The division of functions between central and local governments is a question yet to be solved. Economies throughout the world, especially those of developing nations, are gradually decentralising by transferring government functions to lower levels. There is a growing need for a comprehensive analysis of how government functions should be divided. On the one hand, optimal division may vary between countries due to unique local circumstances. On the other hand, scientific research is not intended to discover a factual answer but rather an algorithm for evaluating functions regardless of such factors as a country’s size, system of government, and the like.
Subsidiarity is one of the most important principles applicable in the analysis of the functional division between central and local governments. According to the principle of subsidiarity, government functions should be performed at a lower level unless local government fails to cope with them and the performance of said functions at a higher level would be more efficient. It is thus essential to identify criteria for determining whether a certain function should be elevated to a higher level of government.
The principle of subsidiarity is oftentimes stipulated in national legislation. Yet, its implementation framework is not always clear. For example, the principle of subsidiarity is not explicitly defined in the Constitution of the Republic of Lithuania but derived from other constitutional principles and provisions. Notably, Lithuania’s system of government is supposed to build on the principle of subsidiarity. Yet, no criteria or system of monitoring and assessment are defined, so it is unclear whether the process is systematic and justified.
This paper is intended to elicit and substantiate criteria that should be used as a basis for the division of functions between the central government and local government (municipalities) according to the principle of subsidiarity.
Download full paper in pdf: Subsidiarity Discussion Paper LFMI_2016 07 14