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This paper describes and discusses the division of tasks between Dutch central and local government and their financing in view of economic theory. The paper starts with an overview of the first and second generation theories of fiscal decentralisation. This theoretical perspective is used for analysing the history of Dutch fiscal decentralisation and the current tasks and financing of Dutch municipalities and provinces. What went wrong with the famous Dutch Republic of United Provinces, the first federal state in modern history? Should Dutch municipalities increase further in scale, like their counterparts in Denmark? Is the Dutch government right in wanting to abolish city-regions? Is there still a role for Dutch provinces in spatial planning?

Fiscal Decentralisation in the Netherlands: History, Current Practice and Economic Theory