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Measuring the Regional Incidence of Taxes and Public Expenditure: The Available Methodology and its Limitations

Author

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  • Antoni Zabalza

    (Universidad de Valencia)

Abstract

This article reviews the basic methodology used to estimate the regional incidence of taxes and public expenditure, which we call the fiscal incidence approach, and compares it with the cash flow approach, which measures tax revenues and expenditures in terms of the associated monetary cash flows. In this context, it considers critically the particular version of the cash flow approach used in Spain. The article also looks at the different ways in which economists have tried to decompose fiscal balances into a structural or distributive component and a cyclical component, and critically reviews present practices.

Suggested Citation

  • Antoni Zabalza, 2014. "Measuring the Regional Incidence of Taxes and Public Expenditure: The Available Methodology and its Limitations," Hacienda Pública Española / Review of Public Economics, IEF, vol. 209(2), pages 11-54, June.
    • Handle: RePEc:hpe:journl:y:2014:v:209:i:2:p:11-54
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    References listed on IDEAS

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    1. Núria Bosch & Marta Espasa & Albert Solé Ollé (ed.), 2010. "The Political Economy of Inter-Regional Fiscal Flows," Books, Edward Elgar Publishing, number 13466.
    2. N/A, 2010. "The UK economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 213(1), pages 3-3, July.
    3. Angel de la Fuente & Ramón Barberán & Enrique Uriel, 2014. "Informe sobre la dimensión territorial de la actuación de las Administraciones Públicas. Propuesta metodológica," UFAE and IAE Working Papers 945.14, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    4. Ruggles, Patricia & O'Higgins, Michael, 1981. "The Distribution of Public Expenditure among Households in the United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 27(2), pages 137-164, June.
    5. Michael O'Higgins & Patricia Ruggles, 1981. "The Distribution Of Public Expenditures And Taxes Among Households In The United Kingdom," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 27(3), pages 298-326, September.
    6. François Vaillancourt, 2010. "Inter-regional Fiscal Flows: Interpretation Issues," Chapters, in: Núria Bosch & Marta Espasa & Albert Solé Ollé (ed.), The Political Economy of Inter-Regional Fiscal Flows, chapter 3, Edward Elgar Publishing.
    7. Richard M. Bird, 2003. "Fiscal Flows, Fiscal Balance, and Fiscal Sustainability," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0302, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
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    Cited by:

    1. Juan S. Mora‐Sanguinetti & Rok Spruk, 2023. "Economic effects of recent experiences of federalism: Analysis of the regionalization process in Spain," Journal of Regional Science, Wiley Blackwell, vol. 63(1), pages 30-63, January.

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    More about this item

    Keywords

    Regional fiscal balances; tax and expenditure incidence; cyclical and structural effects;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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