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Getting the Most Out of Public Sector Decentralisation in Spain

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  • Isabelle Joumard
  • Claude Giorno

Abstract

In about two decades, Spain was transformed from one of the most centralised countries to one of the most decentralised. Spending functions were devolved rapidly. The regions have exercised their discretionary powers quite extensively and innovative policies have been implemented. But devolution was also accompanied by a hike in public employment and pressures on public spending, reflecting duplication in resources and poor co-ordination across and between government levels. The recent devolution of taxing powers could raise the accountability of the regions and, thus, cost-consciousness, although their effective use has been limited. Securing fiscal discipline would require better information on sub-national governments’ policies and outcomes so as to allow citizens to press for improved performance. The financing system of the regions also needs to be reformed to ensure sustainability in the face of changing demographics, while the fiscal rules need to be upgraded to avoid recourse to off-budget operations. This Working Paper relates to the 2005 OECD Economic Survey of Spain (www.oecd.org/eco/surveys/spain). Optimiser l'impact de la décentralisation en Espagne En l’espace de deux décennies, l’Espagne, qui était l’un des pays les plus centralisés, est devenue l’un des plus décentralisés. Les compétences en matière de dépenses ont été transférées rapidement. Les régions ont souvent été innovantes, adaptant leur offre de services publiques aux préférences locales. Toutefois, ces transferts se sont aussi accompagnés d’une hausse de l’emploi public et de pressions sur les dépenses publiques, ce qui reflète une duplication des ressources et un manque de coordination à chaque niveau d’administration et entre les différents niveaux. Le récent transfert de pouvoirs fiscaux aux régions pourrait renforcer leur responsabilité, et donc leur souci de maîtriser les coûts, bien qu’elles n’aient que peu utilisé ces pouvoirs. Assurer la discipline budgétaire nécessiterait une information plus complète sur les politiques et les résultats des administrations territoriales afin que les citoyens puissent réclamer une amélioration des performances. Il faut aussi réformer le système de financement des régions pour en assurer la viabilité face aux changements démographiques, tandis que les règles budgétaires devraient être ajustées de façon à éviter le recours aux opérations extrabudgétaires. Ce Document de travail se rapporte à l'Etude économique de l'OCDE de l’Espagne, 2005 (www.oecd.org/eco/etudes/espagne).

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 436.

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Date of creation: 21 Jul 2005
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Handle: RePEc:oec:ecoaaa:436-en

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Keywords: fiscal discipline; sub-national government; Spain; fiscal federalism; fiscal rules; intergovernmental grants; Espagne; règles budgétaires; discipline budgétaire; fédéralisme financier; collectivités territoriales; transferts intergouvernementaux;

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Cited by:
  1. Julio López Laborda & Jorge Martinez-Vazquez & Carlos Monasterio Escudero, 2006. "The Practice of Fiscal Federalism in Spain," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0623, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  2. Julio López Laborda & Carlos Monasterio Escudero, 2006. "Regional Decentralization in Spain: Vertical Imbalances and Revenue Assignments," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0610, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  3. Izabela Karpowicz, 2012. "Narrowing Vertical Fiscal Imbalances in Four European Countries," IMF Working Papers 12/91, International Monetary Fund.
  4. Luca Gandullia, 2012. "The role of direct taxes in fiscal decentralization," DEP - series of economic working papers 6/2012, University of Genoa, Research Doctorate in Public Economics.

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