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Getting the Most Out of Public Sector Decentralisation in Spain

Author

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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).

Suggested Citation

  • Isabelle Joumard & Claude Giorno, 2005. "Getting the Most Out of Public Sector Decentralisation in Spain," OECD Economics Department Working Papers 436, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:436-en
    DOI: 10.1787/838564110008
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    Citations

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    Cited by:

    1. Veronica Grembi & Alvaro Manoel, 2012. "Fiscal rules for subnational governments? Evidence from Latin America," Chapters, in: Giorgio Brosio & Juan P. Jiménez (ed.), Decentralization and Reform in Latin America, chapter 12, pages iii-iii, Edward Elgar Publishing.
    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. 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.
    4. Ms. Izabela Karpowicz, 2012. "Narrowing Vertical Fiscal Imbalances in Four European Countries," IMF Working Papers 2012/091, International Monetary Fund.
    5. Kendall D. Funk & Erica Owen, 2020. "Consequences of an Anti‐Corruption Experiment for Local Government Performance in Brazil," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(2), pages 444-468, March.
    6. Diane Charlton & J. Edward Taylor, 2020. "Rural school access and the agricultural transformation," Agricultural Economics, International Association of Agricultural Economists, vol. 51(5), pages 641-654, September.
    7. Cinthya Caamal Olvera., 2007. "Oferta Laboral en México: un enfoque de variables instrumentales," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 115-154, May.
    8. 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.
    9. Ichiro Aoki, 2008. "Decentralization and Intergovernmental Finance in Japan," Finance Working Papers 23074, East Asian Bureau of Economic Research.
    10. Brieuc Monfort, 2015. "Can Increased Public Expenditure Efficiency Contribute to the Consolidation of Public Finances in Japan?," Working Papers halshs-01548620, HAL.

    More about this item

    Keywords

    collectivités territoriales; discipline budgétaire; Espagne; fiscal discipline; fiscal federalism; fiscal rules; fédéralisme financier; intergovernmental grants; règles budgétaires; Spain; sub-national government; transferts intergouvernementaux;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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