Revenue autonomy and regional growthan analysis for the 25 year-process of fiscal decentralisation in Spain

Resumen

This paper discusses the existing research on the relationship between fiscal decentralisation and economic growth and proposes some changes on the analyzing approach with regard to the measure of fiscal decentralisation and the estimation of the relationship compared with previous works. These proposals are implemented in the case of the Spanish decentralisation process (1984-2008). As a result a group of revenue autonomy indicators, specific to the Spanish case, is presented and a group of VAR models is estimated for the relationship between revenue autonomy of Spanish regional governments and regional growth. The results of the analysis point to a possible slightly positive effect of revenue autonomy of Spanish regional governments on regional growth. On the other hand, revenue autonomy appears to be not determined by growth but only by political decisions.