Subsidiarity is a principle which applies to the division of functions between different levels of government and society.
At the core of the principle of subsidiarity lies freedom of action of individuals, communities, municipalities, and other small entities which the central government can only intervene if the said entities fail to perform independently.
The principle of subsidiarity presupposes decentralization of government functions. The benefits of decentralization include better service provision due to a closer proximity to citizens and hence better access to information, increased likelihood of innovative solutions, lower monitoring costs, and a more stable system of government.
Depending on the level of autonomy of self-government, decentralization can be achieved by means of deconcentration, delegation, or devolution. To achieve better government accountability, the application of the subsidiarity rule should involve fiscal decentralization, including both spending and revenue generation, balancing the amount of money collected and expended by local government.
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 decentralizing 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.
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