Revenue Autonomy and Regional Growth: An Analysis of the 25-Year Process of Fiscal Decentralisation in Spain

Ramiro Gil-Serrate, Julio López-Laborda and Jesus Mur
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Julio López-Laborda: Departamento de Economía Aplicada, Universidad de Zaragoza, Gran Via 2, 50005 Zaragoza, Spain
Authors registered in the RePEc Author Service: Julio López-Laborda

Environment and Planning A, 2011, vol. 43, issue 11, 2626-2648

Abstract: By estimating bivariate panel vector autoregressions, this paper analyses the relationship between the revenue autonomy of Spanish regional governments and the regional growth experienced in Spain during the process of fiscal decentralisation from 1984 to 2008. The key finding is the presence of a significant, but marginal, positive effect of regional governments' revenue autonomy on regional growth during the period considered. The small size of the effect can be attributed to the fact that Spanish regional governments have not made extensive use of their important regulatory powers acquired in the 1996 review of the regional financing system or, alternatively, to the fact that the policy of increasing revenue autonomy might have reached saturation point during the period studied, with regard to its effect on economic growth. Both arguments are supported by the identification of an apparent breakpoint, in 1999, in the relationship between revenue autonomy and regional growth in Spain.

Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envira:v:43:y:2011:i:11:p:2626-2648

DOI: 10.1068/a43352

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