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Article
Deficit control and fiscal austerity in the EU: time to consider the local impact
International Journal of Public Sector Performance Management (2016)
  • Enrico Guarini
  • Anna Francesca Pattaro, University of Modena and Reggio Emilia
Abstract
The recent public and academic debate in Europe about the extent to
which fiscal austerity can successfully reduce deficits and public debt, while
not inhibiting economic growth, has primarily taken place at the level of
national governments. In contrast, differences in the implementation of EU debt
and deficit rules at the local level and their social and political consequences
within member states have received much less attention. In this paper, we use
the case of Italy to reveal the potential impact of EU fiscal austerity at the local
level. To achieve this goal, the resource dependence theory is helpful both to
understand intergovernmental relations and to explain much of the local impact
of fiscal austerity. Our analysis shows that balancing the budget at the central
level cannot neglect how a balanced budget affects local governments’
financial management. In Italy, this process has led to a severe reduction in
public investments at the local level and to a lack of political accountability. In
terms of policy implications, this paper suggests that the EU’s policy makers
should consider local issues within the domestic settings more seriously and
that they should not neglect critical situations.
Keywords
  • deficit control; fiscal austerity; fiscal governance; fiscal rules; public financial management; local government; resource dependence theory; European Union.
Publication Date
2016
DOI
10.1504/IJPSPM.2016.10000577
Citation Information
Enrico Guarini and Anna Francesca Pattaro. "Deficit control and fiscal austerity in the EU: time to consider the local impact" International Journal of Public Sector Performance Management Vol. 2 Iss. 4 (2016) p. 348 - 369
Available at: http://works.bepress.com/enrico_guarini/41/