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Do Interregional Transfers Improve the Economic Performance of Poor Regions? The Case of Spain

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  • Teresa Garcia-Milà

    ()

  • Therese McGuire

    ()

Abstract

The 17 regional governments of Spain receive grants from both the central government and the European Union. The grants are generally redistributive and are intended to stimulate economic activity in the poorer regions. We evaluate the effectiveness of the grants by comparing the economic performance of the regions before and after the implementation of the grant programs using a differences-in-differences approach. We find that these policies have not been effective at stimulating private investment or improving the overall economies of the poorer regions. Copyright Kluwer Academic Publishers 2001

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File URL: http://hdl.handle.net/10.1023/A:1011264107134
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Bibliographic Info

Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 8 (2001)
Issue (Month): 3 (May)
Pages: 281-296

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Handle: RePEc:kap:itaxpf:v:8:y:2001:i:3:p:281-296

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Web page: http://www.springerlink.com/link.asp?id=102915

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Keywords: regional grants and economic development;

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References

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  1. Robert J. Barro, 1991. "Government Spending in a Simple Model of Endogenous Growth," NBER Working Papers 2588, National Bureau of Economic Research, Inc.
  2. Sala-I-Martin, X. & Barro, R.J., 1991. "Public Finance in Models of Economic Growth," Papers 640, Yale - Economic Growth Center.
  3. Fabio Canova & Albert Marcet, 1995. "The poor stay poor: Non-convergence across countries and regions," Economics Working Papers 137, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 1999.
  4. Garcia-Mila, Teresa & McGuire, Therese J & Porter, Robert H, 1996. "The Effect of Public Capital in State-Level Production Functions Reconsidered," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 177-80, February.
  5. Ezequiel Uriel Jiménez & Francisco Pérez García & Matilde Mas Ivars & Joaquín Maudos Villarroya, 1993. "Capital Público Y Productividad De La Economía Espanola," Working Papers. Serie EC 1993-08, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  6. Holtz-Eakin, Douglas, 1994. "Public-Sector Capital and the Productivity Puzzle," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 12-21, February.
  7. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
  8. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
  9. Ezequiel Uriel Jiménez & Francisco Pérez García & Matilde Mas Ivars & Joaquín Maudos Villarroya, 1993. "Disparidades Regionales Y Convergencia En Las Cc.Aa. Españolas," Working Papers. Serie EC 1993-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  10. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-51, April.
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Cited by:
  1. Kappeler , Andreas & Solé-Ollé, Albert & Stephan, Andreas & Välilä, Timo, 2012. "Does fiscal decentralization foster regional investment in productive infrastructure?," Working Paper Series in Economics and Institutions of Innovation 273, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  2. Andrés Rodríguez-Pose & Katja Novak, 2011. "Learning processes and economic returns in European Cohesion policy," Working Papers 2011-17, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
  3. Gerson Javier Pérez V. & Peter Rowland, 2004. "Regional Economic Policies:Four Country Cases," BORRADORES DE ECONOMIA 003438, BANCO DE LA REPÚBLICA.
  4. Artelaris, Panagiotis & Arvanitidis, Paschalis & Petrakos, George, 2006. "Theoretical and Methodological Study on Dynamic Growth Regions and Factors Explaining their Growth Performance," Papers DYNREG02, Economic and Social Research Institute (ESRI).
  5. Juan David Barón & Gerson Javier pérez & Peter Rowland, 2004. "A Regional Economic Policy for Colombia," REVISTA DE ECONOMÍA DEL ROSARIO, UNIVERSIDAD DEL ROSARIO.
  6. Mohl, Philipp & Hagen, Tobias, 2008. "Does EU Cohesion Policy Promote Growth? Evidence from Regional Data and Alternative Econometric Approaches," ZEW Discussion Papers 08-086, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  7. Gabriele Tondl, 1999. "What Determined the Uneven Growth of Europe´s Southern Regions? An Empirical Study with Panel Data," Working Papers geewp04, Vienna University of Economics Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
  8. González-Val, Rafael & Lanaspa, Luis & Pueyo, Fernando, 2008. "Trade policies, concentration, growth and welfare," MPRA Paper 9730, University Library of Munich, Germany.
  9. Mohl, P. & Hagen, T., 2010. "Do EU structural funds promote regional growth? New evidence from various panel data approaches," Regional Science and Urban Economics, Elsevier, vol. 40(5), pages 353-365, September.
  10. Shankar, Raja & Shah, Anwar, 2009. "Lessons from European Union policies for regional development," Policy Research Working Paper Series 4977, The World Bank.
  11. Bergman, Malin, 2003. "Interregional Inequality and Robin Hood Politics," Working Paper Series in Economics and Finance 523, Stockholm School of Economics.
  12. Meunier, Olivier & Mignolet , Michel & Mulquin, Marie-Eve, 2007. "Interpersonal transfers: Do they impact the growth of poor and rich European regions?," Investigaciones Regionales, Asociación Española de Ciencia Regional, issue 10, pages 155-170.
  13. Joan Rosselló, 2003. "Regional redistribution and growth," Investigaciones Economicas, Fundación SEPI, vol. 27(2), pages 369-392, May.

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