Economic Arguments for Fiscal Decentralization —The Experience of Other Countries and Options for Slovenia

An important dimension of the public sector reform is the distribution of authority and financial resources for public services among different levels of government. Taking into account the theory of public choice and the data from six West-European countries, we attempted to discover whether population density and revenue in a country affect its degree of centralization. Unfortunately, the experience of developed countries in Europe cannot serve as a reference and a ground for comparison in seeking an optimum level of centralization of the provision and financing of public services in Slovenia. On the other hand, the development of “excessive centralization ” requires redress in favor of decentralization for a number of reasons