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Author Info

  • Peter Claeys

    ()
    (Faculty of Economics, University of Barcelona)

Abstract

Devolution of political power is constantly on the political agenda in both Italy and Spain. Fiscal policy in these countries has granted specific privileges to some regions. Valle d’Aosta/Vallée d’Aoste (VdA) and País Vasco/Euskadi (PV) have an extensive say over spending decisions, and receive nearly all regional tax revenues. Although both VdA and PV are among the richest regions in each country, both are net beneficiaries of the fiscal equalisation system. This preferential treatment is the outcome of a fiscal system with limits on taxing power and debt issuance, and is meant as a compensation for the lack of autonomy. It so prevents calls for more fiscal autonomy, or even outright secession. The economic effects of this asymmetric federalism are negative. Although partial equalisation reduces excessive redistribution built in the fiscal equalisation system, more autonomy could pay off with more efficient government. Asymmetric federalism moreover creates a political impasse in the negotiation of a more efficient tax system and financing arrangement.

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File URL: http://www.ub.edu/irea/working_papers/2011/201101.pdf
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Bibliographic Info

Paper provided by University of Barcelona, Research Institute of Applied Economics in its series IREA Working Papers with number 201101.

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Length: 37pages
Date of creation: Feb 2011
Date of revision: Feb 2011
Handle: RePEc:ira:wpaper:201101

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Postal: Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona
Web page: http://www.ub.edu/irea/
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Related research

Keywords: fiscal federalism; equalisation; secession; Valle d’Aosta; País Vasco. JEL classification:H70; H73; H77;

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References

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  1. Jorge Martinez-Vazquez & Robert McNab, 2001. "Fiscal Decentralization and Economic Growth," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0101, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  2. Hansjörg Blöchliger & Olaf Merk & Claire Charbit & Lee Mizell, 2007. "Fiscal Equalisation in OECD Countries," OECD Working Papers on Fiscal Federalism 4, OECD Publishing.
  3. Teresa Garcia-Milà & Therese J. McGuire, 2002. "Fiscal decentralization in Spain: An asymmetric transition to democracy," Economics Working Papers 866, Department of Economics and Business, Universitat Pompeu Fabra.
  4. A Rodr�guez-Pose, 1996. "Growth and institutional change: the influence of the Spanish regionalisation process on economic performance," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 14(1), pages 71-87, February.
  5. Teresa Garcia-Milà & Timothy J. Goodspeed & Therese J. McGuire, 2001. "Fiscal decentralization policies and sub-national government debt in evolving federations," Economics Working Papers 549, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2002.
  6. Raul Ramos & Jordi Suriñach & Manuel Artís, 2009. "La efectividad de las políticas activas de mercado de trabajo para luchar contra el paro. La experiencia de Cataluña," IREA Working Papers 200919, University of Barcelona, Research Institute of Applied Economics, revised Oct 2009.
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Citations

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Cited by:
  1. Juan Luis Jiménez & Jordi Perdiguero & Ancor Suárez, 2011. "Debating as a classroom tool for adapting learning outcomes to the European higher education area," IREA Working Papers 201109, University of Barcelona, Research Institute of Applied Economics, revised Jun 2011.
  2. Michael J. Artis & Ernest Miguélez & Rosina Morenos, 2011. "Assessing agglomeration economies in a spatial framework with endogenous regressors," IREA Working Papers 201112, University of Barcelona, Research Institute of Applied Economics, revised Jul 2011.
  3. Javier Campos & Juan Luis Jiménez & Ancor Suárez-Alemán, 2012. "“Not always sunny in paradise: prices and brand diversity in touristic areas supermarkets”," IREA Working Papers 201211, University of Barcelona, Research Institute of Applied Economics, revised May 2012.
  4. Xavier Fageda & Marta Gonzalez-Aregall, 2012. "“Regulation of Port Charges in Spain: Global versus Local Competition”," IREA Working Papers 201217, University of Barcelona, Research Institute of Applied Economics, revised Oct 2012.
  5. Juan Luis Jiménez & Carmen García, 2012. "“Corruption and local politics: does it pay to be a crook?”," IREA Working Papers 201212, University of Barcelona, Research Institute of Applied Economics, revised Jun 2012.
  6. Peter Claeys & Luis Costa, 2012. "“A Note on the Relationship Between the Cyclicality of Markups and Fiscal Policy”," IREA Working Papers 201215, University of Barcelona, Research Institute of Applied Economics, revised Sep 2012.
  7. Erika Badillo & Rosina Moreno, 2012. "“What Drives the Choice of Partners in R&D Cooperation? Heterogeneity across Sectors”," IREA Working Papers 201213, University of Barcelona, Research Institute of Applied Economics, revised Jul 2012.
  8. María Lorena Marí del Cristo & Marta Gómez-Puig, 2012. "“Pass-through in dollarized countries: should Ecuador abandon the U.S. Dollar?”," IREA Working Papers 201216, University of Barcelona, Research Institute of Applied Economics, revised Oct 2012.
  9. Esther Goya & Esther Vayá & Jordi Suriñach, 2012. "“Do intra- and inter-industry spillovers matter? CDM model estimates for Spain”," IREA Working Papers 201214, University of Barcelona, Research Institute of Applied Economics, revised Sep 2012.

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