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Regional Taxing and Spending: The Search for Balance

  • R. Ross Mackay
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    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.

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    Article provided by Taylor & Francis Journals in its journal Regional Studies.

    Volume (Year): 35 (2001)
    Issue (Month): 6 ()
    Pages: 563-575

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    Handle: RePEc:taf:regstd:v:35:y:2001:i:6:p:563-575
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    1. A. D. Scott, 1952. "Federal Grants and Resource Allocation," Journal of Political Economy, University of Chicago Press, vol. 60, pages 534.
    2. 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 114-30, June.
    3. 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.
    4. James M. Buchanan, 1952. "Federal Grants and Resource Allocation," Journal of Political Economy, University of Chicago Press, vol. 60, pages 208.
    5. Musgrave, Richard A, 1997. "Reconsidering the Fiscal Role of Government," American Economic Review, American Economic Association, vol. 87(2), pages 156-59, May.
    6. 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.
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