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Institutional and Economic Determinants of Regional Public Debt in Spain

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  • Mar Delgado-Téllez
  • Javier J. Pérez

Abstract

We analyze from an empirical point of view the evolution and determinants of Spanish regional public debt. Spain offers an interesting case study because of its high level of fiscal decentralization, implemented gradually during the past four decades, the parallel entry into force of a number of national fiscal rules in that period, and the heterogeneity of its regions, both in terms of economic fundamentals and some institutional features. Our main findings are the following: (i) on average, over the sample of study, regional governments’ fiscal policies reacted to public debt increase; (ii) fiscal rules played a limited role in controlling debt surges; (iii) a higher degree of regional fiscal coresponsibility tends to be linked to more subdued debt dynamics; (iv) market disciple has encouraged some fiscal restraint at the regional level; and (v) increases in public commercial debt have affected the standard debt.

Suggested Citation

  • Mar Delgado-Téllez & Javier J. Pérez, 2020. "Institutional and Economic Determinants of Regional Public Debt in Spain," Public Finance Review, , vol. 48(2), pages 212-249, March.
    • Handle: RePEc:sae:pubfin:v:48:y:2020:i:2:p:212-249
    DOI: 10.1177/1091142120901672
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    Cited by:

    1. Zhang, Mengtao & Chen, Wenchuan & Kou, Aidi & Wu, Yanjun, 2023. "Promotion incentives, tenure uncertainty, and local government debt risk," Finance Research Letters, Elsevier, vol. 56(C).
    2. Siniša Mali & Lenka MaliCká, 2023. "Impact of Fiscal Decentralization on Fiscal Stance in EU: Real Deal or Econometric Illusion?," Hacienda Pública Española / Review of Public Economics, IEF, vol. 246(3), pages 71-99, September.
    3. Juan S. Mora‐Sanguinetti & Rok Spruk, 2023. "Economic effects of recent experiences of federalism: Analysis of the regionalization process in Spain," Journal of Regional Science, Wiley Blackwell, vol. 63(1), pages 30-63, January.

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    More about this item

    Keywords

    regional public debt; fiscal rules; fiscal federalism; market discipline;
    All these keywords.

    JEL classification:

    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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