation powers between the two
communities and the state. In addition, the "special system" communities must
comply with a series of specific obligations laid down in law or deriving implicitly
from the constitution and the statutes of autonomy, such as the obligation to keep the
overall tax burden in line with that of the rest of the country. Lastly, the two
communities must transfer a certain sum each year to the state to finance their share
of those services which they do not provide directly themselves. The exact sum of
these transfers, known as the Cupo in the Basque Country and the Aportación in
57
For an analysis of the new regional contribution system, see Rozas Valdés, J.A. (2003),
609-611.
413
Navarre, is calculated according to a system agreed with central government and
revised every five years58.
The new financing mechanisms have increased the resources available to the
autonomous communities in recent years, but these communities' share of public
spending remains low, particularly when viewed in the light of the competences they
have acquired. It is estimated that in 2003 they will handle 34% of public spending,
while 53% will remain in the hands of the central authorities59.
Local authorities' funding sources can be divided into two groups: own resources and
transfers from the state. The first group includes revenue from local taxes, credit
operations and smaller sums deriving from fines and financial penalties. The local tax
system was radically streamlined by Law 39/1988, which modernised the local tax
structure and endeavoured to make local taxation more effective. This led to the
creation of three main taxes: property tax, a tax on economic activities and motor
vehicle tax. The wider reform also led to the establishment of a tax on building and
construction work, which completed the local tax system, together with the reform of
the value added tax on urban land. The 2002 reform of local finance further
rationalised the local tax system, introducing changes in the way local taxes are
regulated. Law 51/2002 exempts most small and medium sized enterprises (around
2,200) from the tax on economic activities and establishes a financial compensation
mechanism for local authorities. The property tax law redefines the categories
concerned and gives local councils greater autonomy in administering this tax.
The second group of funding sources involves local authorities' share of national tax
revenue. This had always formed a very important part of the local finance system
58
For more details about the financing system of the Basque Country and Navarre, see De La
Hucha Celador, F. (1995).
59
Source: Spanish Ministry of Finance
414
and has remained so since the 2002 reform, as it has to guarantee the principle of
sufficient funding60. The mechanism established under Law 39/1988 for determining
the local share of national tax revenue takes the form of a predetermined percentage
which is index-linked to national tax revenue. It should be noted that the new
legislation due to enter into force on 1 January 2004 will partially amend this system
and give local authorities a larger share of state revenue. The main towns and cities
(provincial capitals and the capitals of the autonomous communities, and towns with
at least 75,000 inhabitants) are to have a dual financial structure determining (i) a
share of those taxes with potentially high revenue that have been partly ceded to the
autonomous communities (e.g. income tax, VAT, special taxes on beer, spirits and
wine) and (ii) a percentage share of a supplementary financing fund which will be
index-based. For other local authorities, the contribution model will take account of
the criteria laid down in the 1988 law and other distribution criteria such as
population and certain socio-economic variables. For provinces, single-province
autonomous communities covered by the general system and the cities with statutes
of autonomy, the contribution system is similar to that for the main cities.
Although this reform considerably extends local authorities' financial powers, the
percentage of public spending managed by them remains very low. It was estimated
that, in 2002, only 13% of public spending would be managed by local authorities.

the unions
One of the most important forms of cooperation between public and private
authorities is enshrined in Article 131(2) of the Spanish constitution, which confers
60
Guarantee of the principle of sufficient funding is one of the main objectives of the reform,
explicitly laid down in the introduction to the new Law 51/2002 reforming Law 39/1988
regulating local finances.
415
on the state the ability to plan economic activity and entitles the socio-economic
players to participate in the planning process. The article specifies that "the
government shall draft planning projects in accordance with the forecasts supplied by
the autonomous communities and the advice and collaboration of trade unions and
other professional, employers' and economic organisations". Provision is thus made
for institutionalised consultations ensuring that socio-economic interest groups play a
part in state economic planning. Article 131(2) is closely tied in with Article 9(2),
which promotes the participation of all citizens in economic life. These articles form
the constitutional basis for official representation of interest groups and the
participation of their representative organisations in the government's socio-economic
decision-making process61. On the basis of these provisions, Law 21/1991 set up the
Economic and Social Council as the most important body representing Spanish
society. The council is not a cooperation body in the strict sense, but provides a
permanent forum for dialogue which, through its advisory activity, enables the
relevant groupings to participate in the framing and implementation of Spain's
economic and social policy. This institutionalisation of social dialogue creates a
culture of cooperation for defending the interests upheld by the socio-economic
organisations, with the emphasis on compromise solutions and the prevention of
disputes.
As well as playing a key role in official cooperation bodies, Spanish trade unions play
an active part in economic life through their participation in collective agreements.
Over the last 20 years, the unions, government and employers' organisations have
negotiated and signed a number of politically important agreements on economic and
social matters. The 1980s saw the development of a centralised macro-consultation
system, based on the signature of largescale agreements but not actually enabling the
social players to participate in the framing and implementation of the government's
61
Montero Pérez (1999), 102-104
416
economic policy objectives (1984 economic and social pact). The partial failure of
this negotiation system downgraded consultations to such an extent that, for some
time, they were not viewed as a necessary part of the regulatory process. The 1990s
saw the development of a sectoral consultation system, focusing on specific
objectives and based on bilateral and trilateral agreements depending on the issue at
stake. In 1996, after the PSOE's electoral defeat, a new stage in social consultations
began, taking the form of negotiated legislation derived from political/legislative
negotiations between the state and the sectors concerned. Examples include
agreements on vocational training, the 1997 Toledo pacts, which paved the way for
social security reforms, and agreements on job stability and part-time work (1998).
The most significant agreements came in 1997 and marked a sea change in Spanish
employment policy with a move from fixed-term contracts to open-ended ones. This
improved job stability and opened up new paths to employment, thereby also
improving the operation of the labour market. The social stability secured by the new
consultation system played an important part in the economic succcess mentioned in
the second paragraph of this chapter. The social consensus between trade unions and
employers as regards collective bargaining and employment conditions significantly
encouraged the convergence process and helped to ensure the stability needed for
economic growth.

Spain's accession to the EU in 1986 played a crucial part in the rapid rise of the
relatively underdeveloped Spanish economy. Twenty years of strong economic
growth have now put Spain among Europe's leading economies. Since 1986, Spain
has benefited significantly from EU financial support for the lagging regions. This
has helped it to reduce the wide socio-economic gap between the different parts of
the country and thus to achieve faster, more geographically balanced growth.
417
The EU's main socio-economic cohesion instrument is its Structural Funds. These
funds are designed to redress the imbalances between Europe's most industrialised
regions and those where development is lagging behind. The main financial
instruments are the following: a) the European Regional Development Fund (ERDF),
which seeks to reduce development imbalances by providing direct investment to
improve infrastructure and promote local development, human resources and
protection of the environment; b) the European Social Fund (ESF), which seeks to
prevent and combat unemployment, develop human resources and facilitate their
integration into the labour market; c) the European Agricultural Guidance and
Guarantee Fund (EAGGF), which promotes rural development and adaptation of
farm structures; d) the Financial Instrument for Fisheries Guidance (FIFG), which
seeks to achieve a sustainable balance between fisheries resources and their
exploitation; e) the Cohesion Fund, which was set up specifically to promote the
economic development of the four Member States with a GDP below 90% of the EU
average, namely Greece, Ireland, Spain and Portugal. Financing from the Cohesion
Fund is only available for individual infrastructure projects regarding trans-European
transport networks and the environment. The Structural Funds have focused on three
objectives: a) assistance for lagging regions whose per capita GDP is less than 75%
of the EU average; b) socio-economic conversion of areas facing structural problems;
c) adaptation and modernisation of education and training systems.
In Spain, the Structural Funds have provided an important source of finance for the
autonomous communities. Many Spanish regions have benefited from Objective 1
funding, i.e. ERDF support for regions whose per capita GDP is less than 75% of the
EU average. This funding, together with money from the interregional compensation
fund, has considerably aided the economic recovery and structural conversion of such
regions as Extremadura and Asturias, which were formerly far less economically
advanced than Catalonia or the Basque Country, for example. The amount of funding
418
received varies from region to region, but on average accounts for 7% of autonomous
community revenue. All regions of Spain are also entitled to financing from the
Cohesion Fund for projects designed to improve communications or environmental
infrastructure.
For the 2000-2006 programming period, the EU has allocated Spain a total of
EUR 43,087 million. In addition to the cities of Ceuta and Melilla, the following
regions are eligible for this funding: Galicia, Asturias, Castilla-Léon, Castilla-La
Mancha, Extremadura, Valencia, Andalusia, Murcia and the Canary Islands62. Spain
is to receive EUR 26,591 from the ERDF, 87.7% of which will go to Objective 1
regions and the remainder to Objective 2 regions. Financing from this fund will be
used to improve: competitiveness and production facilities (23.9% of the total),
communications infrastructure and energy (23.2%), promotion of human resources
and employment (18.7%), the environment and sustainable development (16.1%),
local and urban development (10.1%), the knowledge-based society (7.9%). Spain
will also receive EUR 11.60 million from the Cohesion Fund. These transfers,
together with those from the state, enabled the country to launch some
EUR 3,300 million of public investment in 2001; EUR 1,850 million of this will be
used for transport projects and the remaining EUR 1,450 will be spent on
environmental schemes. Overall transfers from the Cohesion Fund have led to the
launch of some 281 projects involving over 150 towns and cities and 59 associations
of municipalities.
62
Information on the use of the Structural Funds in the new programming period can be found
in the report on financial relations between Spain and the European Union for 2003, drawn
up by the Ministry of Finance. See the Ministry's official website: www.minhac.es.
419
Table 3.1 Transfer of Structural Funds for the period 2000-2003
STRUCTURAL FUND 2000 2001 2002 2003
ERDF 2,818.88 3,380.61 3,667.14 3,919.02
ESF 796.58 1,084.75 2,331.45 2,066.09
EAGGF, FIFG and other 516.65 630.24 980.00 1,446.00
Cohesion Fund 1,197.08 865.50 1,607.00 1,585.10
Total 5,329.19 5,506.59 8,585.59 9,016.21
Source: Ministry of Finance

OF PUBLIC SERVICES

of public services
As well as enshrining many social rights, Chapter III of the Spanish constitution
guarantees a public social security system for all citizens, with adequate social
assistance and benefits for those in need, especially in cases of unemployment
(Article 41). As a result, Spain has set up a comprehensive social security system
which can be defined as "solidarity-based", offering universal coverage and a
sufficient level of benefits, open to all, with cover not dependent on contributions
(Law 26/1990 on non-contributory benefits)63. In the last twenty years, the social
security system has pursued three broad aims: to guarantee the free, equal and open
development of individual and collective rights; to offer sufficient resources to cover
63
Until 1990 the social security system only covered certain categories of employment. Law
26/1990 introduced non-contributory benefits and was thus an important step in securing
universal social security cover. See Rodríguez Ramos, M.J., Gorelli Hernández, J. and
Vilches Porras, M. (2002), 150 et seq.
420
all social needs, inter alia through the payment of differentiated benefits; and to
eliminate the causes of social exclusion. Social services are run by special national
bodies and joint services such as the national social security institute, national health
institute and national employment institute, whose task is to deliver the necessary
benefits and services (social, health, economic) to the public. It should be noted that
following the transfer of health matters to the autonomous communities, most of the
duties of the national health institute are now carried out by the regional health
services. The social security system also provides a series of specially tailored
benefits and support for groups with particular needs (e.g. families, women, young
people, certain categories of worker, people with physical or mental disabilities). For
each category, government bodies approve a specific programme of measures and
objectives, to ensure that the requisite services are available; these may be run by
public national and local bodies or by private bodies that fulfil the technical and
organisational conditions laid down in the relevant legislation. For the new
programming period, the government has approved integrated programmes for family
support (2001-2004)64, young people (2001-2003) and social integration (2001-
2005)65. Each programme sets out objectives and strategies to guide the future work
of the public authorities.
The social security system is not the only source of social services. Assistance is also
available under the welfare system, which is quite separate and is run by the
64
The family support programme has four objectives: to improve the quality of family life; to
promote solidarity between generations; to support the family as a guarantor of social
cohesion; and to support families facing particular problems. For more details about this
programme, see the website of the Ministry of Labour and Social Affairs:
www.mtas.es/dgas/Familia/PlanIntFam/htm.
65
For an analysis of this programme, see the website of the Ministry of Labour and Social
Affairs: www.mtas.es/dgas/InclusSoci/IIPlan.
421
autonomous communities66. The welfare system caters for specific needs which are
not covered by social security; this form of support is defined in the autonomous
community legislation as a "form of generic protection for persons in a state of need,
granted within the economic limits of the body providing it". Over the last twenty
years, the autonomous communities have drawn up an extensive corpus of legislation
on social services, providing a comprehensive public system. They have taken
exclusive responsibility for welfare support and have built up egalitarian systems
promoting mutual support and free, full development for all67. To this end, the
autonomous communities concentrated first on the planning of social, health,
educational and cultural services, and secondly on coordination with the provincial
and local authorities to improve service delivery. Among the benefits widely
available in the autonomous communities, special mention should be made of the
"social wage" provided under the legislation of all communities. This is a public
service designed to facilitate the social reintegration of those who lack the economic
resources to meet their basic needs. Recipients must be over 25 years old and under
the legal retirement age, and must have been resident in the community for a
specified period. They are also required to provide proof of their deprived
circumstances. Payment of the social wage is then conditional on participation in
activities to promote social and vocational reintegration. Some communities also
provide special aid for particularly urgent cases and for wider community
development programmes; in no cases, however, may these schemes offer more than
the legal minimum wage68. The autonomous communities also provide special
services for families, minors, young people and the elderly, people with disabilities,
and other groups. Autonomous community legislation has shown particular concern
for the situation of abandoned minors, and the autonomous authorities have been
66
The distinction between social security and welfare was addressed by supreme court ruling
146/1986. On this point, see also García Núñez Serrano (2002), 131-133.
67
Perze Sola, N. (2003), 148
68
See Galicia autonomous community Law 9/1991 on basic social integration measures.
422
assigned a number of competences regarding their care. These include responsibility
for ascertaining abandoned status, issuing a reasoned declaration to that effect and an
authorisation for taking the minor into care, and looking after him or her if legally so
required. In practice, responsibility for minors always rests with the person acting in
loco parentis, but in exceptional cases the autonomous authority has to step in. To
complete the range of services available for minors, it should be noted that the
autonomous and local authorities are also responsible for ensuring that they have
access to healthcare, education and cultural services, providing special forms of
assistance via specialist bodies and schools. For young people in general, the
autonomous institutions have adopted a direct support framework with the setting-up
of youth councils. These are public bodies which seek to encourage young people to
contribute to the political, social, economic, cultural and sporting life of their local
community. Lastly, for older people, a number of special services have been set up:
day centres, subsidised meals, domestic help services and sheltered housing. Other
services include free transport, social tourism, special healthcare and any other
services designed to improve quality of life. Senior citizens' councils, which are
public bodies legally entitled to represent their members, are active in this field.
The autonomous communities have developed their own welfare systems, and the
services are run in close cooperation with the local authorities. Article 25(1) of the
Local Government Act (Law 7/1985 of 2 April 1985) stipulates that, to take care of
their interests and in the context of their competences, the municipalities may
promote activities and provide services that help to meet the needs and aspirations of
the community. Article 25(2) goes on to state that the municipalities, in accordance
with national and autonomous community legislation, are to exercise competences
regarding the provision of social services and the furtherance of social integration.
Article 26(1)(C) gives municipalities with over 20,000 inhabitants the obligation to
provide social services. The main instrument for boosting cooperation between
autonomous communities and local authorities in the delivery of social services is the
423
joint programme for local corporation provision of basic social services. Under this
programme, national and regional authorities undertake to fund social welfare
schemes which are then run by the local authorities. This covers all basic social
services, which are run from specialist social service centres equipped with the
requisite technical facilities and specialist staff. The centres provide the following
basic services: information, advice and support, domestic help, and assistance with
social integration. Thus, as regards the running of social services, the autonomous
and local authorities provide services either directly or via specialist autonomous
agencies. The latter are public bodies with their own legal personality and assets,
governed by Law 6/1997 of 14 April 1997 on the organisation and operation of the
general state administration.
It should also be pointed out that the benefits provided under the state social security
system may be supplemented by subscribing to private insurance schemes, which
exist freely alongside the state system.
The large-scale privatisations of the years 1997-2001 brought leading companies in

key production sectors onto the stock market (electronics, telecommunications, postal
services, electricity, the coal industry) and transferred the management of many
utilities either directly or indirectly to private operators. At regional and local level
too, privatisation encouraged closer cooperation between the authorities and the
private sector for the running of those public services which do not involve the
exertion of authority69. One of the main avenues for privatising the running of these
69
The public services which can be managed indirectly, through cooperation with the private
sector, are those which do not involve such expressions of authority as the power to dictate
legal provisions, the use of force, a policing role or the guarantee of public wellbeing. On
this point see Cerrina Feroni, G. (2002), 110-112.
424
services has been the setting-up of public-private joint stock companies. This can be
done in one of two ways: either the regional authorities acquire a stake in existing
companies so as to gain share capital, or new companies are set up with private
capital, through share issues. As a rule, the operation of these companies comes under
private law, which is why this form of organisation is chosen. The Spanish supreme
court (ruling of 24 March 1987) has defined joint companies with local involvement
as bodies entirely regulated by commercial law, with a separate legal personality
which is distinct from that of their partners. Local authorities have exactly the same
status in these companies as the other partners and cannot use their public nature to
arrogate more powers than those explicitly laid down in the statutes and in
commercial law.
In addition to the formation of companies, a number of other forms of cooperation

between the public and private sectors have been widely used for the running of
public services. These involve such formulas as contracting out, "interest-related
management" and leasing, all offering more flexible forms of public-private sector
relations. Contracting out means that the local authorities hand over the management
of a public service to a private party or body, through a contract in which the latter
takes over the economic risk of the activity. Interest-related management refers to a
special form of public-private management of a public service, whereby the company
and the authority share in the exploitation of a service according to a breakdown
specified in the contract. The company has a guarantee of cooperation from the
authority and a fixed income enabling it to fully recoup its initial investment costs. In
addition, if the profits exceed the guaranteed minimum, the company can receive a
share of them, on condition that it uses them to develop its public service provision70.
Leasing is a contract offering an entrepreneur the use of municipal facilities to
provide a service. It may therefore cover services whose facilities have been
70
For a detailed explanation of interest-related management, see Cerrina Feroni, G. (2001),
825.
425
established by the local authority or are owned by it. The spread of such schemes has
led to greater private sector involvement in the running of public services and
extended the application of private law in this area.
The exercise of these economic activities must fully comply with competition rules.
Spain's competition law (Law 16/1989 on the protection of competition and
Law 3/1991 on unfair competition) forbids unfair economic practices that would
distort competition, and lays down mechanisms for controlling economic
concentrations that have implications for the national market and could therefore be
against the public interest. Two administrative bodies are responsible for upholding
competition rules: the competition tribunal and the competition office.


and results)
Spain's public authorities have greatly increased their level of computerisation in

recent years. The number of computer workstations (fixed terminals with keyboard
and screen) is now 322,578, with 37.4% of these installed at the Ministries of
Finance, Labour and Social Affairs, and Justice. The greatest number is found in the
Ministry of Labour and Social Affairs. On average, the state authorities have around
63 workstations for every 100 employees. In 2001, they spent EUR 746,763,000 on
the purchase of computer goods and services, representing around 2% of the state's
ICT budget allocations71.
71
Report on Spain by the international observatory on information technology in public
administration, pp. 17-18.
426
The main instrument for computerising the public authorities is the "administrative
intranet" (IA) scheme, which aims to create basic communications infrastructure and
telematic services and to facilitate the integration of existing IT systems. The network
should link up all the state authorities, the autonomous communities and the
European Union. The first steps in the scheme were made in 1998, and the launch
was preceded by various other projects: the ISTMO message service (organisational
support system for message processing), the "one-stop" portal, electronic contracting
and tendering project and the interministerial communications network, which
formed the initial core of the IA. The IA is based on a high capacity network
guaranteeing data reliability and encryption in all transmissions. All ministries and
directorates can connect directly with the main IA network through its connector
areas, or can have their own territorial network. There are also plans for a remote
access centre to link the authorities of the autonomous communities, local authorities
and the European Union. Lastly, the IA is to provide a joint service centre to oversee
the communications network and run centralised services (central DNS, e-mail,
central directorate). The aims of the IA scheme are to rationalise the use of
communication networks; increase the interoperability of the communications
infrastructure, services and information systems of central government and of its
local offices; guarantee infrastructure and service security; facilitate the
implementation of sectoral and horizontal applications; and prevent technological
obsolescence.

In Spain, the technical and legislative framework for devising and piloting new forms
of "e-democracy" has changed considerably in recent years. The first parliamentary
committee on the Internet and new information technologies, proposed by PP senator
427
Esteban González Pons, was set up in 1998. Four years later, on 11 July 2002, the
Spanish parliament adopted Law 34/2002 (published in official journal 166 of 12 July
2002) on information society services and e-commerce. No major new legislation
was introduced in the intervening four years, apart from a few initiatives on related
matters such as electronic signatures. However, the application of new technologies
to political and institutional life has led to important changes which open up new
opportunities for increasing democracy. The Info XXI project presented by Prime
Minister José Maria Aznar in January 2000 with the aim of extending the information
society throughout the population has not yet been fully implemented but has still had
a significant impact. There have been major steps to increase the computerisation of
the public authorities: installation of the first version of the Public Administration
Ministry's "citizens' portal"72; the launch of an ERDF operational programme on the
information society73 to promote cooperation between autonomous communities and
local authorities in the implementation of online programmes and projects74;
promotion of new IT instruments in the health and public administration sector; and
the launch of new programmes to create "digital towns and cities".
In this context, there is growing political interest in exploring and applying new
e-democracy tools such as electronic voting, online access to political information
and telematic public discussion forums which give the public the opportunity to play
a direct role in political life.
72
www.administracion.es
73
The project sets up the first pubilc enterprise body: www.red.es.
74
Other important initiatives in this field include the following: the electronic civil register;
the health portal; the possibility of paying taxes directly via Internet using the webpage of
the tax agency; and social security on the web. For a detailed analysis of these instruments,
see a full report on the state of eGovernment at: www.cibersociedad/rediris.es/congreso.
428
The Law governing the electoral system (LOREG) makes no provision for any form
of voting other than the traditional ballot paper and so implicitly excludes electronic
voting. Any variant of electronic voting expressly runs counter to this law.
Nonetheless, some companies have recently proposed electronic voting systems that
would make it possible to computerise voting procedures without necessarily having
to alter the ballot paper. An association formed by the government, the University of
the Basque Country and a group of companies (Ibermatica, Ikusi and Hunolt) has
presented a project entitled Demotek: Technology in support of democracy which
proposes an electronic voting system with the undeniable advantage of retaining the
traditional ballot paper and thus not infringing electoral law, as only the vote-
counting and data-processing procedures are computerised.
The absence of legislation on the matter makes it difficult to predict future

developments. However, it should be noted that some forms of direct democracy
have already been piloted at local and regional level, with the use of electronic
procedures to evaluate the potential risks and benefits of a country-wide application.
Electronic voting was first piloted in the Catalonia local elections on 19 December
1995, in two electoral wards in Barcelona and in the town of Anglés (Girona), with a
view to comparing the effects in two different types of area. Votes were cast in
specially equipped polling stations, using electronic cards with a magnetic strip75.
Two other major pilot schemes have been conducted in Catalonia. The first, which
was launched in 1998, is Democracia.web, una experiencia de democracia
electrónica en Cataluña76, a telematic public discussion forum in which members of
the public can hold discussions in real time with their political representatives on
topics being debated in parliament. The forum thus helps them keep up to date with
parliament's legislative activity and gives them a regular discussion link with their
75
For more information about the use of electronic voting in Catalonia, see: Arnaldo
Alcubilla, E. and D'Ambrosio i Gomáriz, A. (1998), 159-169.
76
www.democraciaweb.org
429
representatives. The second project, Consensus77, is a pilot scheme for developing
Internet-based interactive communication between voters and their representatives, so
as to inform and involve people in debates on issues of public interest. A further
electronic voting trial was held in Galicia, in two electoral wards in Santiago de
Compostela, using two different voting systems in order to ascertain which offered
the greatest economic and practical benefits. Finally, the recent reform of electoral
law in the Basque Country opens the way to new developments in this field, as this
autonomous community will now be able to use electronic voting in its coming
autonomous elections.
Lastly, mention should be made of regional projects setting up "digital towns",

designed to speed up the computerisation of smaller population centres. The
Andalusia autonomous community offered the inhabitants of the town of Jun free
Internet access throughout the year 2000, and the local council backed this up with a
computer literacy course. This was followed by the town's first eGovernment
initiative, on 28 May 2000, in which local people helped to prepare the agenda for a
plenary meeting of the council, and were able to participate and speak in the meeting
in a virtual manner. In November 2001, Jun also hosted the first world conference on
teledemocracy, funded by the European Commission. In 1996, the community of
Valencia chose the small town of Villana for a fullscale electronic voting trial, as part
of a wider project designed to boost the computerisation of regional government. The
whole of the town's electorate voted using special electronic facilities with an
electronic card. Electronic voting was voluntary and was conducted in parallel with
traditional voting; it had no legal effect. More recently, the Spanish federation of
municipalities and provinces has launched a new project, in cooperation with the
Ministry of Science and Technology, entitled ImNoTep, designed to ensure that
77
http://terrabit.icnet.es/consensus
430
75 Spanish municipalities with fewer than 5,000 inhabitants have access to the
information society by 200678.
In Spain, the turning point in the strategy for developing the information society
came with Info XXI: An information society for all, a paper drawn up by the state
secretariat for telecommunications and the information society and adopted by the
government in 1999. In implementation of this paper, on 16 January 2001 the
interministerial committee on the information society and new technologies approved
the Info XXI Action Plan, which sets out a wide range of initiatives for boosting the
development of the information society79. The plan covers the information society
and e-administration, and includes regulatory measures, activities and projects with
specific objectives, timeframes, funding and human resources80. The plan's main
objectives are: a) promotion of the ICT sector, completion of the deregulation process
and promotion of competition; b) introduction and development of eGovernment; c)
improvement of individual and business access to the information society.
These three objectives have been pursued through 300 projects, 21 of which come
under specific ministries. The eGovernment initiatives included in the 2002-2003
Action Plan have a budget of around EUR 13 million81. The main eGovernment
projects are as follows:
78
For an analysis of this project see the website of the Spanish federation of municipalities and
provinces: www.femp.es.
79
A full analysis of these initiatives and of the growth of the information society can be found
in the detailed report on Spain by the international observatory on information technology in
public administration.
80
For an analysis of the Info XXI Action Plan (2001-2003), see website www.infoxxi.es.
81
Report on Spain by the international observatory on information technology in public
administration, page 6.
431
− a public administration portal. This is a "one-stop" portal giving online access to
some 53 public services82. The first version of the portal was launched on
4 September 2001 and had around 1,700,000 "hits" during the first four months;
− an Internet-based system for tax declarations and payments83. Some 500,151
declarations were made in 2001 using the Spanish tax agency's site www.aeat.es,
representing a 43.4% increase on the previous year;
− a business creation information centre and network (CIRCE) to assist with the
setting-up of new businesses. This project is designed to simplify business start-up
procedures84;
− Spanish electronic transaction certification (CERES), for provision of the
technical and administrative services needed to guarantee the security, validity
and efficacity of electronic, informatic and telematic communications from state
authorities and public bodies85;
− electronic identity card, designed to provide basic electronic signature services
relating to the use of the electronic identity card (DNI)86;
− electronic civil register, to computerise and network civil registers. Around 100
registers have been computerised so far, and the establishment of a centralised
database is now under consideration87. Of 305 projects run by the various
ministries, 147 are operational.
82
The portal can be found at: www.administracion.es. The project comes under the remit of
the Public Administration Ministry: www.map.es.
83
This project comes under the Ministry of Finance: www.minhac.es.
84
This project comes under the Department of the Economy: www.mineco.es.
85
Department of the Economy: www.mineco.es.
86
Internal Affairs Ministry: www.mir.es.
87
The project comes under the Ministry of Justice: www.mju.es.
432
Responsibility for framing and applying government IT policy rests with the
information technology council (CSI), comprising the public administration minister,
three vice-chairmen and a representative of each ministry. More particularly, the CSI
carries out studies and draws up recommendations on IT issues88 and sets general
criteria for system and network safety. To this end, it advises parliament on the
drafting of laws in this sector and proposes and disseminates technological
requirements and standards for public systems. Political responsibility for the
management and coordination of the government's eGovernment initiative lies with
the Ministry of Science and Technology and the interministerial committee on the
information society and new technologies, which monitors the progress of the
projects.
88
The CSI issues a two-yearly progress report (Iria) on the computerisation of the public
authorities and monitors the implementation of the Info XXI Action Plan by a) issuing an
annual evaluation report on the implementation of the ministries' main eGovernment
projects; b) issuing reports on developing projects (three-monthly); and c) keeping an
updated database on the progress of the individual ministries' projects. See the CIS website:
www.cis./map.es.
433
BIBLIOGRAPHY
AA.VV. (2001), El futuro del estado autonómico. VII Jornadas de la Asociación

Española de Letrados de Parlamentos, edited by Francesc Pau i Vall, Navarra,
Aranzadi
Aja, E. (1999), El estado autonómico. Federalismo y hechos diferenciales, Madrid,

Alianza
Alonso De Antonio, A.(2001), El bicameralismo español y la reforma del Senado, in

Homenaje a Don Antonio Hernández Gil, edited by Martínez-Calcerrada and Gómez,
L., Madrid, Editorial Centro de Estudios Ramón Areces.
Blanco Valdés, R. (2003), Cinque tesi sul decentramento in Spagna, in Regionalismo,

federalismo, devolution, edited by Gambino S., Milan, Giuffrè
D´Ambrosio i Gomáriz, A. (1998), El voto electrónico: algunas experiencias

recientes, in “Cuadernos de Derecho Público”, No. 4, pp. 159-169
Calonge Velázquez, A. (2000), Pacto Local de 1999. Medidas para el desarollo del
Gobierno Local, Madrid, Tecnos
Cassetti, L. (2002), Stabilità economica e diritti fondamentali, Turin, Giappichelli
Cerrina Feroni, G. (2001), I servizi pubblici locali nell’ordinamento spagnolo, in

“Rivista di Diritto pubblico comparato ed europeo”, No. 2
Chimenti, C. (2000), Noi e gli altri: compendio di diritto costituzionale italiano e di

elementi comparativi, Turin, Giappichelli
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Informe 2002. La democracia directa en España. www.demopunk.net
Garcia Morillo, J., Pérez Tremps, P., Zorzona Pérez, J. (1998), Constitución y
financiación autonomica, Valencia, Tirant Lo Blanch
Gutierrez Vicén, C. (2000), La intervención de las Cortes generales en la celebración

de convenios entre Comunidades autónomas: la aparición de nuevos probemas, in
“Anuario de derecho parlamentario”, No. 9
Huergo Loa, A. (2001), La libertad de impresa y la colaboración preferente de las

administraciones con empresas públicas, in “Revista de Administración pública”,
No.154
Lago Montero, J.M (2000), El Poder Tributario de las Comunidades Autónomas,

Pamplona, Aranzandi
Lopez Aguilar, J.F. (1999), Lo Stato autonomico spagnolo, Padova, Cedam
Malaret, E. (1997), Aplicación de las previsiones constitucionales y estatutarias en

materia económica, in “Estudios en Homenaje a Ruiz Rico”, pp. 4044-4
Martín Granados, I. (2001), Utopías y realidades del gobierno electrónico en

España: mapa descriptivo, Monitoring centre on cybersociety,
www.cibersociedad/rediris.es/congreso
Martínez-Pujalte Lopez, V. (2000), Análisis del sistema de financiación autonómica:

bases para un nuevo modelo, Bancaja
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Muñoz Machado, S. (2000), Las modulaciones de las competencias de las
comunidades autónomas por las regulaciones del mercado y las nuevas tecnologías,
in Revista de Administración Publica, No.153
Navarro Méndez, J. (1999), Partidos políticos y democracia interna, Madrid, Centro

de estudios político y constitucional
Nico, A.M. (2000), Concordanze e dissonanze nei processi di privatizzazione nei

Paesi dell’Unione europea: il caso spagnolo e italiano, in “Riv. it. dir. pubbl. com”,
pp. 1284-1311
Oñate Rubalcaba, P. and Ocaña Lara, F. (2000), Elecciones de 2000 y sistema de

partidos en España: Cuanto cambio electoral?, in Revista de Estudios Políticos,
No. 110, p. 335 et seq.
Pendás García, B. and Martínez Santamaria, P. (2003), El Senado como “Cámara de

representación territorial”. La reforma del Senado, in Curso de derecho público de
las comunidades. Madrid, Montecorvo
Ramón Cólera Leirado, J. (2001), Relaciones institucionales entre el Estado, las

Comunidades Autónomas y la Administración Local, in El futuro del Estado
autonomico. VII Jornadas de la Asociación Española de Letrados de Parlamentos,
edited by Paul i Vall, F., Granada, Aranzandi
Ramón Montero, J. (1996), Vent’anni di elezioni democratiche in Spagna (1977-

1996), in Quaderni dell’osservatorio elettorale, No. 36, p. 84, at
www.regionetoscana.it
Rodio, R.G., (2003), Trattato di diritto amministrativo, volume 34, Padova, Cedam
436
Rodríguez-Arana, J. and García Mexia, P. (2003), Curso de derecho publico de las
comunidades autónomas, Madrid, Montecorvo
Rodríguez Ramos, M.J., Gorelli Hernandez, J., Vilches Porras, M. (2002), Sistema de
Seguridad social, Madrid, Tecnos
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USEFUL LINKS
Spanish parliament www.congreso.es

Spanish government www.lamoncloa.es
Constitutional court www.tribunalconstitucional.es
Supreme court www.poderjudicial/tribunalsupremo
Economic and social councils www.ces.es
Spanish federation of municipalities and provinces www.femp.es
Basque parliament www.Parlamentoeuskadi.net
www.Parlamento.euskadi.net:actividaddelParlamentovascoBoletìnOficial
El País www.elpais.es
Political parties www.sispain.org/spanish/politics/parliame/indexhtml
Sociological research centre www.cis.es
Democracy web www.democraciaweb.org
Consensus www.terrabit.icnet.es/consensus
Monitoring centre on cybersociety www.cibersociedad/rediris.es/congreso
Ministry of Finance www.minhac.es
Department of the Economy www.mineco.es
Ministry of Labour and Social Affairs www.mtas.es
438
Ministry of Public Administration www.map.es
www.dgal.map.es/cgibin/webapb/webdriver?MIval=reel
www.dgal.map.es/cgi.bin/webapb/webdrivermlval=cg
Ministry of the Interior www.mir.es
Citizens' portal www.administraciones.es
Information Technology Council www.csi.map.es
439
440
SWEDEN
INTRODUCTION
Sweden has an ancient constitutional tradition. Some accounts of the decision-making

process date back almost to pre-history, and are evidence of a desire to subject the
wishes of the monarch to some form of popular consultation1. While the authenticity
of some of these accounts is open to question, there is firm documentary evidence of
a written constitutional corpus from the 14th century, when a Landslag (Land Law)
was adopted (and revised in the following century). This was a sort of Royal Statute,
containing provisions on the election of the monarch, his duties to the State, his right
– under certain conditions – to raise taxes, and on the election of Councillors and the
functions of the Council of State. The 16th century saw the adoption of further
documents – on matters of succession in particular – and these consolidated the
monarchy as an institution, against a backdrop of growing conflict between the
original principle of the division of powers and the centralisation of state power,
which tended towards absolutism. Following the death of King Gustav II Adolph, the
need to provide political guidelines for some court regents led to the adoption in 1634
of an Instrument of Government, under the supervision of the eminent statesman
Axel Oxenstierna. This can be generally regarded as an administrative document
which laid the foundations for the power system by incorporating the previous Royal
Statute, yet without superseding it.
The Instrument of Government was also applied later, during other regencies. In 1660
an important provision was added, stipulating that the four "Estates" of Parliament
1
More information on the constitutional history of Sweden can be found on the Riksdag
website, in particular in the Introduction to the current Swedish Constitution, which
comprises several texts: www.riksdagen.se/english/work/fundamental/introduction
441
had to be convened every three years. The Swedish Parliament (Riksdag) now
became, for the first time, a regular organ of the State, and no longer a body that met
only when the King happened to feel it appropriate.
Making the Riksdag part of the institutional framework was an important step, as it
managed to assert itself conclusively. However, for a time it was only able to mitigate
the trend towards absolute autocracy, particularly under Carl XI and Carl XII, who
tried to show that the monarchy was not bound by any Instrument, and could alter it
arbitrarily. It was not until 1720 that the pendulum swung back towards the
constitutional position of Parliament, in line with an anti-absolutist, enlightened
mentality that was rapidly taking hold throughout Sweden. According to an
Accession Charter of 1720, the King agreed to govern "with, and thus not without,
much less against, the advice of the Council". He had two votes in the Council, plus a
casting vote. If he found himself in a minority, he had to adopt the majority view "as
being in all probability the safest and best". An embryonic form of cooperation – in
the modern sense of the term – was established between the powers, insomuch as
nominations for Council membership had to be made by an appropriate Parliamentary
committee. Initially, the King could exercise freedom of choice, but this eventually
lapsed. The form of government became even more parliamentary in nature when the
Riksdag was given the power to dismiss a member of Council, thus enabling changes
to the Executive to be made whenever there was a new parliamentary majority
following an election (in the 1700s there was already an emerging distinction
between two opposing groups of parliamentarians).
In addition to its institutional organisation, Swedish constitutional history was also

innovative in terms of rights. The first Freedom of the Press Act dates back to 1754,
and it remains – albeit in a radically amended form – an integral part of the
constitutional corpus of the nation. The Act established, inter alia, the principle of
public access to official documents. The office of Parliamentary Ombudsman dates
442
back to the same year, when the Riksdag also decided that the Chancellor of Justice
should be appointed by the Riksdag and not by the King. At the same time, a clear
line was drawn for the first time between ordinary legislation and the Constitution –
at least at procedural level – when it was established that amendments to the
legislative acts composing the Constitution had to be approved by two consecutive
parliaments.
The happy, bloodless history of the Constitution outlined above was interrupted by a
coup d'état carried out by Gustaf III in 1772. This turned the clock back towards
autocracy and Sweden became embroiled in the Napoleonic Wars (as a result of
which Finland had to be ceded to the Russian Tsarist Empire). The State took a more
liberal turn in 1809, when the Regeringsform or "Instrument of Government" was
adopted, and this remained in force until 1974, albeit with several major amendments.
The initial reading of the instrument gave the King the lion's share of executive
power, whilst his Council was relegated to a subordinate role (this was countered by a
later development, whereby Ministers could not act without the confidence of
parliament). Legislative power was shared between the King and the Riksdag in
matters of constitutional, civil and penal legislation, while some administrative
matters remained the sole prerogative of the monarch. Parliament, however, held
sway over fiscal and budgetary matters.
The 1809 Instrument marked the starting point for the by now inexorable transition
towards liberalism, and – later on – towards democracy. From 1840, ministries were
coordinated with a view to establishing a single constitutional government. In 1866,
the old parliament of the Four Estates was definitively replaced by a two-chamber
Riksdag (the single chamber system was only introduced in 1969, more than a
century later). Between 1909 and 1921 suffrage was extended, finally becoming
universal and equal (first male, then female), while the growth of party organisations
made a proportional electoral model necessary.
443
While these acts were being successively adopted, the Regeringsform underwent a
radical transformation in terms of its application, in particular via conventions that
changed the original shape of a purely monarchical constitutional government into a
parliamentary one2. During the 20th century, and especially from the Second World
War onwards, it had become clear that the changes in society and the political system
underpinning it were putting pressure on the provisions of the 1809 text, and in the
end, irretrievable breakdown was unavoidable. However, the constitutional reform
process was lengthy and took place in fits and starts, starting in 1954 and ending with
the new Regeringsform in 1974. Since the beginning of the 1970s, only some partial
amendments have been possible.

1.1 The organisation of the State in the last thirty years. Historical
profile
Sweden is a consolidated democracy and has ancient constitutional traditions. In

relatively recent times the unusual organisational structure of the State was confirmed
as spreading all constitutional matters over four, and subsequently three, separate
Acts, rather than bringing them together in one single Act. In Sweden, the
"Constitution" refers to a package of legal acts comprising the "Instrument of
Government" (Regeringsform), the Act of Succession, and the Freedom of the Press
Act, whilst the Riksdag (single chamber parliament) Act is an important
constitutional source text. In reality, however, most constitutional material is covered
2
Biscaretti di Ruffia, P. (1994), pp 274-275.
444
by the Regeringsform, adopted in February 1974 and which entered into force in
1975 (replacing the corresponding act dating back to 1809)3.
From 1971, however, numerous changes began to be made to the shape of Swedish
government, having matured slowly over previous decades. From that year, in
particular, the old upper house of parliament was abolished, giving rise to the single-
chamber parliament currently operating in Sweden, and the Riksdag's electoral period
was reduced to four years.
The constitutional text of 1975 is particularly noteworthy for its reduction of the role
of the monarch to a purely honorary, formal one, removing all the "constitutional"
features of the Swedish monarchy and replacing them with a wholly parliamentary
set-up. The extremes to which this was taken can be seen from the fact that the King
no longer signs legislation; he does not even have the formal power to appoint the
Prime Minister (who is appointed by the President of the Riksdag, and only on
condition that the proposal is not rejected by an absolute majority of the Assembly);
he no longer attends the Council of Ministers; he does not inaugurate Riksdag
sessions by reading the "Crown speech", as was the custom in the past, along the
lines of the British tradition.
On the strictly normative level, then, Swedish government is a strongly parliamentary

system in which the Riksdag predominates as the control centre for government
activity. This does not imply some kind of "assemblyism", since it is in fact possible
to have minority governments – as has indeed happened repeatedly – and the Riksdag
can cause a government to fall, leading to the immediate dissolution of the
government.
3
For an overview of recent Swedish constitutional events, see Holmberg, E, Stjernquist, N.
(1985); Lauvaux, P. (1986).
445
Alongside the parliament, however, the political parties have – indirectly – a
privileged position, which they must express through parliament itself. This major
role can be found in Chapter III of the Constitution, which introduces proportional
representation for Riksdag elections, and expressly provides that the seats must be
allocated between the parties.
This stable position afforded to the parties is, in fact, a key feature, and is a result of
the extraordinary way the party system is anchored in the political history of the
twentieth century. With reference to the party system, two apparently mutually
exclusive phenomena have always coexisted: two opposing blocs (one on the left,
dominated by the Social Democrats, and one comprising the three or four parties of
the "conservative" bloc) both aspire to government in what appears to be a
competitive model of democracy, yet this combines with consensus politics in that
the consent of all parties – including the opposition – is required for fundamental
decisions on governance, such as any revision of the Constitution. Moreover there
has always been a strong neo-corporatist element to Swedish politics, whereby a large
number of decisions, particularly in social and economic affairs, are only adopted
following highly formal consultation procedures – including at the legal level – with
the "social partners" (especially the trades unions).
Finally, the impact EU accession has had on the way the Swedish State is organised
cannot be ignored. Accession was the culmination of many long years of discussion
and debate, but only came about in January 1995 as a result of the referendum held in
November of the previous year (and won by a slim margin, with 52.2% voting
"Yes"). Despite the fact that most parties have a generally favourable attitude towards
European integration, it must be said that – for the moment – some aspects of the EU
are not seen in an equally positive light. This is particularly true of joining the euro
and the European Monetary System, when 56.1% of voters voted "No" in the
September 2003 referendum. In Sweden it is widely believed that the main reason for
446
voting against the euro, alongside fears for the national currency, was that other
aspects of residual national sovereignty would have been put at risk, especially
welfare policy, although the latter was sized down after the fiscal crisis of the early
1990s.

developments
Sweden has a long tradition of respect and consideration for its local authorities. This
tradition has not focused so much on the regional level of devolution as on the
municipal and county level (until only recently the City Council and the County were
the only government authorities, in addition to the national parliament, to have
deliberative assemblies elected by direct suffrage). The municipalities and counties
were given important powers in the area of services of general interest, particularly
when the welfare state was at its peak. The municipalities have been tasked with
running the bulk of the school system and support services for childcare and senior
citizens, whilst the counties look after healthcare in general, in addition to transport.
Traditionally, the regions were viewed in an exclusively historical, cultural context,

and have only been included in the institutional framework to a small extent. There is
currently a comprehensive law governing the organisation of the municipalities and
the counties (Local Government Act, Sfs 1991: 900, entered into force in January
1992, subsequently amended)4. In terms of devolution, this law still provides for the
traditional division into Municipalities and County Councils (Art. 1). The legal basis
for other forms of devolution is to be found in Art. 20 of the Act, which enables
4
This can be studied in more detail (also in English) on the Department of Justice website,
www.justitie.regeringen.se/propositionermm/ds/pdf/ds2000_72.pdf.
447
Municipalities and Counties to set up "federations" of equal agencies in order to best
perform the tasks entrusted to local government. These federations have their own
statute and an Assembly elected by the assemblies of federation members, as
provided for in the statute (Art. 23). The accession of Sweden to the European Union
in 1995 seemed to require changes to the Swedish model of local government in
order to adapt to the continental model. However, this operation has yet to be
completed, and there is still controversy as to whether it should be done or not. In the
second half of the 1990s, pilot projects were launched to identify new local
government areas in the counties of Kalmar, Gotland, Skåne and Västra Götaland.
The main objective of these projects was to encourage greater democratic
participation at local level, but beyond the narrow municipal level. In 2001 the
Swedish Parliament decided to continue the pilot projects until 2006, but limited to
Skåne and Västra Götaland5. It can be seen, then, that an asymmetric model of local
government had been taking hold in Sweden for some years, with some experiments
in regionalism in one part of the country, while elsewhere the old system remained in
force, most recently regulated by the Local Government Act of 1991. The Riksdag
then decided to enable any other county that so wished to set up "Regional
Development Councils", comprising all the municipalities in the area involved, and
also – on a voluntary basis – the relevant County Council. However, rather than being
pilot projects, these bodies are definitive in nature. On the basis of this plan, eight
Regional Development Councils have since been set up, including the former pilot
regions of Kalmar and Gotland. Efforts are currently underway to set up eight similar
bodies. The areas covered by the Regional Development Councils (Kalmar, Gotland,
Blekinge, Halland, Östergötland, Södermanland, Uppsala, Dalarna) enjoy a form of
autonomy somewhere between that of the pilot regions and the traditional counties, in
the sense that legally speaking they are statutory joint authorities (Kommunalförbund
in Swedish), but they do not have locally elected assemblies. It could therefore be
5
Cf. Regional Development in Sweden,
www.lf.svekom.se/tru/RSO/Regional_development_in_Sweden.pdf
448
said that, while they have won areas of competence compared to the national controls
that the old counties are subject to, they do not enjoy similar independence from their
constituent parts (and from the municipalities in particular).
The two pilot regions have, in the meantime, set up directly elected regional councils.
Like the traditional provincial-type counties, they continue to manage medical and
health services, but in addition they have full responsibility for regional development
policies, which in the past had been – as they continue to be in the "traditional"
provinces – the prerogative of a different type of body, i.e. the County Administrative
Board). It should be said that the latter is not an offshoot of provincial government
but rather a central government body that operates within the county, with a two-
pronged remit of stimulating local development and of monitoring the policies
adopted by the local authorities in their area of competence. It is clear, then, that the
greater autonomy of the areas that have formed Regions (albeit still with "pilot"
status) derives from the fact that certain powers have been devolved from the
government authorities – particularly development policies – and from a partial
relaxation of state control.
1.1.2 Relations between the central government and the regional/local

levels of government
It is commonly acknowledged in Sweden that central and local government –

especially the municipalities and counties – cooperate continuously in a wide variety
of ways and in a large number of areas. The local authorities exercise a wide range of
powers, whilst remaining within the limits set by parliament and the national
government, even if this often means resorting to consultation with the other
institutions and social partners. Of particular note is the dual role of the County
administrations, which are both a channel for central government and a voice for the
local electorate. They include a County Administrative Board, which can be
449
considered a devolved arm of the government in that its governor, whose role can be
compared to that of an Italian Prefetto, is appointed by the government, while the
other members of the Committee are elected by the County Council. The counties are
also an important link between constituents and their municipalities.
The Swedish local government regime is, to some extent, covered by Chapter VIII,
Article 5 of the Constitution (Acts of law and other provisions). Under the same
provision, the State plays a guiding, supervisory role over the local authorities, in
particular by means of traditional instruments such as legislative and regulatory
instruments. The relevant agencies also monitor local and regional authority
operations closely. Local powers are essentially concentrated in the fields of
education, healthcare, urban planning and housing, within the limits established by
national law (since these agencies lack legislative powers), with the specification that
the municipalities must focus on schools policies, social welfare for senior citizens
and people with disabilities, road works, and water and energy; while the counties are
mainly responsible for larger budget items, from universal healthcare in the broad
sense, to public transport and regional development, especially in the field of
commerce, tourism and cultural activities. The dentistry strand of healthcare comes in
for special attention, both in terms of prevention and treatment. An additional form of
state supervision can be seen from the fact that a decision adopted at local level is
always open to appeal – including from an individual – before a national
administrative court.
Sweden has long-established, consolidated forms of association between local

authorities. The Swedish Association of Local Authorities6 was founded in 1908. It
6
www.svekom.se
450
currently represents 290 primary authorities and its main statutory purpose is to
support and develop the system of local self-government, to defend the interests of
the local authorities, to promote cooperation between peer authorities, and to provide
the local authorities with special consultancy services. The association holds a
conference every four years, usually in the year following local elections. The
conference elects a 21-member Executive Board and a president. There is also an
Administrative Director, who answers to the Committee. At the end of the 1990s, the
Association employed some 280 staff. Approximately half of its funding comes from
local authority membership fees, while it funds the remaining half through its own
expert, educational and outreach activities.
The Swedish Federation of County Councils7 also plays an important institutional

role, and looks after the interests of these councils in their areas of responsibility
(particularly healthcare and transport)8.
metropolitan cities
Stockholm is the biggest of the Swedish municipalities. From the financial point of
view, the municipality is able to pay its own way – with expenditure focusing on
schools, care for the elderly, utilities and housing – thanks in part to the fact that it
receives a direct percentage of income tax from city residents. The Swedish capital's
administration is entrusted to a municipal council, elected by universal suffrage.
Stockholm is also the county town of one of the twenty-one Swedish counties. The
latter are the only intermediate administrative level between the State and the
7
www.lf.se
8
For types of cooperation, see points 1.1.1. and 1.1.2.
451
Municipalities9. But it is at this level that the devolved national administration has
most contact points with the local authorities, since the municipal level has much
more autonomy. The County of Stockholm has some 1,800,000 inhabitants, with an
active population of 815,000 in paid employment. It covers an area of approximately
6,500 sq km, and stretches approximately 180 kilometres from north to south. The
county's areas of competence partly overlap with those of the municipality, although
the county is primarily responsible for healthcare and transport policies. The county's
role is expanding and it competes increasingly with the municipality. Compared to
the traditional Swedish model, it takes an innovative approach, for example by
buying in services from the private sector. The County Council, with its 149 elected
councillors, elects its own Executive Board. It should be mentioned that, despite the
County of Stockholm's innovative strategic choices such as contracting out county
activities to the private sector, it still has a large payroll of 50,000 employees, of
which 38,000 work in the healthcare sector and approximately 10,000 in public
transport, and is thus one of the biggest employers in the whole area. Healthcare
accounts for approximately two-thirds of overall County expenditure – funded from a
specific tax – while a fifth goes on transport.
Although we have highlighted the greater degree of autonomy that Stockholm City
Council – like all Swedish municipalities – enjoys from the government compared to
the situation for the County Councils, it should be specified that the City Council's
activities are subject to strict controls in terms of compliance with state legislation
and regulations. Stockholm, with its 755,000 inhabitants, is clearly the biggest
municipality in Sweden, and not only in terms of population. The 101 members of the
City Council are elected every four years, in conjunction with County Council and
national parliamentary elections. One of the most important roles of the City Council
9
For information on the way Stockholm is governed, see www.stockholm.se
452
is to set annual municipal tax levels and rates, and – more obviously – to approve the
draft and final budget.
By law, the City Executive Board comprises thirteen members, drawn from the
parties represented on the City Council. According to a somewhat unusual practice,
party representation on the Board is proportionate to the number of seats the party has
on the City Council. The main task of the Board is to draft and forward proposals to
the Council for adoption. However, in other areas, the majority principle prevails.
There is, for example, a Council of Mayors to which the political parties in power
appoint their own representatives. Each district of the city is headed by a member of
the Council of Mayors, and has its own area of competence. Stockholm currently has
a mayor and seven deputy-mayors, of which four are from the opposition.
The Council of Mayors expresses opinions and prepares all the paperwork for
submission to the Executive Board, and is chaired by the councillor responsible for
the City Council's financial policy, who goes under the formal title of Mayor.
Approximately two-thirds of Stockholm City Council expenditure is funded from

taxation, according to arrangements established annually – usually in November – by
the City Council. By way of example, in the 2003 budget approximately 65% of
municipal expenditure was allocated to the 18 districts into which the city is divided
up, primarily for school expenses and care services for the elderly and invalids, in
addition to maintenance of infrastructure such as parks and roads.
In May 1997, Stockholm City Council decided on a new strategy, with a view to
promoting better quality services. The implementing arrangements for this provide
for greater involvement of some categories of citizens – particularly those that have
the greatest need for these services – in the dialogue with the institutions. Moreover,
1996 saw the launch of a decentralised decision-making process, which coincided
453
with the subdivision of the municipality into the eighteen districts referred to above.
The districts were given the same powers and responsibilities as the other
institutional bodies. The only difference lies in the specific geographical area in
which the District Councils carry out their remit. Conversely, the only basic
competences remaining with the central bodies are taxation and the budget (subject,
however, to the binding principle of the fairest possible distribution of expenditure,
taking into account the needs of the individual districts).
Whilst acknowledging this effort towards further democratisation, it must be said that
it does have some limitations. For example, it has been noted that the party basis for
allocation of seats on the Stockholm District Councils corresponds to that of the City
Council. Here the consensus model that typifies Swedish democracy is accompanied
by a particularly narrow party conception of the way the public institutions are
organised. The party organisations put forward the candidates they want to represent
them in the individual District Councils, and these candidates are then elected as
members of the City Council to cover their respective areas. From the point of view
of their civic commitment, district councillors are not generally considered to be full-
time politicians, but people from different walks of life who are prepared to dedicate
some of their free time to these matters. Each District Council also has its own
administration headed by an Administrative Director who presides over the work of
the administration and is the main person responsible for implementing the
instructions and resolutions adopted by the District Council.
At all events, Stockholm City Council stresses that the purpose of this
decentralisation is to strengthen democracy – by bringing the decision-making
process one step closer to the people – with a view to improving council services and
making more efficient use of tax receipts, three quarters of which are now directly
allocated to the districts.
454
Finally, it should be pointed out that Stockholm City Council is considered to be the
largest local authority owner of service provider companies. Since 1991, nearly all
municipal companies have been incorporated into a single group, Stockholms
Stadshus AB. This consolidation into a group that currently comprises 28 companies
and branches has enabled the Council to wield greater influence over these
companies, partly thanks to the fact that it can appoint the Board of Directors. The
Council also establishes the criteria the companies must use for setting their prices to
the public, especially as regards water supply and refuse collection. The parent
company, in turn, is responsible for the general development of the group and for
devising a strategy that enables optimum use of its financial resources.

As mentioned above, Sweden is a country in which the parties have strong roots, and
this applies equally to relatively recent ones. Nevertheless, a general decline in active
party membership has been noted over the last 20 years or so. However, parties have
not always been equally important at national and local level, as the latter level was
slower to become politicised. Until the 1920s, non-party lists were the norm when
organising municipal political representation. From the 1930s, however, party politics
became increasingly important in local government – starting with the major cities –
and reached its peak some forty years later, when the parties no longer restricted
themselves to electoral lists and began to intervene directly in the composition of
municipal government.
The fact that the parties play a part in the slow, cautious regionalisation process in
Sweden can be seen from the parties that make up the Riksdag and the extent to
which they are adequately represented. It must be said, however, that the ongoing
455
process of amalgamation and consolidation of the provinces into regions – launched
in the 1990s and whose outcome is uncertain – was, in part, entrusted to the very
authorities that are concerned by it.
The strong position the parties enjoy is also partly due to their strong role within the
local authorities, although it should be remembered that the local organizations of the
major parties – particularly the social democratic party – have to work within a more
centralised framework.
There are no regional parties – in the European sense – that have managed to gather
enough support to play any meaningful role, and even less so in the national
parliament. However, particularly from the 1990s, and in conjunction with a
reduction in the number of votes for traditional (national) parties, both the county and
the municipal levels have seen a significant increase in the vote for local groupings
that are confined to the local area, without necessarily being locally inspired. This
was particularly the case in the counties of Värmland and Norrbotten.
The election results tables, available on the website of the Swedish Institute of
Statistics (containing relevant archive data on previous elections), do not specifically
refer to any such local groupings, including them under "others".
456
In Sweden a useful debate has developed around the theme of social capital10, or the
contribution the voluntary sector can make in providing for the general interest. As is
widely known, for decades the Swedish model has been characterised by a high level
of public intervention in the economy and in various levels of social life, with a large
share of public expenditure being allocated to the welfare system and a neo-
corporatist approach to the adoption of specific policies. Generally speaking,
compared to other countries the Swedish associative sector is more active in areas
such as recreation, sport, culture, vocational training and adult education, while it
seems weaker – precisely because of the involvement of the public authorities in
these areas – in social services, health and compulsory education. Their increasing
importance in the former has been particularly significant since the immediate post-
war period as a result of declining participation in political and trade-union
organisations.
The argument most frequently advanced as a consequence of the above is that this
omnipresent public intervention in Swedish society has become a disincentive to
initiative, including in areas in which the voluntary and associative sectors would
normally play a key role. It has thus been advanced that, unlike the British welfare
system, the Scandinavian model – and in particular its Swedish prototype – was
designed to satisfy the whole gamut of potential demand for social services without
bothering to single out the most needy sectors. It has also been asserted that, unlike in
other European countries, in Sweden the various types of voluntary associations have
not been involved in providing such services, since education, health and care of the
elderly have come to be considered – by the most popular political parties – as the
joint responsibility of national government and local authorities.
10
See Teorell, J. (2003)
457
While there is no doubt that this massive public intervention has reduced excessive
economic inequalities for individuals and families and eliminated extreme poverty,
concern began to be voiced – particularly from the early 1990s – as to whether these
electorally popular (and not just with the left), high-tax policies had not had the
unexpected and unintended consequence of distancing people from their
responsibility for various aspects of their own general welfare (it has also been
asserted that the very strength of the social democratic Swedish welfare model could
be the result of a society in which rigid norms of spontaneous control aimed to
establish mutual confidence in the social system).
Another feature that distinguishes the Swedish associative sector from other models,
in particular the British model, is also the reason it is more often than not described as
a perfect model, and is particularly relevant to the purpose of this paragraph.
Scandinavian civil society organisations – be they trades unions, voluntary
associations or ecclesiastical movements – have tended to be centrally organised and
have only managed to emerge at local level if they were already firmly established as
national entities. This is despite the fact that their local branches or sections are often
remarkably efficient, particularly in terms of ensuring full participation for their
respective central bodies. Consequently, it can be said that in Sweden participation
levels in the various forms of voluntary service do not differ greatly from one local
authority to another. In any case, since the epicentre of decision-making has
fluctuated between a strong central government and strong municipalities – while the
intermediate levels of government have always been weaker – it is at local level that
the associative sector, as society's counterpart to the public administration, has found
a more immediate, if not always the most independent, outlet.
In quantitative terms, however, some recent empirical surveys have shown that in
Sweden there is greater participation in voluntary service activities to help the sick,
458
the elderly or people with disabilities, compared to Great Britain, for example (with
circa 22% at least occasional voluntary workers in Sweden, compared to 15% in
Great Britain). These results were surprising, since in Sweden, the British experience
in this field has long been considered a source of inspiration. This would seem to give
the lie to the conviction that the greater public participation in social affairs, the less
society will take responsibility. However, it should be remembered that such surveys
– as the researchers themselves point out – often have the disadvantage of being
partly invalidated by the different, subjective interpretations the questionnaires can
give rise to –also for linguistic reasons –in different places.
From the 1990s onwards, the Swedish conception of the social partnership came in
for a radical overhaul. Until the 1980s, Sweden had one of the most neo-corporatist
models for public interest decision-making at all levels, based on a strong trades
union movement that wielded considerable influence over political life; on a
centralised collective bargaining system; and on a market that concentrated on a
small number of multinational companies.
Since the beginning of the 21st century, a new model has been said to be replacing the
previous one. This is characterised by greater fluctuation in the quality of public
policies as a consequence of changes to government coalitions; a stronger employer
presence in political life than was previously the case; a change in bargaining
methods, to the advantage of the decentralised level – and which was followed by an
increase in confrontation between the partners; increasing privatisation of basic social
services; an even more concentrated industrial structure than in the past. As this
summary and the more in-depth analysis to be found later in this study will reveal,
despite some brief attempts at reviving the previous methods, the interest groups that
459
make up Swedish society seem to be similar to those typical of the more
individualistic and competitive societies11.

LEVEL
As mentioned earlier, the current Swedish party system is firmly consolidated. It

began to take shape between the 19th and 20th centuries and has remained fairly
constant. Although most of the parties have roots going back centuries, it is only
relatively recently that they have begun to wield a strong influence in local political
life. This happened gradually, starting with the major cities. As to the electoral
system, since the beginning of the 20th century Sweden has had a system of
proportional representation for its Parliament and for municipal councils. Universal
suffrage has been applied since 1918-19. During the 1920s, non-party lists of
candidates were the norm for local authority elections. From the next decade,
however, in line with what was happening in other parts of Europe, party control over
the way the lists were compiled became more common in the municipalities, too.
Following the enactment of a law in 1950 that imposed a large-scale merger of
existing municipalities, partly in reaction to demographic redistribution in the wake
of the continuing process of domestic migration that had led to the depopulation of
various areas – there were almost no municipalities whose electoral lists were not
drawn up by the parties. According to the findings of a local government research
group, published in 1966, it was by then an established fact that the parties were
11
See also Pestoff, V.A., Globalization, Business Interest Associations and Swedish
Exceptionalism in the 21st Century?, in
www.unc.edu/depts/europe/papers/010319pestoff.doc
460
responsible for selecting the municipal candidates. Party interference in municipal
life probably reached its peak in the 1970s. It is widely accepted that increasing party
influence in local elections has helped increase turnout, thus combining a generally
unwelcome aspect (contamination of local administration with national politics) with
another, desirable, one (more popular participation in elections).
Until 1970, elections were held every four years, and kept separate from national
legislative elections (always for a four-year term). From then on, the system was
changed as part of a constitutional review that made the Riksdag the only
parliamentary chamber in Sweden and established that legislative, municipal and
county council elections would be held every three years. Turnout then increased,
exceeding 90% in the early 1970s. The situation changed in 1976, when the right to
vote was extended to resident immigrants (who can now elect local representatives if
they have been officially domiciled in Sweden for three consecutive years prior to the
election). In the following years, thanks to the fact that elections were held
simultaneously for both levels, a discrepancy of between two and four percentage
points in participation between national administrative and political elections (in
favour of the latter) could be seen. This was clearly because immigrants had been less
diligent about exercising their rights than Swedish citizens. At the same time, there
has been an increase in party votes in all elections, rising from 6% in the early 1970s
to 20% two decades later.
The relative stability of the Swedish party system does not mean that there have not
been important changes, including at local level. Small parties, whose area of
influence can be considered more local than regional, have sometimes achieved a
relatively high vote in local elections, while in the Riksdag they have only managed
to make a fleeting appearance thanks to cartel agreements with larger blocs. In some
cases, such as the Greens in 1985, local success was not matched by national success,
but it did anticipate it by three years. The same happened with the right-wing protest
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party, "New Democracy", whose local success in 1988 only bore fruit in the national
parliament in 1991.
In 1991 a local government law was passed (entered into force the following year)
with a view to enabling citizens to monitor and influence the decision-making
process and thus enhance democratic potential in this area. While it is not easy to
assess the correlation between intention and results, it was decided that parties that
win seats on locally elected bodies can receive subsidies – or alternatively enjoy free
use of goods or services – from the Assembly to which they have been elected,
subject to the discretion of the relevant body. Parties that are no longer represented
can continue to receive this assistance up to one year after the last elections.
Furthermore, support for party activities must not lead to unfair privileges or
disadvantages for any parties. At any event, the merits of this system are clear, in that
it provides the local level with the option – not the obligation – to fund political
groups, helps to free them somewhat from their economic dependency on the State
and thus makes local party organisations at least partly independent of their national
headquarters.
Moreover, in 1998 the old blocked list system was replaced, and voters are able to
express an individual preference. The aim is to reduce party influence to the benefit
of the electorate.
The following are the results, as reported on the website of the Swedish Institute of
Statistics12, of the last Riksdag elections, held in September 2002, and indicating in
brackets the number of seats won and the percentage changes compared to the
previous elections: Social Democrats (s) 39.8% (144 seats, +3.5%), Moderates (m)
15.2% (55 seats, -7.7%), Liberal Party (Fp) 13.3% (48 seats, +8.7%), Christian-
12
www.scb.se
462
Democrats (Kd) 9.1% (33 seats, -2.6%), Party of the Left (v) 8,3% (30 seats, -3.6%),
Centre Party (c) 6.1% (22 seats, +1.1%), Green Party (Mp) 4.6% (17 seats, +0.1%),
others 3%, no seats.
The national level results of the last County Council elections, held at the same time,
are as follows: turnout 77.5%. Moderate, or "non-socialist" bloc: Moderates, 16.6%;
Centre Party, 7%; Liberals, 12%; Christian-Democrats, 8.2%. For the broad left bloc:
Social Democrats, 38.5%; Left Party (former Communists), 8.4%; Greens, 3.9%.
"Others" received 5.4% of the vote. Turnout was lower than for the legislative
elections (80.1%), and a slow but constant common decline is confirmed
(approximately 10 points less than the 1982 elections). Moreover, it has been noted
that the parties of the non-socialist bloc – particularly the Centre Party and the
Moderates (but with the exception of the Liberal Party) – frequently win a lower
share of the vote in local elections than in legislative elections, while the reverse is
true for the Social Democratic Party. The share of the vote obtained by parties classed
as "others" in the official statistics is slightly higher in the administrative elections.
The local government law enables each municipality to seek the opinion of the
electorate on an issue of particular local interest. This can be done by means of a
referendum or a local public opinion poll. Municipal referendums are always of a
consultative nature. Thus far this type of referendum has been used in some thirty
cases, and – as in Finland – with the main aim of sounding out residents' opinion with
regard to changes to municipal boundaries. If at least 5% of the municipal or county
electorate sign a petition the local assembly can be asked to call a referendum on a
specific issue. If necessary, the relevant council can confine the referendum to a
specific area of the authority. The council, however, is never obliged to hold the
463
consultation, as it may decide independently whether to rely on the opinion of its
inhabitants or to resolve the matter within its own jurisdiction.
In Sweden there is limited identification with the regional dimension, whereas

identification with the municipality runs deeper. This can partly be explained by the
historical development of the country. From the 17th century Sweden began to assert
itself as one of the most centralised absolute monarchies in Europe. It was a State in
which the administration was closely controlled from Stockholm, and left a small
space open only to the municipalities, with no scope open to the intermediate level,
whose regional dimension was almost completely lacking any recognisable
individuality.
This attachment to the municipal authorities developed further in the 20th century,
partly as a reaction of some local communities to the depopulation caused by
economic migration – initially abroad, and later towards the cities and more
industrialised areas. However, it is mainly due to the huge role attributed to these
authorities in delivering welfare policies. Generally speaking, and notwithstanding
some limited discontent, Swedes report high levels of satisfaction with their local
administrators, compared to the European average.
As stated earlier in chapter I, the Regeringsform or "Instrument of Government",

adopted in 1974, is the backbone of the current Swedish constitution, and is spread
464
across a number of legal documents. It is a considerable document in terms of its size,
and goes beyond the narrow concept of government to embrace a whole array of
issues that can be deemed of constitutional importance. This act also articulates the
constitutional principles governing the economy, in addition to setting out a number
of provisions regarding the role of the State in this area.
The importance attached to the economic aspect of the relationship between, on the
one hand, individuals and, on the other, the authorities and political organisations,
can be seen from a first glimpse of the document, i.e. Article 2 of the first chapter of
the Regeringsform, on the "basic principles of the form of government" (it should be
noted here that each of the thirteen chapters is numbered independently, and thus
calls for greater precision when making legal references). It states that the personal,
economic and cultural welfare of the private person shall be fundamental aims of
public activity. The multitude of tasks – which could be defined as more social than
economic in nature – entrusted to the public institutions (in the continuation of the
Article) in order to meet the needs, including economic needs, show immediately that
the Swedish constitution is skewed towards strong public intervention in the
economy, while respecting inalienable values such as private property and
competition. An analysis of this first provision shows that the socio-economic brief –
at least as far as minimum provision of public services is concerned – is transferred
from Government and the parliamentary majority to the public authorities. The latter
are responsible for planning and implementing initiatives to promote the right to
employment, housing and education, social security and the environment. In other
words, these are citizenship rights, on a par with civil and political rights.
That said, it should be pointed out the Swedish Constitution is less detailed on
economic and social rights than on civil liberties and political rights, for example.
The second chapter of the Regeringsform ("Fundamental rights and freedoms")
comprises 23 articles, few of which contain any reference to the State's active
465
promotion of general welfare. In fact, the first seventeen articles are devoted
exclusively to the proclamation of individual rights relating to civil liberties,
arrangements for safeguarding them, and the (duly motivated and limited)
circumstances in which they can be restricted. However, private property is widely
safeguarded in Article 18, which is broadly similar to the protection afforded in other
European constitutions, except that expropriation for reasons of public interest – with
relevant fair compensation – is regulated in detail, as is compensation for a person
whose use of buildings is restricted by economic or other public interest use. Finally,
attention is also devoted to the right of public access to the natural landscape, thus
partly encroaching upon the exclusive protection of private property.
Also noteworthy is Article 20, which defines restrictions affecting the right to trade
or practise a profession. These may be introduced only in order to protect "pressing"
public interests and never solely in order to further the economic interests of a
particular person or enterprise.
However, there is much more detailed treatment of the regulation of public finances,
to which the whole of Chapter 9 of the Constitution is dedicated, although the first
article refers back to the previous chapter (on legislation) with regard to the State's
power to levy taxes and duties. Various provisions contained in the chapter establish
a saving clause for fiscal matters, both at national and local level. This a formal
reserve power, and excludes government action by means of a statutory instrument.
However, the executive can adopt provisions relating to the import or export of
goods, money or other assets, manufacturing output, transport and communications,
and credit and financial services policy.
The ninth chapter's provisions on public finances and, in particular, the budget are
fairly consistent with those of most other constitutions, from the government's sole
right to propose changes to the budget during the course of the financial year (which
466
has only coincided with the calendar year since 1997), to the option to include in the
budget appropriations covering different tax years from the current one. In order to
safeguard the constitutional position of Parliament, the document stipulates that,
unlike with other assets, assets intended for the Riksdag or for authorities under the
Riksdag are not at the disposal of the Government. It also stipulates that the
Government may not take up loans or otherwise assume financial obligations unless
authorised by the Riksdag.
The fact that the fiscal year must now coincide with the calendar year means that – by
law – the budget must be ready by 20 September. Since September is traditionally an
electoral month in Sweden, it has been agreed that the budget session must take place
no later than one week after the inauguration of the new Parliament, and – where
there has been a change of government – within ten days of the new Government
taking over (but by 15 November at the latest). Furthermore, since 1999, the
Government has been responsible for general currency policy matters. Other
provisions concerning currency policy are enshrined in law.
A special role, then, is attributed to monetary policy, which is managed by the central
bank or Riksbank. In addition to organisational autonomy, the central bank also has
sole authority over monetary policy (even though this, clearly, can impact on
exchange rates, for which the Government is deemed to be responsible). However, it
is important to note that the eleven members of the Governing Council of the
Riksbank are elected by the Riksdag, which can help to dispel concerns about
politicising the institution. Furthermore, the Council elects a six-strong Executive
Board for a six year term. The Executive Board is the true executive of monetary
policy, and it elects its own governor and a deputy. The Governing Council members'
authority is further limited by the fact that they can be removed by the Riksdag, just
as a Board member can be removed by Council members, albeit only if he no longer
fulfils the requirements laid down for performing his duties or if he has been guilty of
467
gross negligence. The Swedish Constitution does not dwell further on the general
aims of monetary policy, and the task of requiring the relevant institutions to
guarantee price stability is left to ordinary legislation.
Sweden has a highly diversified economy for a country of its population size. The
end of the 1800s saw the beginning of extraordinary industrial development,
particularly in heavy industry. This did not prevent development in innovative types
of production, especially in the period following World War II. The most traditional
areas of Swedish industry are those linked to the country's wealth of natural
resources, especially timber and iron ore. Recent decades have seen growth in
engineering and high-tech areas (from the automotive sector to aviation, civil nuclear
applications to weapons and pharmaceuticals). More recent still, however, is
Sweden's world-leading development in computer science and telecommunications
(although the latter began much earlier, due in part to the need to address enormous
distances between various localities in a vast, sparsely populated country).
Such an advanced, varied industrial base could not have developed if the goods it
produced had had to be sold on the domestic market only. Swedish industry has
skilfully exploited external markets, thus enabling it to make economies of scale and
spread its R&D cost over a larger production volume. Another feature of the Swedish
economy is the fact that public authority service delivery has actually helped rather
than hindered growth in the private economy, particularly industry. Keeping
economic policy on an even keel has helped create more space for the female
workforce and to focus on childcare, thus combining economic growth with social
demands.
468
It is widely known that, in the post-Second World War period, the Swedish economy
was one of the strongest, not just at European level but globally, managing to
combine high per capita income with an acceptable rate of social inequality. Later on,
however, and particularly in the last two decades, the gap with the other European
economies has narrowed significantly. Between 1980 and 2000, Gross Domestic
Product has not exceeded annual median growth of 2% (a result that contrasts with
the averages for the 1950s and 1960s of 3.3% and 4.6% respectively). The above
margin of advantage can be better understood if we consider the fact that in 1970, per
capita income in Sweden was 24% higher than the EU-15 average (taking the cost of
living into account), while this advantage had narrowed to barely 4% in 1999.
During the 1980s, the Swedish economy took a significantly different course
compared to the major European countries. Overall growth remained at similar levels
to other European economies, but the labour policies adopted meant that the
unemployment rate always remained lower than on the rest of the continent. At the
same time, inflation was higher than the European average, with large balance of
payments deficits.
The early 1990s were, however, the worst phase for the Swedish economy (as was
the case in other Nordic economies, such as Finland), and coincided with a severe
recession. Between 1990 and 1993 GDP declined by 5%, while unemployment rose
from 1.5% to 8%. During the same period, over 7% of the workforce was involved in
government vocational training programmes.
The crisis of the early 1990s coincided with an international recession, but it hit
Sweden particularly hard. This was partly due to the tight monetary policy used to
contain inflation. From 1993 until the end of the decade, the economy started to grow
again at a rather high rate (an average 3.2% per year). A major devaluation of the
Swedish crown in 1992 boosted the competitiveness of Swedish industry, giving rise
469
to a big increase in exports. Economic policy also played a part here. In particular,
the fiscal policy adopted to deal with the recession, the lower interest rates and
increased optimism of households induced the latter to save less and spend more.
This contrasted with the public expenditure cuts that also led to civil service job cuts.
For a certain number of years, improved output in the private sector was due
exclusively to increased productivity and more hours worked per worker. While in
the mid-1990s the moderate increase in private sector jobs was unable to compensate
for the loss of public sector jobs, in more recent years overall employment levels
have begun to rise again in both sectors.
The current state of the Swedish economy is satisfactory in terms of GDP,

employment and price levels. The link that has been established between economic
performance and investment in education and entrepreneurship – especially in the
industrial and high-tech sectors – is cause for particular satisfaction. Economic
performance has not, at least thus far, been affected or weakened by the "No" vote in
the September 2003 referendum on joining the European single currency. Without a
doubt, the result of the referendum has repercussions extending beyond Sweden's
national borders, and its implications for the euro have been contemplated. The
analyses – particularly sociological – carried out after the vote all concluded that,
rather than the European single currency or the impact of a "yes" vote on monetary
policy, Swedes feared the more general repercussions that joining the euro might
have on the economic and social model. For it is still the case that the Swedish social
model, despite being considerably modified by the streamlining operations of the
1990s, is still characterised by its concern to protect large sections of the population,
and by its ability to actually meet these requirements. Hence the concern to guard
national autonomy jealously in this policy area, which is at odds with the fact that
Sweden could easily satisfy – or would have satisfied – almost all the criteria for
joining the euro (with the sole exception of certain aspects of the Central Bank's
relationship with government). More recently, there has even been a marked
470
improvement in the financial health of the nation, given that in 2001 – which marked
the high point – the national budget even recorded a GDP surplus of 4.8% (compared
to the 12% deficit of 1993), while total national debt remains around 57.5% (against
the 73% of the early 1990s).
Privatisation is, however, a different matter. It is important to remember here that

there has been no major industrial privatisation over the last few decades, given that
there was no extensive system of public industry or public-backed industry. The
privatisation process began later than in other countries, and took place in partly
different circumstances. For the purposes of this study, it has particularly concerned
public services and involved the local authorities because of the significant role they
play in this area. The first stirrings of privatisation began in 1991, when a centre-right
Government came to power. This Government encouraged private management,
especially in education. This policy has been continued – in part – since 1994, when
the Social Democrats made a stable return to government13.
In the last few decades, local government's increased responsibility for public
services has led to a sharp increase in expenditure. As early as the mid-1990s it was
estimated14 that in Sweden local authority consumer expenditure was equal to 20% of
GDP, and accounted for as much as 70% of public sector expenditure. This huge
expansion started in the post-Second World War years and grew constantly until the
second half of the 1980s. More particularly, the rapid increase in local government
expenditure – in particular towards the end of the 1960s – was a result of the State
13
Committee of the Regions (1999), point 4.4. (Sweden)
14
Strömberg, L., Engen, T. (1996), p. 257
471
transferring responsibility for upper secondary education and psychiatric services to
these authorities. In the last two decades the freeze and even occasional fall in overall
expenditure was a result of the recession that hit the country in the early 1990s,
forcing the Government to adopt an austerity policy.
As mentioned above, Swedish local self-government is based on its independent tax-

raising powers. Local taxes and transfers from central government are the main
source of income. Other revenue comes from taxes levied to fund specific services,
from business activity and from loans. The main source of local taxation comes from
a proportional income tax levied on the residents of the relevant municipality. The tax
rates are determined by the Municipal and County Councils. Over the last few
decades, the overall local tax rate has risen in line with the increased responsibilities
attributed to the local authorities, rising from 14.6% in 1960 to a more or less
constant 30% to just over 31% from the early 1980s until 200315. Within that rate,
some 20% goes to the municipality of residence, with the remaining 10% going to the
County. Although local taxation has remained essentially unchanged over the last few
decades, municipal income has risen slightly, to the detriment of the Counties.
Furthermore, the abolition of local taxes on legal entities in 1987 led to cuts in
service funding, particularly in the major cities. The rising local tax burden, while
inevitable, also persuaded central Governments to try and hammer out agreements
with the representative associations of the local authorities, with a view to persuading
them to curb their appetite. It is interesting to note that the Governments have,
generally speaking, preferred to abstain from direct authoritative methods, preferring
to use instruments of persuasion, although in some cases there were threats to cut
central funding for any authorities who were abusing their own tax raising powers16.
15
For sources see www.scb.se
16
Committee of the Regions (1999), point 4.2. (Sweden).
472
Since, (as long as the principle of proportional taxation is respected) local authority
tax legislation leaves the authorities some room for manoeuvre on tax rates, and since
the authorities make wide use of this option, the national budget constantly has to
allocate huge sums for transfers to compensate individual authorities (in 2003 the
lowest local tax rate was 28.9% and the highest 33.7%). In the 1980s, however,
compensatory transfers were made to almost all local authorities, thus losing their
original intention.
Moreover, unlike the rise in local taxes, central transfers to the municipalities and
Counties stopped increasing in relative terms from the mid-1980s (while continuing
to grow in absolute terms, given the increased local authority responsibilities). Since
then they have remained at circa 26% of total local authority income, forcing them to
rely more on their own resources, while independent county and municipal taxation
now accounts for 48% and 68% of income respectively (with an increasing role
played by ring-fenced taxes for specific services). The recession of the early 1990s
caused problems in local authority funding. Central government transfers were frozen
and the local authorities, unable to put up their own taxes, forced many municipalities
to cut funding for some social programmes. The improved economic and financial
situation then enabled the State, from 1997 on, to increase funding again, increasing
the local authorities' financial resources by some 4.5%.
Moreover, the central transfer system has played a crucial role in central Government
supervision and control of the municipalities. The pros and cons of this type of state
policy have long been debated. In recent years, state subsidies for specifically
declared purposes have tended to be overtaken by non-specific transfers, thus
confirming the trend towards devolution and more discretionary powers for the
municipal authorities.
473
of the unions
Experiments with innovative types of public-private cooperation really took off in

Sweden in the early 1990s. This new way of interpreting public service provision had
been preceded in 1984 by new legislation on the "Free Municipalities", which was
later emulated in other countries. Under this legislation any municipalities that had
asked for more autonomy – and had demonstrated their ability to comply with certain
criteria – were granted greater organisational independence (especially as regards the
structure of the Municipal Executive, but also more flexible management of available
resources) and allowed to establish a more communicative relationship with the
public by, for example, allowing parents to play a greater role in the decision-making
process in schools. This system created a limited, controlled form of local authority
deregulation. It did not mean exempting administrative matters from any form of
regulation, but rather bringing the forum for making regulatory decisions closer to the
level for which it was intended. Initially, central government was somewhat reticent
to devolve these powers, but in the wake of the reasonably positive results of some
pilot projects, many of the features that had been tried out in some municipalities
since 1984 were incorporated into the new local authority law – which entered into
force in January 1992 – and thus extended to all municipalities. This was, however,
only a partial administrative devolution, implemented more for "community" reasons
than out of a desire to step up public-private cooperation.
The results of another experiment of the early 1990s were somewhat different,
however. This consisted in the introduction of a purchaser-provider model in the
provision of certain services, with the municipal administration being split into two
distinct sectors, one political (as a purchaser) and the other productive (as a provider).
This resulted in greater competition since, from then on, contracts could also be
agreed with the private sector. Even municipalities that have not formally adopted
474
this organisational model have largely contracted services out to the private sector. In
the mid-1990s, contracts with non-municipal providers accounted for more than 10%
of municipal expenditure in Sweden.
Important changes have also been made in terms of union activities in the local
authorities over the last few decades. Union rights had been increasing since the
1960s when workers were allowed to make collective agreements and to strike as a
last resort in cases of conflict. But the most important boost to the unions came in
1976 when, with the law on co-determination, the public sector's occupational
bargaining power became almost as strong as that of the private sector. Co-
determination legislation consists of two distinct strands. The first is collective
bargaining, while the second brings in rules on negotiation, information and
interpretation of collective agreements. The employer is obliged to launch
negotiations on any significant changes, whether they involve an individual employee
or the organisation as a whole. Generally speaking, the law on co-determination
introduces into Swedish labour law a bargaining system that significantly strengthens
the trade unions' hand in the decision-making process. A consequence of this
legislation is the huge increase in the amount of information that has to be given to
the unions. The resulting system therefore puts the decision-making process under
pressure in terms of time and resources. On the other hand, the system has generally
helped to improve relations between the unions and the local administration, despite
the fact that the original reasoning behind it, i.e. to find new forms of cooperation and
boost administrative efficiency, has proven difficult to achieve.
None of the above can disguise the fact that, as an inevitable consequence of the
serious economic and financial crisis that hit Sweden in the early 1990s, since that
time there has been a return to the trend towards containing the unions at all decision-
making levels. The anti-corporatist thinking of the neo-liberal government has
undoubtedly left its mark, with public sector union representatives now getting less of
475
a say. However, their considerable influence has not disappeared completely.
Workers' organisations are still active, although there are now fewer formal contacts
with policy-makers and administration. The involvement of interest organisations in
all areas of government policy-making – except for foreign policy and constitutional
policy – is now considered an inalienable right, especially as regards education,
social security and housing policy, in addition to tax policy17. Although – naturally
enough – the most important decision-making process remains the link between
Government and Parliament, it should still be remembered that all of the policy areas
mentioned must take the local dimension into account, since in Sweden this level is
tasked with major responsibilities. Some empirical studies have shown18 that local
government is still consulted, within the framework of its own activities, by a high
percentage of labour organisation representatives, ranging from 43% to 46%
(depending on whether they are officials or politicians). These percentages are only
just below those for trade union contacts with Parliament, while only contacts with
government departments exceed 60%. On the other hand, it is important to point out
that the average figure for employer organisation contacts with the local authorities is
under 20%, while employer contacts with government departments are on a similar
level to that of the unions.

Sweden is, of course, one of the more recent Member States of the European Union,
having joined in 1995. The local authorities were affected from the very outset by the
extension of Community structures to Sweden. At local level, twinning Swedish
cities with others abroad had marked the opening up of Sweden to the outside world,
17
See Svensson, T., Öberg, P. (2002), 297 et seq.
18
Svensson, T., Öberg, P. (2002), 307
476
although it should be said that this was mostly with other Nordic countries. It was
only in the last few decades that this was extended to other areas of Europe. In the
years immediately preceding accession, this open doors policy was stepped up and
began to yield results in more tangible areas. For example, while Sweden proved to
be one of the most willing countries to adopt the acquis communautaire before
accession and to implement the resulting jointly-decided policies, it was also thanks
to the success of the Community policy training courses organised in cooperation
with the European Union, and rolled out across the local level. There was also a fairly
close correlation between the percentage of "yes" votes in the 1994 referendum on
accession to the EU and certain socio-economic characteristics of the individual
voting areas. In particular, most in favour of joining the EU were densely populated
municipalities, which were often those with the highest employment/working age
population employment ratios, and with the highest service sector employment rates.
Municipalities with the opposite characteristics generally tended to be those most
against Sweden joining the EU.
Naturally, a more varied, complex discussion is required of the various structural aid
policies in Sweden, and particularly the regional and local dimension of these19.
Following EU accession, the regions most in need of support – generally those in the
north of the country – saw their potential stymied by the economic and, especially,
technological changes that had taken place during the same period. The whole Nordic
area was deeply affected by the structural transformation of their national economies
from industrial societies to societies based on services and information. One of the
first consequences of this structural change was increased migration towards a
smaller number of selected city centres. It should be said that, from at least the mid-
1990s onwards, this affected the Nordic countries much more than other European
countries. Around the end of that decade, internal migration in these countries had
19
Detailed, useful information on regional aid policies in the Nordic countries can be found in
Hanell, T. (2002).
477
reached levels that had never been seen in almost three decades. New and somewhat
unexpected demographic problems then became urgent agenda items in these
countries, requiring different policies from those implemented previously. Here,
regional policies – as many European Union policies are – can be particularly helpful
in meeting the new requirements.
National aid policies were cut back following EU accession, although they have not
yet been banned completely. European competition legislation forbids, in principle,
state aid to businesses, although some exceptions are allowed. As far as the Nordic
countries – Sweden in particular – are concerned, partial exceptions are allowed for
the northernmost regions, the relatively poorest, and also the most sparsely-
populated. At the beginning of the century, however, Sweden was noted for being the
country with the lowest population percentages receiving state aid, with barely 15.9%
of the population residing in economic aid zones (the figure for EU 15 was 46.7%).
As mentioned earlier, state aid policy in Sweden has traditionally focused on the
northernmost regions, which are characterised by their geographic remoteness, high
unemployment and demographic decline within a huge area. Swedish regional policy
has its roots in its famous welfare policies. Regional aid policy has a considerable
budget, and differs in two respects from that in the other Nordic countries. The first is
that nearly all the economic aid and development plans come under a block grant
assigned to the Swedish Business Development Agency (NUTEK) and to the County
administrative boards. The second is generous support for transport for businesses in
the less-developed north, based on a system of reimbursement of transport costs.
Several Structural Funds programmes have been implemented in Sweden since its
accession to the European Union in 1995. With reference to the programming period
2000-2006, a distinction should be made between Objective 1 and Objective 2. The
former, which absorbs the most European funding per capita, targets regions that are
478
lagging behind the Community average, but – as far as the Nordic countries that
joined in 1995 (Sweden and Finland) are concerned, they were extended during
negotiations to all sparsely populated areas (Nordic Objective 1). Objective 2
concerns manufacturing regions undergoing structural change, but also rural regions.
As far as Sweden is concerned, it also covers economically weak regions not covered
by Objective 1.
Objective 1 areas
The Norra Norrland region, comprising the huge counties of Norrbotten and
Västerbotten, comes under Objective 1. This is an enormous area of 154,000 sq km,
with a population of scarcely 512,000 inhabitants (with a density of circa
3 inhabitants per sq km). The population is concentrated around the coastal area,
towards which some inland residents migrate. The inland areas are experiencing a
significant fall in the numbers of younger inhabitants, and in 2001 the unemployment
rate for the whole area was 6,7%. Priority areas for the Structural Funds programmes
(apart from technical support) can be summarised as follows: 1) development of
infrastructure (including IT); 2) development of commerce and industry;
3) development of the workforce; 4) rural development; 5) support for the
environment, culture and the human environment; 6) support for the local Sami
population. For the period 2000-2006, total appropriations amount to circa
EUR 1 billion 40,000, of which 391 million come from the EU.
Objective 1 also applies to Södra Skogslän, which includes the counties of Jämtland
and Västernorrland and part of the counties of Gävleborg, Dalarna and Värmland.
This is a smaller area (95,000 sq km) and with a similar population
(443,000 inhabitants). The problems are quite similar to those of the above areas,
particularly the contrast between coastal and inland areas. Furthermore, there is a lack
of qualified labour in the hi-tech sector. In this area, programmes target the
479
following: 1) development of commerce and industry; 2) long-term learning and
development of human resources in working life; 3) development of rural areas,
agriculture, forestry and fisheries; 4) development of the human environment and
infrastructure; 5) programmes for the Sami population. For the period 2000-2006,
total appropriations amount to circa EUR 1 billion 86,000, of which 356 million
comes from the EU.
Objective 2 areas
There are currently four Objective 2 areas in Sweden. The Norra (North) Region has
635,000 inhabitants in an area of 32,000 square kilometres. Unemployment is above
the national average, while education levels are below average. Businesses in this
region find it particularly difficult to adapt to globalisation, and there is therefore a
need to open up more to the outside world and for an innovation-friendly
environment, particularly in IT infrastructure. Consequently, the programmes focus
on developing industry and on information-based productivity. For the period 2000-
2006, total aid amounts to EUR 628 million, of which 185 million comes from the
EU.
The Södra (South) region, part of which is covered by Objective 2, has a population
of 363,000 inhabitants in an area of 19,000 sq km. Here migration towards more
developed parts of the country is producing an ageing population. GDP is 20% below
Community average. Aid programmes focus on developing the human environment
(particularly education and entrepreneurship), with a budget of EUR 320 million, of
which EUR 83.5 million comes from the EU.
Objective 2 also involves part of the Västra (West) Region, which was hit particularly
hard by the recession of the early 1990s. Its population of 519,000 inhabitants is
spread over an area of 25,000 sq km. The Structural Funds aim to revive a spirit of
480
enterprise and cooperation between businesses and educational institutions, with a
view to the successful conversion of manufacturing industries. Funding of
EUR 430 million has been allocated, of which 124 million from the EU.
Finally, there is the island area "Öarna", off the eastern and western coasts of
Sweden, with a population of barely 87,000, and mostly concentrated on the island of
Gotland. The area includes a large number of small islands which are sparsely
populated and have inadequate services. The programmes focus on developing local
services and infrastructure, and EUR 101 million has been allocated under the
Structural Funds for the period 2000-2006, of which 30 million from the EU.

OF PUBLIC SERVICES

of public services
Compared to many other countries, Sweden has a relatively fair distribution of

income and total wealth. This is partly a result of high fiscal pressure on the one
hand, and the high rate of public intervention in the economy, particularly in services,
on the other. Towards the end of the 1990s, the civil service employed nearly a third
of the workforce, while the public sector redistributed 27% of GDP in transfers. A
significant proportion of public expenditure is funded directly from central
government, in particular for pensions, childcare and housing. Through the social
security system, the State also distributes additional benefits such as for sickness,
unemployment and parental leave. A feature of the Swedish model is the fact that it is
universal, compulsory and mainly funded through general taxation. However, as
mentioned earlier and as will be discussed in the next paragraph, it should be
481
remembered that this service model is largely entrusted to the local authorities, which
are responsible for paying out welfare benefits to individuals whose income is below
the poverty line.
However, the problems that fiscal pressure creates for the sustainability of the model
need to be discussed. In an increasingly open economy such as the Swedish one, the
nation's ability to maintain – largely unscathed – high levels of income redistribution
not only depends on the quality of the services offered, but also on tax competition,
involving a risk of capital transfers to lower fiscal pressure systems.
In Sweden, a considerable number of public services are provided by its 289

municipalities and 20 counties, in addition to the bodies that have been established
thus far under the ongoing regionalisation process20. The local/municipal dimension
of public services focuses mostly on education, care for the elderly and childcare,
whereas the counties concentrate on health policy and public transport at regional
level. For a better grasp of the importance of the regional and local dimension of
public services in Sweden, one needs to consider that most of the civil service
operates at that level, involving almost a quarter of the active population. Investment
by successive governments in the local authorities increased continuously in the first
decades of the post-war period, slowed down in the 1980s and stopped sharply in the
early years of the following decade, following a serious financial crisis and recession.
It was not until the end of the 1990s that Parliament was once again able to increase
transfers to the local authorities, which nevertheless continued to have a certain
degree of autonomy thanks to their tax-raising powers. However, since in previous
years lower incomes combined with almost unchanged fiscal pressure had led to
reduced income for the municipalities and the counties, an injection of additional
national funds in the second half of the 1990s enabled these authorities to avoid
20
Relevant information can be found on the Swedish public sector website: www.sweden.se
482
layoffs, and their staff numbers increased again by approximately 2% between 1997
and 2000.
Turning to the local dimension of services from the point of view of expenditure
volumes, towards the end of the 1990s the figures were 29% for schools and
education generally, 15% for childcare programmes, 28% for care for the elderly and
the disabled, 9% for individual and family support, with the remaining 19%
earmarked for other services.
Schools are thus a key area of responsibility for Swedish local authorities (with the
partial exception of cultural and scientific education at academic level). It is
important to highlight here the importance Sweden places on cultural and long-term
education, with courses often targeting older people. In the schools sector, significant
changes have been made in recent years: new knowledge requirements have emerged,
and the development of IT technology has made an enormous amount of new
information available. A nationwide pact was signed with teachers in 1996, making a
partial break with the centralised contractual model of education and paving the way
for new, different working methods. As a result, schools came under municipal
control and the municipalities began to take more responsibility for their own
structures and the way they operate. On the other hand, there is once again a
perception that the State needs to re-engage in the sector, but without losing sight of
the fact that any revitalisation must come from the schools sector itself, with teachers
as the driving force. An important part of the process outlined above are the different
career opportunities open to teachers who are prepared to take on more responsibility
for running the school. In this context, it seems that the Association of Swedish
Municipalities sees the State's vital contribution to upgrading the schools system as
inadequate to cover local authority commitments.
483
Another crucial area of responsibility for Swedish local authorities is social and
healthcare services. More specifically, the bulk of healthcare services are currently
used by people over eighty years of age. Statistics-based estimates have shown the
risk of mushrooming costs and increased pressure on local authority healthcare
services generally when the 1940s generation reaches that age. Some preparations to
deal with this are already underway, for example moves to take some of these
services out of hospitals and directly into patients' homes. However, while such
moves would ease the burden on hospitals, they would increase it for municipalities
and counties. These authorities are already facing an increasing burden in terms of
providing homecare services for people in their twilight years and for those with
disabilities.
A third crucial area of local authority responsibility should also be mentioned: urban
and local community planning and the environment. The local authorities are
currently focusing on developing technology infrastructure, especially IT. The
infrastructure sector is relatively well protected from economic shocks such as those
of the previous decade as it is funded directly through cost-price contributions rather
than through general taxation.
The end of the 1980s saw the first signs of a deterioration in the Swedish economy,
slowing down what had, until then, been continuous expansion of local authority
public expenditure, both in terms of their own taxation powers and of State transfers.
The freeze on the latter, in addition to legislation designed to block any increase in
fiscal pressure, forced the Swedish local authorities either to look for alternative ways
of funding their services, or to pursue an austerity policy. Furthermore, in 1990 the
social democratic government froze local taxes at the maximum levels reached the
previous year. The ensuing fiscal crisis forced the municipalities to reduce
484
expenditure on staff and even gradually cut staffing levels. They also failed to renew
contracts with third parties, and proceeded with privatisations and organisational
changes, ushering in management solutions more typical of the private sector. This
process was taken even further by the following "non-socialist" (centre-right)
government from 1991.
This was the beginning of the strategy, mentioned in Chapter III above, to contract
out to third parties a significant number of services that had previously been delivered
by the local authorities themselves. This is particularly the case with technical
services, although there has been a recent trend towards tendering out some social
contracts such as housing, care for the elderly and child support. In 1992 the Riksdag
even decided to grant funds to independent schools, making the municipalities
responsible for the content and funding of the services supplied by these schools.
However, unlike in some other European countries, municipal services have not been
privatised wholesale in Sweden. It has been observed21 that this new organisational
trend has transformed the role of local politicians, in the sense that they have ceased
"to govern" the administration or in matters of service provision, and become a sort
of guide for the citizen-consumer. As for the purchaser-provider system, given that it
seems to involve the administration more than the elected local council whose
political remit it ought to be, it has been subject to a review on several occasions.
21
Strömberg, L., Engen, T. (1996) 267.
485

and results)
A look at the websites of the associations of the municipalities and of the counties
(www.svekom.se and www.lf.se) gives a good idea of the extent of IT penetration in
Swedish local authority offices. All the Swedish local authorities are widely
represented with their own websites, which are generally well designed both in terms
of the wealth of information they provide and their user-friendliness. There are
almost as many pages in English as in Swedish, and some information is provided in
other languages. Sweden was one of the first EU countries to computerise its civil
service and exploit the possibilities offered by data transmission networks.
In Sweden it has also been found that IT in public services, and particularly in the
health service, is still underexploited. With a view to facilitating internal management
and coordination of public service provision, all Swedish counties, the few recently
established regions and some other bodies have been connected to Sjunet, an internal
network connecting the intermediate level, municipalities and the State. Sjunet also
provides common technical infrastructure for agencies that provide certain services
together. The local authorities have asked for more government help in promoting
this technology in the healthcare sector, as they feel they are unable to manage this
alone. This does not mean that they have just sat back and waited for government
help over the last few years: in 1997, on the initiative of the Swedish County
Councils and under the auspices of the Government, an R&D programme known as
ITHS was launched, with an initial investment of approximately SEK 500,000. The
overall objective is to give patients a greater say in their treatment and improve their
486
quality of life. There was a total of 479 project funding applications, 112 of which
were successful.

networks
Sweden is one of the most active countries in trying to promote IT as a means of

increasing public interest and involvement in politics. Naturally, if the debate on the
use of this technology in local democracy is not to be seen as a contradiction in terms,
one of the first things to ensure is that the maximum possible number of citizens have
access to it. This would avoid any new type of discrimination arising in the decision-
making process, the effects of which would be similar to those that used to occur with
the Census, but this time arising from the accepted problem of the digital divide22.
With reference to this problem, a committee set up to look into democracy in local
government released the results of a survey carried out in 2000 by Statistics Sweden,
which showed that 80% of the population between 18 and 64 years of age had
Internet access, either from home or at least from their place of work or study (90%
of those following a study course). In the spring of 2001, the Webbarometern
published research showing that 22% of those with Internet access had connected to
municipal websites between December 2000 and March 2001 (whereas barely 4%
had tried to connect to county websites). According to this research age differences
were negligible, as were those for gender, education levels and profession. The only
22
For a more in-depth analysis see Rosén, T., E-democracy (a paper for the Association of
Swedish Municipalities, which can be found at www.svekom.se/skvad/E-democracy-
en.pdf).
487
difference was between the three main cities and the rest of the country (to the
advantage of the rest of the country).
In this context, some Swedish municipalities have introduced – on an experimental

basis – procedures for consulting their fellow-citizens online on topical municipal
issues before the relevant departments draw up their plans. Clearly, a cautious
approach is adopted in this direct public involvement.
To date, the most significant example of IT-based public consultation has been in
Kalix, which in the autumn of 2000 launched a public consultation regarding plans to
reorganise the town centre. The municipal council organised a two-week consultation
period during which the public could provide input for consideration in the next
deliberation phase. Quite rightly, participation was limited to residents of the
municipality, and a password was assigned to those who wished to take part. This
enabled people to voice their opinion on the municipal website, while ensuring that
no-one could vote more than once. Furthermore, those without Internet access were
able to express their opinion by telephone, fax or letter (minors in their last year of
compulsory education were also able to take part). The consultation was based on
four different proposals, and the final level of participation was approximately 8% of
those eligible. While the decision to provide alternative voting arrangements for those
without Internet access was a welcome initiative, the overwhelming majority (82%)
did in fact use this medium.
Following the Kalix experiment, there were similar trials in terms of procedure and
objective in the Municipality of Bollnäs and the Norrmalm area of Stockholm. In
these cases, however, non-residents were also allowed to vote, in order to get as wide
a sample of opinions and suggestions as possible. The advisory nature of these
consultations was more pronounced in the case of Kalix, although in the case of the
Norrmalm area of Stockholm an even more specific question was asked (i.e. whether
488
to build an underground multi-storey car park, accompanied by detailed information,
including two-dimensional diagrams of the plans).
The success of these paved the way for new electronic voting trials with an even
more specific focus. With the technical aid of a private firm called Votia, new
consultations were held between the end of 2001 and the first months of 2002, once
again in Kalix and then in Nyköping, where the public was asked to decide on the
crucial issue of municipal taxes. In both cases the voting procedure – which lasted for
about a week – was preceded by an extended information campaign on the issues
submitted to the public and the arrangements for taking part (postal voting was also
allowed as a precautionary measure). Participation was very high in both cases,
involving 50% and 53% of the electorate respectively. Finally, in the city of Luleå –
once again in partnership with Votia – some 27,300 out of 58,700 eligible voters
(46.5% of the total) amended an urban traffic regulation decision previously adopted
by the City Council.
Clearly, unlike when the public is consulted at a more advanced stage of the decision-
making procedure, in a consultative operation such as the first trial in Kalix the final
decision taken by the authorities may differ greatly from the proposals put forward by
the public. The fact that a local referendum is not binding in Sweden does not alter
this. In spite of the highly democratic nature of such initiatives, which are little more
than experimental at the moment, it seems possible to conclude that the local
authorities do not generally feel that the time has come for electronic voting to play a
greater role in decision-making.
Since the 1980s in Sweden the local authorities have been keen to step up
opportunities for discussion between the respective administrations. This has
happened in conjunction with progress in IT capability and a decline in public
participation in the traditional instrument of democracy, i.e. political party
489
membership. Widespread interest in instruments such as electronic discussion forums
has grown out of the increasing focus on "single issues" and the movements they
have given rise to.
In committing themselves to the new challenges of the Information Society, the

Swedish local authorities were amongst the first in the world to provide their
employees and politicians with public domain email addresses, in order to facilitate
communication with the administration. However, it seems that most administrative
email has circulated internally, while the public has made only very limited use of
this resource. In order to address this problem, a large number of Swedish local
authority websites have for some years had open-access "electronic dialogue
systems" that provide a communication instrument for members of the public, and an
interface between citizens and the public administration. Experience has shown,
however, that this type of interaction is more problematic than merely asking the
public to answer Yes or No to a specific question. Unlike in the rare instances of a
formal request for a vote – albeit consultative – in the case of the discussion forums
participants were asked to consider a wider range of issues, with a wider range of
choices both for administrators and citizens. The ground rules are relatively more
rigid – e.g. deadlines for replying – for administrators. In order to encourage
maximum participation levels, every effort is made to reduce the formalities for
accessing the forum.
There is now a sufficient range of examples to establish a picture of the growth and
use of electronic forums in Sweden. The municipality of Bollnäs, for example, used
this instrument to sound out residents' opinions about erecting a monument and
rebuilding an art gallery that had been destroyed by fire. It also used it in connection
with raising taxes – for which electronic voting has been used elsewhere –
specifically with a view to increasing public expenditure on care for the elderly. The
"Karlskrona 2" plan took a somewhat more playful approach: planned under the
490
auspices of the City of Karlskrona in an effort to secure greater public involvement in
selecting administrators, it used a digital "virtual" copy of the city with simulations of
municipal life and asked the public to make the relevant decisions. In other cases,
such as in the municipality of Tyresö, the municipal public forum was inspired by
prior experience of contact between administrators and citizens, following an
initiative from the latter. Forums that are officially open to proposals from the public
are slightly more common than those where there is continuous direct interaction
between the two parties, but administrators are not required to enter into a discussion
of the issues raised.
Empirical surveys carried out thus far reveal that Sweden is ahead of its European
partners in this field. The analysis in www.itsweden.com 23 begins with a reference to
the main IT centres where the public can contact Swedish public institutions, from
the national to the local level. The foremost of these centres is SverigeDirekt, which
provides the main portal for the Swedish public sector. Proof of the attention the
Swedish authorities pay to higher education can be found at www.studera.nu, which
provides students with a one-stop-shop for up-to-date information on all national
education programmes. The existence of the Guldlänken (Golden Link) prize, which
is awarded annually to the best public administration website, confirms awareness of
the need to establish active online communication between the administration and
citizens.
In Sweden there is a strong trend towards facilitating online legal transactions such as
online payments and invoicing. Computers are used increasingly for such matters,
particularly in view of the fact that it lowers the cost of each transaction.
23
Schagerström, T. (2003), 164 et seq.
491
IT is also widely exploited in the health service under the Telemedicine or Telecare
system. The benefits include: a) a broader range of expertise available to the entire
healthcare system; b) access to a wider variety of equipment in the different areas; c)
faster, safer diagnoses; d) less need for patients and their relatives to be physically
transported for diagnosis and therapy. Furthermore, the following benefits have been
identified for the patient: a) greater choice of options for communicating with the
health service; b) more opportunities to organise meetings with all stakeholders
throughout the various stages of treatment; c) cost reduction in contacting staff; d)
better, faster access to up-to-date medical information. Telecare can also operate in
different ways, e.g. by enabling stakeholders to perform a search through databases
and registries of health service information; connect directly to staff training
programmes via videoconference; download information for later use; or simply ask
questions by email. However, certain obstacles to the introduction of these innovative
healthcare delivery arrangements should be considered: organisational difficulties,
problems involved in delegating responsibility to third parties and training staff in
new working practices, and even difficulties winning acceptance for the new
arrangements.
Telecare services were already in use in almost 75% of Swedish hospitals as early as
1998, in particular for consultations (unspecified), followed by ambulance and
emergency services, therapy programmes and test results. With regard to the
departments for which IT programmes had been provided, the percentages were as
follows: radiology 21%, pathology/cytology 14%, emergency/ambulance 13%, ENT
10%, cardiology 9%, neurology 6%, general and environmental medicine 6%, plastic
surgery 5%, ophthalmology 4%, dermatology 3%, oncology 3%.
492
There are uneven results in the use of Telecare as a cooperation instrument between
the different institutions. The highest percentage (36%) was achieved in cooperation
between provincial and regional hospitals.
As mentioned above, healthcare provision in Sweden is a specifically regional (i.e.

county) responsibility. This does not mean, however, that the municipalities are
completely free of responsibility, and they too have exploited IT potential in this
field. As many as 274 of the 289 Swedish municipalities agreed to participate in a
Carelink survey on IT use in the health service. According to the results of this
systematic analysis, thirty municipalities (circa 11% of respondents) have set up
telecare/telemedicine projects. Generally speaking, however, the municipalities still
feel they need much more IT support in their work, especially for healthcare and
childcare services. In addition to the 11% of municipalities that have prepared or
implemented IT projects in these departments, a further 80% have planned them or at
least think they would be worthwhile. More specifically, the results of the survey
reveal that: 9% of municipalities say telecare is already up and running in their own
administration; 12% have plans to launch telecare services; and 59% think they are
worthwhile. The percentages for providing healthcare information by email were 6%,
11% and 62%, while for exchanges of information using methods other than e-mail,
the figures were 18%, 12% and 52% respectively.
Since December 2001, on an initiative of the County Councils, the medical portal
Vårdguiden has been providing information on the main types of disease that require
treatment, but also on treatment and services offered at national level, their cost and
insurance options.
An e-prescription service is also being developed. These prescriptions are transmitted

automatically from the clinician to the national pharmaceutical system. This system is
more secure, since transmission by personal computer reduces the likelihood of
493
mistakes. Success rates in general practice and outpatients departments have been
better in this area than in hospitals, as the latter are less flexible. All public
pharmacies are already equipped to deal with e-prescriptions. In the first half of 2002,
approximately 1,200,000 e-prescriptions were processed by public pharmacies, out of
a national total of 30,800,000 medical prescriptions.
494
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Swedish Association of Local Authorities www.svekom.se
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Stockholm City Council www.stockholm.se
_____________
498

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Strengthening regional and local democracy in

the European Union

CoR Studies E-1/2004

UNITED KINGDOM 297

The Constitution of Ireland, as originally worded, only mentioned local government

The Twentieth Amendment to the Constitution, approved by referendum on 23 June

I. THE EVOLUTION OF FEDERAL/REGIONAL DYNAMICS.

1.1 Organisation of the State in the last thirty years. Historical

Described by contemporary historians as “a small country with a big history”, all of

The compromise enshrined in the treaty inevitably prompted Republicans, led by

Article 28 of the Constitution stipulates that the Government, comprising the

Analysis of Ireland’s practical experience, however, would suggest, that as in Austria

1.1.1 The evolution of regionalisation/federalisation procedures and

As a result of these changes, the Republic's local government system operates on

1.1.2 Relations between central government and the regional/local levels

Ireland is described as a unitary State with a highly centralised system of local

1.1.3 Local authority cooperation and associations

Local associations are particularly well-developed in Ireland. The General Council

In the Republic, the metropolitan government model is represented by five cities7:

Dublin City Council, for example, delivers services to a population of 500,000

Counties contain further local government areas, towns.

Some 13% of the country’s entire population live in towns.

1.2 The political and social players in the

However, Fianna Fáil continue to occupy a central position in elections; the

1.2.1 Regional organisation of political parties and movements

1.3 The importance of cooperation and social dialogue

II. DEMOCRATIC PARTICIPATION AT REGIONAL AND LOCAL

2.1 Voting in national and regional/local elections

Local elections 1967-19998

General elections 1987-2002

Year Fianna Fine Labour Progressive Sinn Green Others Turnout

In contrast, the Constitutional referendums referred to in Articles 46 and 47 are a

2.3 Community identification with regional and local government

III. REGIONAL AND LOCAL ECONOMIC DEVELOPMENT

3.1 The constitutional framework (economic and financial aspects)

The Central Fund, established by section 6 of the Constitution (Consequential

Whereas in the United Kingdom an extensive and far-reaching process of

1999 2000 2001 2002 2003

3.4 Public-private cooperation instruments. The intermediary role

Decentralised bargaining, in contrast, takes place at the level of individual sector

Although initially many sceptical commentators sought to interpret the European

The Structural and Cohesion Funds 2000-2006

Structural Funds Cohesion Funds

4.1 Management of public services. The regional and local

4.1.1 The impact of privatisation

The tax policy and various trade-related measures implemented by successive

Privatisation has been approached cautiously, as a result of the distaste expressed by

The first semi-State body to be fully privatised was the telecommunications

V. THE IMPACT OF INFORMATION TECHNOLOGY ON

5.1 Computerisation of public administration (projects, experience

5.2 Procedures and safeguards for electronic voting. The role of

The Government’s enthusiasm for e-voting as likely to produce major advances in

5.3 Information technology and changing public services

The introduction of computer technology was highlighted by the document Better

Andrew, C., Goldsmith, M. (1998), From Local Government to Local Governance –

Barrington Report (1991), Local Government Reorganisation and Reform, Report of

Better Local Government – A Programme for Change (1996), Dublin, Government

Border, Midland and Western (BMW) Regional Assembly (2000), Operational

Casey, J. (1987), Constitutional Law In Ireland, London, Sweet and Maxwell.

Chubb, B. (1996), The Government And Politics Of Ireland, London, Longman

Coakley, J., Gallagher, M. (1996), Politics In The Republic Of Ireland, Limerick

Cole, M. (2002), The Role(s) of County Councillors: An Evaluation, in Local