Select Committee on Treasury Minutes of Evidence



Memorandum submitted by Professor Iain McLean and Alistair McMillan, Nuffield College, Oxford

 

REGIONAL FINANCE AND GDP IN EUROPE

  The different methods of allocating finance between central and regional government depend on a variety of factors, including the taxation systems of central and regional governments, the number of government functions carried out at the different levels of administration, and the historical and political development of the regional governments. As noted in Iain McLean's evidence to the Treasury Select Committee (q 31), the issues surrounding redistribution of government resources in different countries are complex, and a much more in-depth study would be required to address these fully. This note presents some basic findings about the distribution of spending and the regional GDP of a number of European States.

  One question from the Treasury Select Committee evidence that can be answered, is Mr Beard's enquiry about the differences in regional GDP across the regions of major European Countries (q 28). Eurostat have provided information on regional GDP across Europe, as well as in the European Candidate Countries (Eurostat news release no 13/2002, 29 January 2002). They note that Inner London has the highest regional per capita GDP (with results adjusted to control for exchange rate differences[5]), and that regional inequality appeared to be highest within the UK:

    In seven of the 13 countries with at least two NUTS-22[6] regions, the highest regional per capita GDP was more than double the lowest. The highest figure was 3.7 times more than the lowest figure in the United Kingdom, the ratio was 3.1 in Belgium, 3.0 in France, 2.9 in Germany, 2.2 in Italy and Spain, and 2.1 in Austria (Eurostat 2002).

  The NUTS-2 categorisation used in the Eurostat analysis are based on the administrative divisions that exist in EU member states. In this note we look at regions of the major countries, in line with the approach used in the Fiscal Crisis of the United Kingdom paper.

  Table 1 presents an analysis of the range of GDP across the regions of some European Countries. This suggests that the broader pattern of regional inequality is not outstanding in the UK. France appears to have the most even distribution of GDP across regions (despite the inclusion of the exceptional De«partements d'Outre-Mer). The highest variation is in Belgium, caused by the small number of regions and the extremely high GDP of the Brussels-Capital Region. The case of Belgium shows that the choice of level of aggregation can influence any such analysis—in the UK the inner London effect noted above is diluted by its inclusion in the Greater London region. In Germany, the presence of rich city-States such as Hamburg, skew the distribution.

 

Table 1 Distribution of regional GDP in some European Countries


Number of regions

Overall GDP per capita (PPS)

Standard deviation of per capita GDP for each region

Standard deviation as a percentage of average GDP

UK

12

21,395

  3,864.4

18.1

Spain

18

17,480

  3,620.6

20.7

Germany

16

22,579

  6,509.2

28.8

Belgium

  3

22,645

12,836.4

56.7

Italy

20

21,970

  5,336.8

24.3

France

23

21,173

  1,955.1

  9.2

 

  The following sections present the country specific data used to construct Table 1, and provide a brief outline of issues relating to revenue allocation to regional governments in the countries.

BELGIUM

GDP per capita 1999 (Euro)

GDP per capita 1999 (PPS)

Brussels-Capital Region

46,989

46,179

Flanders

22,686

22,295

Wallonia

16,817

16,527

Overall

23,042

22,645

 

  Under the Saint Michaels Agreement (September 1992) Belgium adopted a federal constitution, as a means of resolving the tensions between the Flemish and French population (Delmartino 1996). This saw the construction of a complicated regional and cultural administration, recognizing three regions (Flemish, Wallonian, and Brussels-Capital Regions) and three cultures (Flemish, French, and German speaking). Since the 1970s there has been a move towards regional fiscal autonomy, although the regions have had limited tax raising powers and the complexities of the over-lapping regional and cultural bases of administration limited the scope of implementation. Under the Saint Michaels Agreement greater tax raising gathering rights were given to the regions, along with the introduction of a mechanism linking revenue to actual GNP growth.

  Delmartino, Frank (1996) "Belgium after the Fourth State Reform: Completed Federalism of Confederalism in the making?" in Gisela Fa­rber and Murray Forsyth The Regions—Factors of Integration or Disintegration in Europe? Baden-Baden: Nomos Verlagsgesellschaft: 117-144.

FRANCE

GDP per capita 1999 (Euro)

GDP per capita 1999 (PPS)

Ile de France

20,058

18,922

Champagne-Ardenne

21,247

20,044

Picardie

18,588

17,535

Haute-Normandie

20,880

19,697

Centre

20,328

19,176

Basse-Normandie

18,926

17,854

Bourgogne

20,439

19,281

Nord-Pas-de-Calais

17,937

16,921

Lorraine

18,745

17,683

Alsace

23,212

21,897

Franche-Comte«

19,479

18,376

Pays de La Loire

19,661

18,547

Bretagne

18,869

17,801

Poitou-Charentes

18,042

17,020

Aquitaine

20,580

19,415

Midi-Pyrenees

19,645

18,532

Limousin

18,216

17,184

Rho®ne-Alpes

23,096

21,788

Auvergne

18,946

17,873

Languedoc-Roussillon

17,576

16,580

Provence-Alpes-Co®te D'Azur

20,304

19,154

Corse

18,162

17,133

De«partements d'Outre-Mer

12,453

11,748

Overall

22,444

21,173

 

  Whilst French regionalism has been seen as institutionally and nationalistically weak (Corsica and the overseas de«partement excepted), there is a functional regionalism associated with the implementation of public-policy since the Etablissements Publics Re«gionaux in 1972. These reforms gave powers over regional and economic development, education, culture, and vocational training to the regions; although they have been described by Richard Balme as remaining "quasi-specialised attribution competencies, which means that regional initiatives are in principle limited to fields of intervention defined by law" (Balme 1998: 183). However, the relative strengths of de«partement, city, and national governments have restricted the scope for the political development of the regions, which has been reflected in a limited budget and weak social identification. Despite this weakness, the regions have been the conduit through which capital financing for infrastructure and education have been channelled (Balme 1998: 187-8).

  Balme, Richard (1998) "The French region as a space for public policy" in Patrick Le Gale«s and Christian Lequesne Regions in Europe. London: Routledge: 181-198.

GERMANY

GDP per capita 1999 (Euro)

GDP per capita 1999 (PPS)

North Rhine-Westphalia

24,547

23,046

Bavaria

27,869

26,164

Baden-Wurttemberg

27,166

25,505

Lower Saxony

21,865

20,528

Hesse

29,177

27,393

Saxony

16,069

15,086

Rhineland-Palatinate

21,574

20,255

Saxony-Anhalt

15,376

14,436

Schleswig-Holstein

22,467

21,093

Thuringia

15,695

14,735

Brandenburg

15,903

14,931

Mecklenburg-Western Pomerania

15,755

14,791

Saarland

22,385

21,015

Berlin

22,495

21,119

Hamburg

41,381

38,850

Bremen

32,164

30,197

Overall

24,050

22,579

 

  The post war West German constitution was constructed on a federal model, with the competencies of the States entrenched against the imposition of the federal government, although within certain administrative areas responsibilities were shared. The arrangement was reflected in the construction of the central legislature, with the popularly elected Bundestag counterposed with a Bundesrat, which was composed of members nominated from the State legislatures. The system has been described by Spahn and Franz (2000: 9) as one of "asymmetrical power sharing", whereby the federal government lays down the general framework of law, which is implemented by the States. Whilst taxation is determined by the central government, the revenues are disbursed amongst the States according to formulae with strong equalization components.

  The major recent challenge to the German Federal structure has been the unification of the East and West, and the very different patterns of economic development in the two areas. This has added a new dimension to the debate over regional government spending, and a challenge to what had emerged as a consensual form of interest intermediation which, up to the early 1980s, had operated relatively smoothly. Whilst the La­nder had shown clear differences in the rates of economic growth, Arthur Benz argues that this was not necessarily because of differences in regional policies, since the distinct economic regions do not coincide with the boundaries of the La­nder, although this may change as the regions increasingly become the focus of policy making and infrastructure development (Benz 1998: 114). This new political identity became increasingly apparent in the 1980s, when the Constitutional Court was brought in to arbitrate in disagreements over the degree to which Lower Saxony's oil proceeds should be taken into account when fiscal equalisation was being considered; and again when the city-states of Hamburg and Bremen agitated for special treatment (Sturm 1992: 121-2). The unification led to the institutionalisation of an East-West divide, reflecting their different levels of income and wealth; although this was partly implemented through extra spending allocations specifically linked to the one-off event of unification (through the German Unity Fund).

  Article 107 of the Constitution outlines the provisions for the financial equalization of government resource provision between States. Section (2) states that:

    It has to be ensured by statute, that a reasonable equalization between financially strong and financially weak States is achieved; due consideration being given to financial capacity and financial requirements of communes or associations of communes. Such statute has to specify the conditions governing equalization claims of States entitled to equalization payments and equalization liabilities of States owing equalization payments as well as the criteria for determining the amounts of equalization payments. Such statute may also provide for grants to be made by the Federation from federal funds to financially weak States in order to complement the coverage of their general financial requirements (supplementary grants). (http://www.jurisprudentia.de/index.html).

  The complexity of the system for financial equalization has, as noted above, caused controversy, which was exaserpated by the structural changes necessitated by unification. A ruling of the Federal Constitutional Court, or Bundesverfassungsgericht (1999), demanded clarification of the rules under which transfers between the centre and the regions was organized.

  The operation of federal fiscal relations was criticised by an OECD Economic Survey in 1998. This report argued that the existing system required reform: 'the integration of the new states is producing greater financial strains than anticipated, and as it has become increasingly evident that convergence will take some time, the danger has emerged that the incentive structure of existing financial relationships may be perverse: the system of inter-governmental transfers aimed at equalising revenue levels leaves little return to a state's efforts to improve its finances' (OECD 1998: 70). The Report argues that the system, which is based on the equalization of a putative measure of revenue raising capacity distorted the incentives to implement optimal policies, since successful revenue raising by a State could lead to greater transfers away from that State, and vice versa. It also suggested that the system was biased towards States with dense populations, which had incorporated special dispensations into the criteria determining the re-allocation of resources which created biases within the system[7]. The Report recommended moving away from a system of co-financing, to one whereby the poorer States would receive block-grants from the federal government, and States would have greater freedom to control their taxing powers and revenues.

  The ruling of the Constitutional Court on the Finanzausgleich called for clearer criteria for the redistribution of funds between States, and sought to break the link between tax income and redistribution. The German finance ministry responded by proposing that distribution of VAT revenues be adjusted to reflect financial equalization; replacing federal grants and complex co-financing arrangements.

  Benz, Arthur (1998) "German regions in the European Union: from joint policy-making to multi-level governance" in Patrick Le Gale«s and Christian Lequesne Regions in Europe. London: Routledge: 111-129.

  Sturm, Roland (1992) "The Changing Territorial Balance" in Gordon Smith, William E Paterson, Peter H Merkl, and Stephen Padgett (eds.) Developments in German Politics. London: Macmillan: 119-134.

  Spahn, P. Bernd and Oliver Franz (2000) "Consensus Democracy and Inter-jurisdictional Fiscal Solidarity in Germany". Paper presented to the IMF Conference on Fiscal Decentralization, 20-21 November 2000 (http://www.imf.org/external/pubs/ft/seminar/2000/fiscal/index.htm, accessed 18 July 2002).

ITALY

GDP per capita 1999 (Euro)

GDP per capita 1999 (PPS)

Piemonte

22,445

25,661

Valle D'Aosta

24,036

27,480

Liguria

20,232

23,131

Lombardia

25,330

28,959

Trentino-Alto Adige

25,234

28,849

Veneto

22,557

25,788

Friuli-Venezia Giulia

21,576

24,668

Emilia-Romagna

24,465

27,970

Toscana

21,112

24,137

Umbria

18,887

21,593

Marche

19,400

22,179

Lazio

21,633

24,732

Abruzzo

15,727

17,980

Molise

14,954

17,097

Campania

12,256

14,011

Puglia

12,511

14,304

Basilicata

13,881

15,869

Calabria

11,626

13,292

Sicilia

12,330

14,096

Sardegna

14,641

16,739

Overall

19,217

21,970

 

  The Italian government restructured the allocation of government spending between regions after the institution of Ordinary Statute Regions (in 1970-72), which were to be financed mainly by central government transfers. In recent years the pressure for regional fiscal autonomy has been increased with the emergence of the Lega Nord, with its strong base in the (richer) northern regions. In the poorer regions (the Mezzogiorno) there has been an active debate about the ability of regional governments to deliver public services (Giarda 2000: 6). The divergence between the economic performance of the north and south has been highlighted by the OECD, which raised concerns about the effectiveness of reforms to regional government in addressing regional equality (OECD 1999: Ch 4).

  The Italian Constitution (Article 119) sets out the basis of regional government finance:

    (1)  Municipalities, Provinces, Metropolitan Cities and Regions shall have financial autonomy with respect to revenues and expenditures.

    (2)  Municipalities, Provinces, Metropolitan Cities and Regions shall have autonomous resources. They shall establish and implement their own taxes and revenues, in harmony with the Constitution and in accordance with the principles of coordination of the public finances and the taxation system. They shall receive a share of the proceeds of State taxes related to their territory.

    (3)  The law of the State shall establish an equalization fund to the benefit of areas where the fiscal capacity per inhabitant is reduced, with no restrictions as to the allocation of its proceeds.

    (4)  The funds deriving from the sources mentioned in the previous paragraphs shall enable Municipalities, Provinces, Metropolitan Cities and Regions to finance in full the functions attributed to them.

    (5)  In order to promote economic development, social cohesion and solidarity, to remove economic and social inequalities, to foster the actual exercise of human rights, to pursue ends other than those pertaining to the exercise of their ordinary functions, the State may allocate additional resources or carry out special actions to the benefit of certain Municipalities, Provinces, Metropolitan Cities and Regions.

    (6)  Municipalities, Provinces, Metropolitan Cities and Regions shall have their own assets, assigned to them according to general principles established by State law. They may only contract loans in order to finance investment expenditure. Any State guarantee on such loans shall be excluded. (source: http://www.uni-wuerzburg.de/law/it00t.html).

  The provisions of section stress the importance of regional "needs" in the allocation of finance.

  Mediation between the state and regions are mediated through a State-Regions Conference, on which sit all Regions Presidents and certain members of the central Cabinet. Reforms suggested in 1999 led to each regional government presenting a programme of government spending, and bidding for government funds.

  There are three different type of regions: 15 Ordinary Statute Regions, and five Special Statute Regions[8].

  Giarda, Piero (2000) "Intergovernmental Fiscal Relations in Italy". Paper presented to the IMF Conference on Fiscal Decentralization, 20-21 November 2000 (http://www.imf.org/external/pubs/ft/seminar/2000/fiscal/index.htm, accessed 18 July 2002).

  OECD Economic Surveys (1999) Italy Report.

SPAIN

GDP Per Capita 1999 (Euro)

GDP per capita 1999 (PPS)

Andalucia

10,410

12,751

Canarias

14,035

17,191

Cataluna

17,461

21,389

Galicia

11,346

13,897

Valencia

13,786

16,886

Aragon

15,057

18,444

Asturias

12,317

15,087

Baleares

17,606

21,566

Cantabria

13,483

16,515

Castilla La Mancha

11,279

13,815

Castilla Leon

13,065

16,003

Extremadura

  8,985

11,006

La Rioja

16,121

19,747

Madrid

19,363

23,718

Murcia

11,822

14,481

Ceuta Y Malilla

11,345

13,896

Pais Vasco

17,515

21,454

Navarra

18,160

22,244

Overall

14,270

17,480

 

  Spain has undertaken a far-reaching decentralization of political and economic structures since 1978. As with the UK, this has been an asymmetric decentralization, motivated by long standing political imperatives; in particular the need to respond to separatist regional aspirations within a unified state. The pattern of reform has seen different fiscal and devolved institutions emerge in the regions, with certain regions (eg Basque Country and Navarra) given greater tax raising autonomy and control over government resources (see Guerra 1996: 154). As Vinuela notes, such asymmetrical constitutional principles can lead to problems:

    "On the one hand, they introduce notorious differences in the political influence of the regional governments in national policy. On the other, they may affect the economic capacity of the less endowed regional governments to provide the public servicers at a level comparable to that of other better endowned regions. When these two problems emerge, they are a worrying source of resentment and division between regions, and therefore, of instability, unless corrective mechanisms are introduced in the system" (Vinuela 2000: 4)

  Whilst the constitution does demand measures to promote the social and economic unity of the country, there are clearly conflicts between the political recognition of regional autonomy and the need to minimize inequalities between regions[9].

  Revenue assignment by the central government, therefore, has to reflect both the levels and capabilities for regional revenue generation, and the extent to which governmental functions are shared between central and regional governments. The process by which revenue assignment is administered is complex, with the central government responsible for overall macro-economic policy and dealing directly with EU institutions; a system of bilateral committees representing regional and central government; and a mechanism, the Interterritorial Compensation Fund, for judging differences in the regional resource costs of public service provision[10].

  The legal framework for the operation of the Interterritorial Compensation Fund is set out in an Organic Law on the Financing of the Autonomous Communities (LOFCA), which contains guidelines on the tax assignment and equalization of service provision. However, given that there are conflicting demands of autonomy and equalization built into the broader structure of the administration, there is wide scope for political manipulation of outcomes. LOFCA outlined certain parameters which would determine regional transfers, including population, "fiscal effort"[11], real income per capita, and the services which were devolved to regional governments; of which the key redistributive elements was income per capita. The "fiscal effort" criteria was imposed by the rich regions, to reflect better rates of tax collection (Vinuela 2000: 17). Additional criteria, such as insularity, surface, and population dispersion were added through negotiation. Each of these criteria were given weights, applied to aspects of government functions[12]. Weights were determined through negotiation, and varied over five yearly renegotiations. Health care and social security were excluded from the regional spending equalisation process; with resources allocated in terms of population and qualification, respectively. The system of resource equalization has had predictable political consequences:

    The advanced regions are of the opinion that the present financing system is already very redistributive . . . Less advanced regions consider that the present redistribution is not enough' (Vinuela 2000: 19).

  Guerra, Luis Lo­pez (1996) "Regions and Nationalisties in Spain: The Autonomous Communities" in Gisela Fa­rber and Murray Forsyth The Regions—Factors of Integration or Disintegration in Europe? Baden-Baden: Nomos Verlagsgesellschaft: 145-155.

  Toboso, Fernando (2001) "What degree of financial autonomy and tax responsibility do regional governments have in Spain since democratic transition in 1978". Paper presented to Conference on "Multi-level Governance: An Interdisciplinary Perspective", 28-30 June 2001.

  Vinuela, Julio (2000) "Fiscal Decentralization in Spain". Paper presented to the IMF Conference on Fiscal Decentralization, 20-21 November 2000 (http://www.imf.org/external/pubs/ft/seminar/2000/fiscal/index.htm, accessed 18 July 2002).

NOTE ON CHANGES IN REGIONAL PUBLIC SPENDING AND THEIR EFFECTS ON INVERSE GDP CALCULATIONS

  With the release of a new Public Expenditure Statistical Analysis (PESA) for 2002-03, it is possible to update the figures presented in the McLean and McMillan paper "The Fiscal Crisis of the United Kingdom".

  Tables 1a and 1b shows the changes in spending on "devolved programmes" (ie total regional spending minus spending on Social Security).

Table 1a Per capita government expenditure on "devolved programmes" in the regions of the UK



North East Region

North West

Yorkshire and Humberside

East Midlands

West Midlands

South West

Eastern Region

London

South East Region

1999-2000

2,803

2,704

2,480

2,416

2,517

2,405

2,389

3,330

2,346

2000-01

3,022

2,928

2,905

2,632

2,736

2,654

2,624

3,431

2,550

Change

   219

  224

   425

   216

   219

   249

   235

   101

   204

Source: PESA 2002-03.

Table 1b Per capita government expenditure on "devolved programmes" in the territories of the UK



England

Scotland

Wales

Northern Ireland

United Kingdom

1999-2000

2,612

3,412

3,095

3,881

2,740

2000-01

2,837

3,638

3,289

4,347

2,971

Change

   225

   226

   194

   466

   231

Source: PESA 2002-03, Table 8.6b.

  The changes are illustrated in Figure 1:

  Unfortunately, we do not have updated figures for regional GDP (due from ONS in November 2002) or differences in regional price levels. However, using the 1999 figures as proxies, we can extend the inverse GDP model to the current levels of spending.

  This gives us the updated table 2 and table 3, which replicate the analysis in tables 6 and 7 of the original paper, using the updated data. Since there are only marginal changes to the spending figures in table 1, and the GDP and price deflators used in the analysis are the same, there are no major changes in the pattern of distribution analysed here. A comparison of the effects of the changes in regional spending announced in PESA 2002-03 is shown in Figure 2, which transposes the original and new simulation of the effects of an inverse GDP formula (both unadjusted and adjusted for differences in regional price levels).

Table 2 Public spending under an inverse GDP formula (12 regions/territories)

 

Region

Actual Pub exp/head (A)

Index pub exp/head

GDP/head

Index GDP/head

InvGDP pub exp/head (B)

Residual (column A¸column B)

South-east

2,550

  86

15,098

116

2,553

     -3

East

2,624

  88

15,094

116

2,553

     71

Greater London

3,431

115

16,859

130

2,286

1,145

South West

2,654

  89

11,782

  91

3,271

-617

West Midlands

2,736

  92

11,900

  92

3,239

-503

East Midlands

2,632

  89

12,146

  94

3,173

-541

Yorkshire and Humberside

2,905

  98

11,404

  88

3,379

-474

North West

2,928

  99

11,273

  87

3,419

-491

North East

3,022

102

10,024

  77

3,845

-823

Wales

3,289

111

10,449

  81

3,688

-399

Scotland

3,638

122

12,512

  96

3,080

   558

NI

4,347

146

10,050

  77

3,835

   512


UK

2,971

100

12,972

100

2,971

       0

Source: HM Treasury, Public Spending Statistical Analysis 2002-03, derived from Tables 8.6b and 8.12b. Office for National Statistics, Regional GDP 1999, summary table.

Table 3 Public spending under an inverse GDP formula, adjusted for regional price differentials (12 regions/territories)

 

Region

Price index compared to UK averagea

GDP/head at PPP

Index GDP/head

Index GDP/head at PPP

InvGDP pub exp/head

InvGDP pub exp/head at PPP

Unadjusted Residual (from Table 6)

Residual at PPP

South-east

  3.1

14,730

116

114

2,553

2,408

     -3

-66

East

  1.5

14,871

116

115

2,553

2,385

     71

  32

Greater London

  6.8

15,786

130

122

2,286

2,242

1,145

990

South West

-0.7

11,865

  91

  91

3,271

2,985

-617

-594

West Midlands

-1.2

12,045

  92

  93

3,239

2,945

-503

-464

East Midlands

-1.7

12,356

  94

  95

3,173

2,882

-541

-487

Yorkshire and
Humberside

-3.4

11,805

  88

  91

3,379

3,006

-474

-360

North West

-2.2

11,527

  87

  89

3,419

3,070

-491

-416

North East

-4.7

10,518

  77

  81

3,845

3,381

-823

-642

Wales

-3.8

10,862

  81

  84

3,688

3,282

-399

-259

Scotland

-0.9

12,626

  96

  97

3,080

2,813

   558

  585

Northern Ireland

-0.2

10,070

  77

  78

3,835

3,506

   512

  520


UK

 

12,972

100

100

2,971

2,729

       0

      0

a Data for all units except Northern Ireland are inclusive of housing rents. For NI, relative housing rents are not available, so data are presented exclusive of housing rents. The effect of this is probably to exaggerate the positive residual for NI.

Source: HM Treasury, Public Spending Statistical Analysis 2002-03, derived from Tables 8.6b and 8.12b. Office for National Statistics, Regional GDP 1999, summary table. Price figures from Baran and O'Donoghue 2002: Table 2.

Figure 1: Government expenditure on `devolved programmes' in the regions and territories in the UK

Figure 2: Effect of changes in public expenditure on simulation of raw and PPP-adjusted residuals


5   Results are calculated in terms of a purchasing power standard (PPS) which is an artificial currency that eliminates the effects of exchange rates on national currency levels. Back

6   Nomenclature of Statistical Territorial Units. Back

7   City-States were weighted by a factor of 1.35 (compared to 1.0 for other States), and special dispensation was given to those States which included harbours. Back

8   One of these Trentino-Alto Adige divides into two Provinces, each with its own special statutes. Back

9   The Spanish Senate is designated as the Chamber of Territorial Representation, and oversees the governmental structures which determine the balance between the centre and the Regions. See http://www.senado.es/caract_territ/text_caract_territ_i.html for an overview. Back

10   This estimates the "effective cost" of service provision in each of the regions, in order to reflect direct costs (regional expenditure on personnel and purchasing goods and services), indirect costs (imputed share of central expenditures on "devolved" services), and investment costs (reflecting capital requirements) (Vinuela 2000: 8). Back

11   An indicator of the regional capability for revenue raising. Back

12   Weights varied according to the type of function, with different weights given to Educational functions, where population was given a much higher weighting. Back

 
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