Publications

During the years of crisis, Spain’s autonomous communities have experienced a significant general increase in their deficits and, until 2012, have had severe difficulties to control them. Their debts have grown strongly and are considered the most worrying element of Spain’s public finance situation. Some regions are having serious problems in financing their deficits and refinancing their debts, facing the foreclosure of markets. This paper examines the trajectory of financial imbalances of the regions and the causes of the differences between them, analyzing whether the sub-central governments’ deficits are due to their greater tendency to spend or to insufficient income, structural or cyclical. The work focuses on the decade in which all the regions already administered their educational and health systems. This homogeneity enables to compare and to identify the causes of the differences in the deficit and indebtedness levels between regions, differentiating between two subperiods, before and after 2007. The deficit of each autonomous community is broken down into four components: the average (structural) deficit of the regions as a whole, the average (structural) deviation of income and of expenses in each of the regions analyzed, and the cyclical component. The analysis of the indebtedness considers the effect of these components on the level of debt of each region and the importance that on this level has had the moment in which educational and health systems are transferred.