Decentralization and spatial distribution of regional economic activity: does equalization matter?

• Autores: Santiago Lago Peñas, Diego Martínez López
• Localización: Papeles de trabajo del Instituto de Estudios Fiscales. Serie economía, ISSN 1578-0252, Nº 28, 2008, págs. 3-20
• Idioma: inglés
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• Resumen

  • This paper investigates the effect of fiscal equalization on the spatial distribution of public activities and, therefore, on regional disparities in per capita GVA. With this aim, we use a simple theoretical model which is tested using data for the Spanish regions over the period 1986-2006. Our results show that a decentralized scenario with full equalization implies less differences across regions in per capita GVA and a more important share of public spending (production) on it in poorest territories, in comparison with a case in which decentralization is not accompanied by full fiscal equalization.