HOW DECENTRALISED IS GOVERNMENT ACTIVITY? RIGMAR OSTERKAMP,

The degree of decentralisation of government activ-ity can be measured and analysed in several different ways. In this article we use total government expen-ditures and ask for the share which is spent by sub-central levels of government. This share is then looked at for its development over time. In a third step, we consider that an equal share of sub-central expenditures might hide a different degree of decen-tralisation due to different sources of funds (own or grants from the centre). Finally we ask whether the different degrees of decentralisation might be explained by constitutional factors (federal and uni-tary) or country size measures (area, population). In a later article the question of decentralisation will be posed not for total expenditures, as here, but for its structure (single public tasks, functions). The question of the optimal assignment of public expenditures (or of specific public tasks) to the dif-ferent levels of government is not tackled. Nor it is asked how the optimal assignment would look when one adds a supra-national (e.g. EU) level of government activity. Method and data The degree of decentralisation can be approximated by calculating the sub-national government’s (SNG) share of general govern-ment expenditures or revenues and by distinguishing between dif-ferent public tasks. Such ratios are used in most empirical investiga-tions on decentralised government structures.1 There seems to be a consensus that the share of expen-ditures of sub-national govern-ments in total government expenditures is the best (or most accessible) proxy for the degree of decen-tralisation. Additionally, self-reliance or vertical imbalance ratios (grants from other levels of govern-ment as a share of sub-national expenditures) are constructed in order to examine the independence of sub-national levels. As a database, the Government Finance Statistics (GFS) of the International Monetary Fund is chosen, as is very common for most researchers.2 The coun-tries included in the study are the EU member state