Nature over Art: No More Local Finance

Abstract

In 1866 an uncommonly knowledgeable gentleman, Alexis de Tocqueville by name, wrote as follows: “Je pense que dans les siècles démocratiques qui vont s'ouvrir l'indépendence individuelle et les libertés locales seront toujours un produit de l'art. La centralisation sera le gouvernement naturel.” Four score and five years later a distinguished compatriot documented the triumph of nature over art which de Tocqueville contemplated as a possibility, and analyzed at some length the instrumentality through which le gouvernement naturel has established its primacy over les libertés locales. Professor Jean Boulouis has recently pronounced a plaintive requiem for French local self-government culminating in these words: “On pourrait presque avancer, sans beaucoup d'exagération, qu'il n'existe plus de finances locales, mais tout au plus une localisation des finances nationales.”The two most striking phenomena of local government finance in recent decades are, first, the absolute increase in the amount of money disbursed by local governments, and second, the substantial expansion in the proportion of local government disbursements financed from intergovernmental transfers of funds—grants-in-aid, shared taxes, and various other devices by which money is shifted from one level of government to another.