Fiscal Federalism, European Stability Pact, and Municipal Investment Finance

A Microdata Analysis of Spanish Municipalities

Bibliographic Data

ID7996198
AuthorsJaime Vallés Giménez (0000-0002-2542-4956), J Valles, Anabel Zárate
Year2006
Volume37
Issue1
Pages68-102
Publication date2006-10-10
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenuePublius The Journal of Federalism (JOURNAL)
Journal identifiersISSN: 0048-5950 • E-ISSN: 1747-7107
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1093/publius/pjl016
OpenAlexW2099822287
LanguageEN
Citations received4

In countries where subnational governments control a large part of the public finances, the central government's ability to keep its commitment to the European Union's Stability and Growth Pact can be a difficult matter. European rules demand that the overall budget be balanced over the medium term; applying this rule at subcentral level may unduly reduce capital outlays and local budgetary autonomy. This article examines the possible impact of budgetary stability legislation on the capital expenditure of Spanish municipalities. The empirical findings suggest that the new budgetary stability framework will oblige municipalities to (i) limit their investments, (ii) raise the tax burden, or (iii) reduce the funds allocated to other budget items. We believe the Spanish municipal experience is generalizable to other federal countries in Europe that are facing hard budget constraints and high earmarked grants

Autonomy · Business · Decentralization · Economic policy · Economics · European union · fiscal federalism · International economics · Legislation · Macroeconomics · Market economy · Member states · Microdata (statistics · Political science · Public economics · Public finance · Stability and Growth Pact · Fiscal Policies and Political Economy · Fiscal Policy and Economic Growth · Local Government Finance and Decentralization · Finance

Tools

Open DOISci-Hub