Should large Spanish municipalities be financially compensated? Costs and benefits of being a capital/central municipality
AbstractThis paper analyse the costs and benefits of being a capital or central municipality, where central costs are understood to be incurred specifically as a result of the problems large municipalities located at the centre of an urban agglomeration face and capital costs are understood to result from the presence of regional and/or central government institutions in the municipality. However, these two qualities might also be beneficial to municipalities, resulting in a direct increase in their fiscal capacity. Here, by estimating an equation of the expenditure needs and the fiscal capacity of Spanish municipalities with more than 75,000 inhabitants, we find that the central costs incurred by large municipalities are offset by their greater fiscal capacity, but that the same is not true for municipalities that serve as political/administrative capitals.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2013/6.
Length: 29 pages
Date of creation: 2013
Date of revision:
Local financing; large municipalities; central and capital costs and benefits; expenditure needs; fiscal capacity;
Find related papers by JEL classification:
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ladd, Helen F. & Bradbury, Katharine L., 1988. "City Taxes and Property Tax Bases," National Tax Journal, National Tax Association, vol. 41(4), pages 503-23, December.
- Richard Hawkins & Matthew N. Murray, 2004. "Explaining Interjurisdictional Variations in Local Sales Tax Yield," Public Finance Review, , vol. 32(1), pages 82-104, January.
- Arthur Midwinter, 2002. "Territorial Resource Allocation in the UK: A Rejoinder on Needs Assessment," Regional Studies, Taylor & Francis Journals, vol. 36(5), pages 563-567.
- Iain McLean & Alistair McMillan, 2003. "The Distribution of Public Expenditure across the UK Regions," Fiscal Studies, Institute for Fiscal Studies, vol. 24(1), pages 45-71, March.
- Albert SolÃ©-OllÃ© & NÃºria Bosch, 2005. "On the Relationship between Authority Size and the Costs of Providing Local Services: Lessons for the Design of Intergovernmental Transfers in Spain," Public Finance Review, , vol. 33(3), pages 343-384, May.
- Brueckner, Jan K. & Thisse, Jacques-Francois & Zenou, Yves, 1999.
"Why is central Paris rich and downtown Detroit poor?: An amenity-based theory,"
European Economic Review,
Elsevier, vol. 43(1), pages 91-107, January.
- BRUECKNER, Jan K. & THISSE, Jacques-François & ZENOU, Yves, . "Why is central Paris rich and downtown Detroit poor? An amenity-based theory," CORE Discussion Papers RP -1370, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Brueckner, J.K. & Thisse, J.-F. & Zenou, Y., 1996. "Why is central Paris rich and downtown Detroit poor ? An amenity-based theory," CORE Discussion Papers 1996065, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Albert Solé Ollé, 2005.
"Expenditure spillovers and fiscal interactions: Empirical evidence from local governments in Spain,"
2005/3, Institut d'Economia de Barcelona (IEB).
- Sole-Olle, Albert, 2006. "Expenditure spillovers and fiscal interactions: Empirical evidence from local governments in Spain," Journal of Urban Economics, Elsevier, vol. 59(1), pages 32-53, January.
If references are entirely missing, you can add them using this form.