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On the Political Determinants of Intergovernmental Grants in Decentralized Countries: The Case of Spain

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  • Pablo Simon-Cosano
  • Santiago Lago-Peñas
  • Alberto Vaquero

Abstract

This article examines the effect of political variables on the gains obtained by Spanish regions in periodical bargaining of the intergovernmental financing agreements and on the regional distribution of discretional earmarked grants. First, we find that the relationship between gains in transferred revenues and on regional public debt stocks depends on the period and the specific issues discussed in the corresponding negotiation. Second, we show that the most discretional program of earmarked grants is strongly driven by electoral strategy. National incumbents tend to allocate intergovernmental transfers where there are competitive regional elections. We also show that earmarked grants are allocated in those regions where the incumbent performs better in national elections and, especially, in those where there are more seats to be won. Copyright 2014, Oxford University Press.

Suggested Citation

  • Pablo Simon-Cosano & Santiago Lago-Peñas & Alberto Vaquero, 2014. "On the Political Determinants of Intergovernmental Grants in Decentralized Countries: The Case of Spain," Publius: The Journal of Federalism, CSF Associates Inc., vol. 44(1), pages 135-156, January.
    • Handle: RePEc:oup:publus:v:44:y:2014:i:1:p:135-156
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    File URL: http://hdl.handle.net/10.1093/publius/pjt015
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    Cited by:

    1. Mar Delgado-Téllez & Javier J. Pérez, 2020. "Institutional and Economic Determinants of Regional Public Debt in Spain," Public Finance Review, , vol. 48(2), pages 212-249, March.
    2. Daniel Aparicio-Pérez & Maria Teresa Balaguer-Coll & Emili Tortosa-Ausina, 2021. "Politics against Economics: The Case of Spanish Regional Financing," Working Papers 2021/15, Economics Department, Universitat Jaume I, Castellón (Spain).
    3. Ferid Belhaj & Roberta Gatti & Daniel Lederman & Ernest John Sergenti & Hoda Assem & Rana Lotfi & Mennatallah Emam Mousa & Hoda Assem, "undated". "A New State of Mind [Un Nouvel État D’Esprit]," World Bank Publications - Reports 38065, The World Bank Group.
    4. Santiago Lago-Peñas & Agnese Sacchi & Pablo Simon-Cosano, 2014. "Who honor the rules of federalism? Party system nationalization and fiscal performance," Working Papers. Collection A: Public economics, governance and decentralization 1409, Universidade de Vigo, GEN - Governance and Economics research Network.
    5. Javier J. Pérez & Rocío Prieto, 2015. "Risk Factors and the Maturity of Subnational Debt," Public Finance Review, , vol. 43(6), pages 786-815, November.
    6. Maria del Mar Delgado & Pablo Hernandez de Cos & Javier J. Pérez, 2017. "Institutional and economic determinants of Sub-national public debt in Spain," EcoMod2017 10518, EcoMod.
    7. Kayode Taiwo & Linda G. Veiga, 2020. "Is there an “invisible hand” in the formula-based intergovernmental transfers in Nigeria?," NIPE Working Papers 02/2020, NIPE - Universidade do Minho.
    8. Salvador Barrios & Diego Martínez-López, 2017. "Fiscal equalization schemes and subcentral government borrowing," Chapters, in: Naoyuki Yoshino & Peter J. Morgan (ed.), Central and Local Government Relations in Asia, chapter 4, pages 130-160, Edward Elgar Publishing.
    9. Eduardo Bandrés & Alain Cuenca, 2016. "Las reformas de la financiación autonómica: elementos para una aproximación desde la economía política," Revista de Estudios Regionales, Universidades Públicas de Andalucía, vol. 1, pages 165-194.
    10. Silvia Fresneda & Nuria Reguera & Fernando Casas, 2021. "De-agentification Process in Spanish Regional Governments," Hacienda Pública Española / Review of Public Economics, IEF, vol. 236(1), pages 39-64, March.
    11. Barbara Nyambura Wambui & Prof Charles M. Rambo & Professor T. Maitho, 2024. "Moderating Influence of Government Water Policy on the Relationship between PM&E Approach and Implementation of Water Projects in Machakos County of Kenya," International Journal of Project Management, AJPO Journals Limited, vol. 6(1), pages 19-38.
    12. Andrés Rodríguez-Pose & Yannis Psycharis & Vassilis Tselios, 2016. "Politics and Investment: Examining the Territorial Allocation of Public Investment in Greece," Regional Studies, Taylor & Francis Journals, vol. 50(7), pages 1097-1112, July.

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