1. The Role of Intergovernmental Finance in Achving Diversity and Cohesion: The Case of Spain
- Author
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Antoni Castells and Universitat de Barcelona
- Subjects
Federalism ,Public Administration ,Regional economics ,media_common.quotation_subject ,Geography, Planning and Development ,0211 other engineering and technologies ,0507 social and economic geography ,Public expenditure ,02 engineering and technology ,Management, Monitoring, Policy and Law ,Environmental Science (miscellaneous) ,Politics ,Tax revenue ,State (polity) ,Economics ,Distribució (Teoria econòmica) ,Distribution (Economic theory) ,media_common ,Finance ,Government ,Fiscal federalism, Regional Redistribution ,business.industry ,05 social sciences ,Política fiscal ,021107 urban & regional planning ,jel:H77 ,Federalisme ,Democracy ,Economia regional ,Central government ,Accountability ,jel:H7 ,Economic system ,business ,050703 geography ,Fiscal policy - Abstract
The democratic Constitution of 1978 established a decentralised state in Spain. Since that year, the Autonomous Communities (the intermediate level of government) have strongly increased their role and currently represent around 25% – 30% of total public expenditure. Therefore, financing autonomous government has become a crucial issue with important financial and political consequences. The present system is based mostly on grants from central government, while tax revenues and fiscal accountability are weak. The financing system can play an important, albeit complementary, role in ensuring cohesion within a decentralised state. On the one hand, it can achieve a certain level of equalisation in providing public services all over the territory. On the other hand, it can allow all regions to obtain an appropriate level of self-government. However, it is important to stress that territorial cohesion requires as a precondition, a political consensus and the acceptance of a common project among the different regions. Financial problems can certainly become political problems, but political problems can rarely be solved through financial measures alone. Therefore, we should not demand of intergovernmental finances what they cannot do.
- Published
- 2001