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Central Government Transfers and Regional Convergence in Portugal

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  • Marta Ferreira Dias

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  • Ricardo Silva

    ()

Abstract

Over the last decades, the Portuguese economy exhibited an outstanding growth performance. This period of fast economic growth allowed the country to consistently reduce its income gap with respect to the EU average. In spite of this, regions in Portugal exhibited large differences between each other in terms of GDP per capita. Yet, the Portuguese government did make attempts at regional intervention by means of some policy instruments, namely public transfers to local (and regional) government. How successful these policies have been in terms of achieving their goal is still an open question, especially as far as Portuguese Central Government transfers are concerned. The main purpose of the paper is to evaluate if the system of Central Government transfers has affected the intra-regional Portuguese convergence. We havenÂ’t found unquestionable evidence that these policies have been effective at stimulating convergence among Portuguese regions and at improving the overall economies of the poorer regions. Keywords: Regional convergence, Central Government transfers, Regional policy JEL Classification: H71; O18; R58

Suggested Citation

  • Marta Ferreira Dias & Ricardo Silva, 2004. "Central Government Transfers and Regional Convergence in Portugal," ERSA conference papers ersa04p443, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa04p443
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    References listed on IDEAS

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    1. Ali, Agha Iqbal & Lerme, Catherine S. & Nakosteen, Robert A., 1993. "Assessment of intergovernmental revenue transfers," Socio-Economic Planning Sciences, Elsevier, vol. 27(2), pages 109-118, June.
    2. de la Fuente, Angel, 2002. "On the sources of convergence: A close look at the Spanish regions," European Economic Review, Elsevier, vol. 46(3), pages 569-599, March.
    3. Bev Dahlby, 1996. "Fiscal externalities and the design of intergovernmental grants," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 3(3), pages 397-412, July.
    4. Jan Fagerberg & Bart Verspagen, 1996. "Heading for Divergence? Regional Growth in Europe Reconsidered," Journal of Common Market Studies, Wiley Blackwell, vol. 34(3), pages 431-448, September.
    5. Carlino, Gerald A. & Mills, Leonard, 1996. "Testing neoclassical convergence in regional incomes and earnings," Regional Science and Urban Economics, Elsevier, vol. 26(6), pages 565-590, December.
    6. Fabio Sánchez Torres & Michael Smart & Juan Gonzalo Zapata Giraldo, 2002. "Intergovernmental transfers and municipal finance in Colombia," INFORMES DE INVESTIGACIÓN 002915, FEDESARROLLO.
    7. de la Fuente, Angel, 2002. "Is the Allocation of Public Capital Across the Spanish Regions too Redistributive?," CEPR Discussion Papers 3138, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Arcalean, Calin & Glomm, Gerhard & Schiopu, Ioana, 2012. "Growth effects of spatial redistribution policies," Journal of Economic Dynamics and Control, Elsevier, vol. 36(7), pages 988-1008.
    2. Luque, Carlos A. & Haddad, Eduardo A. & Lima, Gilberto T. & Sakurai, Sergio N. & Costa, Silvio M., 2011. "Impact assessment of interregional government transfers in Brazil: an input-output approach," MPRA Paper 31292, University Library of Munich, Germany.
    3. Adelaide Duarte & Marta Simões, 2010. "Regional growth in Portugal: assessing the contribution of earnings and education inequality," GEMF Working Papers 2010-11, GEMF, Faculty of Economics, University of Coimbra.
    4. Capello, Marcelo & Figueras, Alberto & Freille, Sebastian & Moncarz, Pedro, 2013. "The role of federal transfers in regional convergence in human development indicators in Argentina," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 27, pages 33-63.
    5. Meunier, Olivier & Mignolet , Michel & Mulquin, Marie-Eve, 2007. "Interpersonal transfers: Do they impact the growth of poor and rich European regions?," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 10, pages 155-170.

    More about this item

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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