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Efficiency and elusion: both sides of public enterprises in Spain

Author

Listed:
  • Roberto Fernández Llera

    (Universidad de Oviedo)

  • María A. García Valiñas

    (Toulouse School of Economics INRA (LERNA))

Abstract

The main objective of this research consists on analyzing regional public sector enterprises (PSEs) in Spain. We describe a general view on Spanish Autonomous Communities (ACs) financial resources, in the context of the Stability and Growth Pact and Budgetary Stability Act. From 2002, such regulation imposes several constraints to ACs’ indebtness. In this paper, we find out about the roll of PSEs as an alternative way to traditional debt mechanisms. Thus, according to Eurostat criteria, PSEs’ debt can be taken off the public sector’s consolidated budget. Descriptive and econometric results confirm our expectations. ACs’ have used public enterprises to avoid the stringent financial rules. Additionally, it seems that low productivity ACs are accumulating more public debt outside the scope of consolidation. The paper concludes with some recommendations and policy implications.

Suggested Citation

  • Roberto Fernández Llera & María A. García Valiñas, 2010. "Efficiency and elusion: both sides of public enterprises in Spain," Working Papers 2010/5, Institut d'Economia de Barcelona (IEB).
    • Handle: RePEc:ieb:wpaper:doc2010-5
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    More about this item

    Keywords

    deficit; debt; public sector enterprises; regional governments; Spain;
    All these keywords.

    JEL classification:

    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises

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