Fiscal contracting between State and local authorities: the tale of two public spending schemes in France

Following the scholarship on austeritarian public finances, this article focuses on one of the latest instruments governing fiscal and financial relations between the State and local authorities in France, called the “Cahors contracts”. This tool, introduced in 2017 (and then suspended at the start of the pandemic in 2020), aims to limit the growth of operating expenditures through a contract signed between the State and some local authorities. While tracing the conception of this instrument within the central government and its negotiation with – and contestation by – local government associations, the article produces two main findings. First, it highlights the concrete ways in which a budget consolidation order is implemented and maintained across different levels of government, from the European Union to local authorities and central administrations. Second, it underlines how the controversies surrounding the instrument – its binding and a-territorial nature, the type of targeted expenditures – stem from the gap between two different conventions of public spending, opposing the State as guarantor of the consolidation order and local authorities