Though one can demonstrate that there are direct links between the federal fiscal constitution, as a constraining element for choosing fiscal policy instruments, the effectiveness and efficiency of fiscal policies depends very much on how political power is distributed within the federal arena and how actors use this power. A system of overlapping taxes for example may cause no problems for the federal government if it can resort to unilateral strategies that overcome potential resistance by subgovernments or if policies can be such coordinated that the use of fiscal policy instruments can be optimised. The decision-making structures of the federal arena and the mode of interaction determine in each country to what extent fiscal policies can be effective and efficient. In this paragraph, we will investigate into this problem by discussing two variables: the federal government’s capacity to act and the concertation potential available in the federal arena (see chapter 1). We will discuss each country in turn before we will summarise the configurations in a comparative table.