Federalism does not always lead to regional competition and fiscal responsibility, as stated many times in the literature (Castles et al., 2005;Hayek, 1939;Wilensky, 1974). On the contrary, the impact of federal reforms on both public finances and economic outcomes depends largely on how federalism is implemented (Voigt & Blume, 2012) how decentralization is financed (Rodden & Eskeland, 2003).