shares to cover the vertical fiscal imbalance. Clearly, such financial weakness
is closely related to horizontal fiscal imbalances, which are connected, in
turn, to interregional imbalances in the level of economic development and
the tax bases.
When both notions are put in perspective, changes in the period
between 1993 and 2001 can be observed (see table 10.14). Indeed, an
increase in the level of financial autonomy of 2 percent can be seen, with a
parallel decrease in vertical imbalance. Even though the position of local
governments was best in 1995, the level in 2001 was satisfactory given the
systemic crisis environment in which it was reached.