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Bailouts in a fiscal federal system: Evidence from Spain

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  • Sorribas-Navarro, Pilar

Abstract

This paper investigates bailouts in the fiscal federal system of Spain. An equation is estimated in which central government grants to regions depend on the regions' issue of debt. The data is for the period 1986-2006. The results reveal partial bailouts. This holds for discretionary and in-principle non-discretionary grants. Bailouts are greater or more likely when there are limits on the borrowing autonomy of a region, when the region is responsible for providing health care; and when the region has a high proportion of swing voters).

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Bibliographic Info

Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 27 (2011)
Issue (Month): 1 (March)
Pages: 154-170

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Handle: RePEc:eee:poleco:v:27:y:2011:i:1:p:154-170

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Web page: http://www.elsevier.com/locate/inca/505544

Related research

Keywords: Intergovernmental grants Bailouts Fiscal federalism;

References

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  19. Wiji Arulampalam & Sugato Dasgupta & Amrita Dhillon & Bhaskar Dutta, 2008. "Electoral goals and center-state transfers: A Theoretical model and empirical evidence from India," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 08-14, Indian Statistical Institute, New Delhi, India.
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Citations

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Cited by:
  1. Rosella Levaggi & Francesco Menoncin, 2013. "Soft budget constraints in health care: evidence from Italy," The European Journal of Health Economics, Springer, vol. 14(5), pages 725-737, October.
  2. Baskaran, Thushyanthan, 2013. "Do bailouts buy votes? Evidence from a panel of Hessian municipalities," MPRA Paper 48228, University Library of Munich, Germany.
  3. Baskaran, Thushyanthan, 2011. "Fiscal decentralization, ideology, and the size of the public sector," European Journal of Political Economy, Elsevier, vol. 27(3), pages 485-506, September.
  4. Eichler, Stefan & Hofmann, Michael, 2013. "Sovereign default risk and decentralization: Evidence for emerging markets," European Journal of Political Economy, Elsevier, vol. 32(C), pages 113-134.

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