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Regional Taxing and Spending: The Search for Balance


  • R. Ross Mackay


The financial settlement has been described as the key to devolution. Public spending above tax in Scotland and Wales has been criticized. Public spending is above tax in seven UK regions, including four English regions. If we treat equal citizens equally, public spending will be above tax in poorer regions. There is nothing extraordinary about spending above tax, but there are important questions with regard to regional levels of expenditure. In four regions (London, South East, Scotland and Northern Ireland) public expenditure is well above the level expected for their degree of prosperity. This article provides possible explanations.

Suggested Citation

  • R. Ross Mackay, 2001. "Regional Taxing and Spending: The Search for Balance," Regional Studies, Taylor & Francis Journals, vol. 35(6), pages 563-575.
  • Handle: RePEc:taf:regstd:v:35:y:2001:i:6:p:563-575 DOI: 10.1080/00343400120065723

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    References listed on IDEAS

    1. Short, John, 1984. "Public Finance and Devolution: Money Flows between Government and Regions in the United Kingdom," Scottish Journal of Political Economy, Scottish Economic Society, vol. 31(2), pages 114-130, June.
    2. J Wiseman, 1987. "The political economy of federalism: a critical appraisal," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 5(4), pages 383-410, August.
    3. J Wiseman, 1987. "The Political Economy of Federalism: A Critical Appraisal," Environment and Planning C, , vol. 5(4), pages 383-410, December.
    4. A. D. Scott, 1952. "Federal Grants and Resource Allocation," Journal of Political Economy, University of Chicago Press, vol. 60, pages 534-534.
    5. James M. Buchanan, 1952. "Federal Grants and Resource Allocation," Journal of Political Economy, University of Chicago Press, vol. 60, pages 208-208.
    6. R. Ross Mackay & Philip Molyneux, 1996. "Bank Credit and the Regions: A Comparison within Europe," Regional Studies, Taylor & Francis Journals, vol. 30(8), pages 757-763.
    7. Musgrave, Richard A, 1997. "Reconsidering the Fiscal Role of Government," American Economic Review, American Economic Association, vol. 87(2), pages 156-159, May.
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    Cited by:

    1. Edgar Morgenroth, 2007. "The Regional Dimension of Taxes and Public Expenditure in Ireland," Papers WP195, Economic and Social Research Institute (ESRI).
    2. Cristiano Cantore & Paul Levine & Giovanni Melina, 2014. "A Fiscal Stimulus and Jobless Recovery," Scandinavian Journal of Economics, Wiley Blackwell, vol. 116(3), pages 669-701, July.
    3. Cristiano Cantore & Paul Levine & Giovanni Melina, 2014. "Deep versus superficial habit: It’s all in the persistence," School of Economics Discussion Papers 0714, School of Economics, University of Surrey.
    4. David Heald & John Short, 2002. "The Regional Dimension of Public Expenditure in England," Regional Studies, Taylor & Francis Journals, vol. 36(7), pages 743-755.
    5. repec:ura:ecregj:v:1:y:2017:i:4:p:1304-1313 is not listed on IDEAS
    6. Peter Gripaios, 2002. "Regional Spending: A Comment on MacKay," Regional Studies, Taylor & Francis Journals, vol. 36(6), pages 685-689.
    7. David Pickernell & Mark Mcgovern, 2002. "Begging Bowl Meets Baseball Bat? Lessons for the UK from the Australian Fiscal Model," Regional Studies, Taylor & Francis Journals, vol. 36(6), pages 703-707.
    8. Peter Gripaios & Paul Bishop, 2005. "Spatial inequalities in UK GDP per head: The role of private and public services," The Service Industries Journal, Taylor & Francis Journals, vol. 25(8), pages 945-958, December.
    9. Giovanni Melina & Stefania Villa, 2014. "Fiscal Policy And Lending Relationships," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 696-712, April.
    10. Sandberg Hanssen, Thor-Erik & Jørgensen, Finn, 2015. "Transportation policy and road investments," Transport Policy, Elsevier, vol. 40(C), pages 49-57.
    11. Tsekeris, Theodore, 2014. "Multi-sectoral interdependencies of regional public infrastructure investments," Socio-Economic Planning Sciences, Elsevier, vol. 48(4), pages 263-272.
    12. Yannis Psycharis, 2008. "Public Spending Patterns: the regional allocation of public investment in Greece by political period," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 14, Hellenic Observatory, LSE.
    13. Peter Gripaios, 2002. "The Failure of Regeneration Policy in Britain," Regional Studies, Taylor & Francis Journals, vol. 36(5), pages 568-577.


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