Smoke and mirrors: how regional finances complicate Spanish-Catalan relations

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Abstract

This article examines the relationship between the form of fiscal decentralization in Spain and the rise in tensions between the Spanish and Catalan governments during the financial crisis, in particular from mid 2010 to mid 2013. As a profound budgetary crisis unfolded at regional government level in Spain, longstanding disputes over the regional financing system and its methods of redistribution among the seventeen autonomous communities escalated. Most notably, Catalonia, one of the most indebted regions, attributed its financial woes in part to over-redistribution. This is not a straightforward connection, but the lack of clarity regarding both the workings of the regional financing system and the causes of the regions’ varying levels of fiscal (in)compliance reduced accountability and fuelled disputes among central and regional governments, giving both sides scope to offer different interpretations. The smoke and mirrors regarding regional finances combined with the nature of intergovernmental dynamics in Spain contribute to explaining the persistent inability to resolve regional fiscal problems and agree a long-lasting reform of the regional financing system.

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  • Gray IJIS Accepted Manuscript 2014

    Rights statement: This is an Accepted Manuscript of an article published by Intellect in the International Journal of Iberian Studies on 1 March 2014, available online: https://doi.org/10.1386/ijis.27.1.21_1

    Accepted author manuscript, 298 KB, PDF-document

Details

Original languageEnglish
Pages (from-to)21-42
Number of pages22
JournalInternational Journal of Iberian Studies
Volume27
Issue number1
DOIs
StatePublished - 1 Mar 2014

    Keywords

  • Spain, Catalonia, autonomous communities, fiscal decentralization, financial crisis, political economy, nationalism

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