Fiscal Squeeze in Dutch Municipalities in the 1980s:

Abstract

This chapter analyses the fiscal problems of Dutch local government in the 1980s and the way that municipalities handled the fiscal squeeze of that time. It first explores the causes of the 1980s fiscal squeeze, that is, the decrease in municipal revenues (particularly in block-grant funding from central government through the ‘Municipal Fund’) and increase in expenditures, partly as a result of recession. It then describes the local government responses to the fiscal squeeze, that is, what cutback measures were taken and what strategies were employed, and explores the linked reform of the financial management system and adoption of ‘divisionalised business model’ structures. Thirdly, empirical evidence about the causes and effects of Dutch local public management reform is considered. Finally, the chapter discusses the longer-term effects that went beyond management reform, that is, developments in local democracy in the 1990s.