Evolving federations and regional public deficits: testing the bailout hypothesis in the Spanish case
High debt autonomy and low tax autonomy often characterize evolving federations, making the bailout hypothesis very attractive in resolving subcentral government deficits. However, meeting both conditions is not enough to conclude that bailout expectations are the main reason for a potential deficit. There are many other factors affecting expectations and the real behavior of the agents involved: central government, subcentral governments, and the financial markets. Empirical research is the only means by which to determine the relevance of the bailout problem in each situation. To demonstrate this argument, the author describes an exhaustive analysis of the Spanish case. The main conclusion is that deficit seems to be better understood by a more traditional model of fiscal choices than by bailout expectations.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Germà Bel & Antonio Miralles, 2010.
"Choosing between service fees and budget funding to pay for local services: empirical evidence from Spain,"
Environment and Planning C: Government and Policy,
Pion Ltd, London, vol. 28(1), pages 54-71, February.
- GermÃ Bel & Antonio Miralles, 2010. "Choosing between Service Fees and Budget Funding to Pay for Local Services: Empirical Evidence from Spain," Environment and Planning C, , vol. 28(1), pages 54-71, February.
- Ignacio Lago-PeÃ±as & Santiago Lago-PeÃ±as, 2010. "Decentralization and Electoral Accountability," Environment and Planning C, , vol. 28(2), pages 318-334, April.
- Ignacio Lago-Peñas & Santiago Lago-Peñas, 2010. "Decentralization and electoral accountability," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 28(2), pages 318-334, April.
- Benny Geys & Federico Revelli, 2011. "Economic and Political Foundations of Local Tax Structures: An Empirical Investigation of the Tax Mix of Flemish Municipalities," Environment and Planning C, , vol. 29(3), pages 410-427, June.
Benny Geys & Federico Revelli, 2011. "Economic and political foundations of local tax structures: an empirical investigation of the tax mix of Flemish municipalities," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 29(3), pages 410-427, June.
- Santiago Lago Peñas & Jorge Martínez Vázquez, 2010. "La descentralización tributaria en las Comunidades Autónomas de régimen común: un proceso inacabado," Hacienda Pública Española, IEF, vol. 192(1), pages 129-151, March. Full references (including those not matched with items on IDEAS)