IDEAS home Printed from https://ideas.repec.org/a/ris/invreg/0342.html
   My bibliography  Save this article

The uneasy coexistence of the Spanish foral and common regional finance systems

Author

Listed:
  • Zabalza, Antoni

    () (University of Valencia)

  • López-Laborda, Julio

    () (University of Zaragoza)

Abstract

This paper develops a model which integrates the foral or cupo system applied to the Basque Country and Navarre, the common system applied to the other fifteen Spanish autonomous communities and the central government budget. The model shows that the theoretical cupo it generates is nothing more than an indirect form of measuring the equalising transfer between the central government and the corresponding autonomous jurisdiction. The cupo form per se is completely neutral: the foral jurisdictions operate exactly under the same financial conditions as the non-foral jurisdictions, despite that in the latter case the transfer is directly measured as the difference between expenditure needs and fiscal capacity. In the context of our model, the cause of the foral economic advantage is the particular imputation procedure developed by the cupo law, which clearly biases the scales in favour of the foral and, therefore, against the non-foral communities. An economic advantage of the foral respect to the aggregate of the non-foral communities that, even if only referred to the design of the cupo, we have estimated at 29.8% in the case of the Basque Country and at 28.2% in the case on Navarre. These calculations should be interpreted as a lower bound on the foral advantage. The model has clear implications for reform.

Suggested Citation

  • Zabalza, Antoni & López-Laborda, Julio, 2017. "The uneasy coexistence of the Spanish foral and common regional finance systems," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 37, pages 119-152.
  • Handle: RePEc:ris:invreg:0342
    as

    Download full text from publisher

    File URL: http://www.aecr.org/images/ImatgesArticles/2017/6/06_ZABALZA.pdf
    File Function: Full text
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Antoni Zabalza & Julio López-Laborda, 2011. "The new Spanish system of intergovernmental transfers," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(6), pages 750-786, December.
    2. Antoni Zabalza, 2012. "Una nota sobre el ajuste del IVA en el sistema foral de financiación: Marco analítico y propuesta de un nuevo mecanismo," Hacienda Pública Española, IEF, vol. 202(3), pages 105-123, September.
    3. Carlos Monasterio Escudero, 2010. "Federalismo fiscal y sistema foral. ¿Un concierto desafinado?," Hacienda Pública Española, IEF, vol. 192(1), pages 59-103, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    regional finance; Spain; foral system; common system;

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:invreg:0342. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julieta Llungo-Ortíz). General contact details of provider: http://edirc.repec.org/data/aecrrea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.