GOLD Report I - UCLG

165whatever the differences in legal status.This is the consequence of the extension oflocal government functions and of correlativeincrease of their budgets. Local selfgovernmentis not the Asterix’ village; thisis a relative notion that has to be builtthrough a network of relations, resultingitself from the functions and powers assignedby the law.By contrast, local government systemsare not converging. They further differentiateregarding the forms of regionalizationand the role of the intermediatelevel of local government. Countries withlarge municipal units further contrastwith countries with small municipalunits. The understanding of central-localrelationships is still marked by historicalfactors, reflected in local governmentfunctions. Only history can explain thatin some countries a function is consideredlocal whereas in others it is consideredas national. Local finance systemsare marked by the structure of nationaltax systems; it derives from this that thefinancing of local government budgets beled by transfers and tax shares or by owntax revenues. Local institutions furtherdifferentiate markedly between countrieswith traditions of representative democracyand countries with participativetraditions. In Central and Eastern Europe,and even more in South-East Europe,the burden of the transition is still there;local government is indeed only one piecein the state-building process. Nevertheless,differences do not impede cooperation orexchanges of experience.Lastly, if decentralization contributes tothe development of political democracy,it would be an illusion to think that theconfidence crisis reflected in the lowerrates of participation in local electionsbe solved by decentralizing more. Localgovernment is part of a whole. Localgovernment may suffer a loss of senseof politics at the national level that cannotbe ascribed to it. But it can demonstratethat it can contribute to give itsense again.