Fiscal rules vs. political culture as determinants of soft budget spending behaviors

The main purpose of this paper is to investigate whether, and to which extent, the rules introduced by central governments effectively restrain the spending behaviour of the decentralized authorities. In this paper, the authors provide an innovative comparative analysis by considering two countries that share the same degree of economic development and many cultural traits - France and Italy. Yet, these two countries differ in one crucial respect. France has a tradition of strong centralization,