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Do interregional transfers improve the economic performance of poor regions? The case of Spain

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Abstract

The 17 regional governments of Spain receive grants from both the central government and the European Union. The grants are generally redistributive and are intended to stimulate economic activity in the poorer regions. We evaluate the effectiveness of the grants by comparing the economic performance of the regions before and after the implementation of the grant programs using a differences--in-- differences approach. We find that these policies have not been effective at stimulating private investment or improving the overall economies of the poorer regions.

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  • Teresa Garcia-Milà & Therese J. McGuire, 1996. "Do interregional transfers improve the economic performance of poor regions? The case of Spain," Economics Working Papers 207, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:207
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    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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