Abstract EN:

The theory of fiscal federalism has recently recognised the importance of imposing a hard budget constraint to subnational administrations in a multi-tiered government. In the first part, we analyse the financial relationships between central government and subnational governments, and we provide a first survey of the emerging literature on soft budgets in multi-level governments. Then, we analyse the recent experience of developed countries. Applied to the case of French "communes", this theoretical framework leads to point out sources of strategic behaviour that would result from the decentralisation process, should the "péréquation" and fiscal financing of "communes" not be modified. The second part analyses the consequences of tax competition on the budget constraint of private partners (PP) of local authorities. Horizontal tax competition increases commitment capacity and may impose a hard budget constraint to PP. This result leads to overhaul the tax assignment problem. Then the thesis considers different types of financing federal government and shows that the source of financing matters for the status of PP budget constraint. Finally, it is shown that vertical tax competition may lower the commitment capacity of local authorities and then entails a soft budget constraint equilibrium.