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Central Government Transfers and Regional Convergence in Portugal

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Marta Ferreira Dias ()
Ricardo Silva ()

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Abstract

Over the last decades, the Portuguese economy exhibited an outstanding growth performance. This period of fast economic growth allowed the country to consistently reduce its income gap with respect to the EU average. In spite of this, regions in Portugal exhibited large differences between each other in terms of GDP per capita. Yet, the Portuguese government did make attempts at regional intervention by means of some policy instruments, namely public transfers to local (and regional) government. How successful these policies have been in terms of achieving their goal is still an open question, especially as far as Portuguese Central Government transfers are concerned. The main purpose of the paper is to evaluate if the system of Central Government transfers has affected the intra-regional Portuguese convergence. We haven’t found unquestionable evidence that these policies have been effective at stimulating convergence among Portuguese regions and at improving the overall economies of the poorer regions. Keywords: Regional convergence, Central Government transfers, Regional policy JEL Classification: H71; O18; R58

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa04p443.

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Date of creation: Aug 2004
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Handle: RePEc:wiw:wiwrsa:ersa04p443

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References listed on IDEAS
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  1. de la Fuente, Angel, 2002. "On the sources of convergence: A close look at the Spanish regions," European Economic Review, Elsevier, vol. 46(3), pages 569-599, March. [Downloadable!] (restricted)
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  2. Ali, Agha Iqbal & Lerme, Catherine S. & Nakosteen, Robert A., 1993. "Assessment of intergovernmental revenue transfers," Socio-Economic Planning Sciences, Elsevier, vol. 27(2), pages 109-118, June. [Downloadable!] (restricted)
  3. Jan Fagerberg & Bart Verspagen, 1996. "Heading for Divergence? Regional Growth in Europe Reconsidered," Journal of Common Market Studies, Blackwell Publishing, vol. 34(3), pages 431-448, 09. [Downloadable!] (restricted)
  4. Barro, R.J. & Sala-I-Martin, X., 1991. "Convergence," Papers 645, Yale - Economic Growth Center.
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  5. Carlino, Gerald A. & Mills, Leonard, 1996. "Testing neoclassical convergence in regional incomes and earnings," Regional Science and Urban Economics, Elsevier, vol. 26(6), pages 565-590, December. [Downloadable!] (restricted)
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  6. Juan Camilo Chaparro & Michael Smart & Juan Gonzola Zapata, 2004. "Intergovernmental Transfers and Municipal Finance in Colombia," International Tax Program Papers 0403, International Tax Program, Institute for International Business, Joseph L. Rotman School of Management, University of Toronto. [Downloadable!]
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  7. de la Fuente, Angel, 2002. "Is the Allocation of Public Capital Across the Spanish Regions too Redistributive?," CEPR Discussion Papers 3138, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  8. Bev Dahlby, 1996. "Fiscal externalities and the design of intergovernmental grants," International Tax and Public Finance, Springer, vol. 3(3), pages 397-412, July. [Downloadable!] (restricted)
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  1. Calin Arcalean & Gerhard Glomm & Ioana Schiopu, 2007. "Growth Effects of Spatial Redistribution Policies," Caepr Working Papers 2007-002, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington. [Downloadable!]
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