At the Origins of Expenditure Disparities Between French Departments: an Empirical Analysis (2006-2016)[Aux origines des disparités de dépenses des départements français : une analyse empirique (2006-2016)]

Starting from the observation that the levels of expenditure and of resources are very different from one French department to another, the aim of this article is to shed light on the origins of the disparities in the departments' expenditure in order to be able to question the effectiveness of equalization mechanisms intended to reduce them. For that purpose, we identify the explanatory variables of departmental expenditure and then we measure the contribution of each of them to the explanation of disparities in departmental expenditure. Based on data from the Directorate General of Local Authorities (DGCL), our study covers the period 2006-2016 and distinguishes in total expenditure, current expenditure from investment expenditure. We then show that the disparities in expenditure are explained above all by disparities in resources, whether these come from state endowments or taxes, which raises questions as to the role played by social expenditure often considered as the major factor explaining the behavior of departments' expenditures. In addition, our results allow clarifying the relative weight of the vertical and horizontal equalization mechanisms in explaining the disparities in expenditure of the departments while raising questions about their relative effectiveness.