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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

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Keywords: Intergovernmental grants Bailouts Fiscal federalism;

References

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Citations

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Cited by:
  1. Eichler, Stefan & Hofmann, Michael, 2013. "Sovereign default risk and decentralization: Evidence for emerging markets," European Journal of Political Economy, Elsevier, Elsevier, vol. 32(C), pages 113-134.
  2. Baskaran, T., 2009. "Fiscal decentralization, ideology, and the size of the public sector," MPRA Paper 30188, University Library of Munich, Germany.
  3. Baskaran, Thushyanthan, 2014. "Bailouts and austerity," Center for European, Governance and Economic Development Research Discussion Papers 212, University of Goettingen, Department of Economics.
  4. Baskaran, Thushyanthan, 2014. "The political economy of special needs transfers: Evidence from Bavarian municipalities, 1993-2011," Center for European, Governance and Economic Development Research Discussion Papers 211, University of Goettingen, Department of Economics.
  5. Thushyanthan Baskaran, 2013. "Do bailouts buy votes? Evidence from a panel of Hessian municipalities," Economics of Governance, Springer, Springer, vol. 14(3), pages 257-278, August.
  6. Rosella Levaggi & Francesco Menoncin, 2013. "Soft budget constraints in health care: evidence from Italy," The European Journal of Health Economics, Springer, Springer, vol. 14(5), pages 725-737, October.
  7. Padovano, Fabio, 2012. "The drivers of interregional policy choices: Evidence from Italy," European Journal of Political Economy, Elsevier, Elsevier, vol. 28(3), pages 324-340.

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