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Decentralization and Regional Government Size: an Application to the Spanish Case

  • Patricio Perez

    (University of Cantabria)

  • David Cantarero

    ()

    (University of Cantabria)

Registered author(s):

    This paper studies the impact of decentralization on the size of regional governments in Spain controlling for economies of scale, interregional heterogeneity and institutional framework, and successfully tests some implications of the model. Firstly, it supports the classic public goods theory of a trade-off-between the economic benefits of size and the costs of heterogeneity. Secondly, it rejects the “Leviathan” hypothesis because of vertical power imbalance and lack of fiscal competition among regions. Thirdly, the paper argues that government size is mediated by financial resources obtained through intergovernmental grants, consistent with welfare economics and positive economic politics.

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    File URL: http://icepp.gsu.edu/files/2015/03/ispwp1032.pdf
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    Paper provided by International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University in its series International Center for Public Policy Working Paper Series, at AYSPS, GSU with number paper1032.

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    Length: 28 pages
    Date of creation: 01 Nov 2010
    Date of revision:
    Handle: RePEc:ays:ispwps:paper1032
    Contact details of provider: Phone: 404-413-0235
    Fax: 404-413-0244
    Web page: http://aysps.gsu.edu/isp/index.html

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    1. Angel de la Fuente & Rafael Donénech, 2000. "Human Capital in Growth Regressions: How much Difference Does Data Quality Make?," OECD Economics Department Working Papers 262, OECD Publishing.
    2. Josep Lluís Carrion-i-Silvestre & Marta Espasa & Toni Mora, 2008. "Fiscal Decentralization and Economic Growth in Spain," Public Finance Review, , vol. 36(2), pages 194-218, March.
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