IntroductionOver the last three decades, interest in fiscal decentralization has grown worldwide (World Bank, 2000). Evidence of this interest is to be seen in the large proportion of developing countries that have embarked on some form of devolution of fiscal responsibilities from central to regional and local governments (Dillinger, 1994), while many developed nations are reviving the debate on fiscal decentralization (Oates, 1999). Thus, for example, Belgium became a federal state in 1993, and Italy is currently moving in that direction. Likewise, in Spain and Portugal fiscal decentralization is an ongoing process. Meanwhile, the United States Congress has been contemplating over the last several years the elimination of numerous federal programmes, replacing them with block grants to subnational governments, and ending the so-called unfunded federal mandates (Xie et al, 1999).This global trend is closely related to the belief that fiscal decentralization contributes to economic development (Oates, 1993), and, eventually, to the reduction of regional disparities (Qian and Weingast, 1997). This suggests that the devolution of fiscal power to subnational governments might generate a more balanced distribution of resources across space. Before accepting this argument, however, it should be noted that fiscal decentralization could have spatially regressive effects, as a result of the weakening of the equalization role of central government (Prud'homme, 1995). In light of these contrasting theoretical positions, detailed examination of the available empirical evidence on the relationship between fiscal decentralization and regional inequality becomes indispensable. Despite its potential importance, however, surprisingly little attention has been paid to this issue in the literature. Indeed, so far only Shankar and Shah (2003), Gil et al (2004) and Rodr|¨guez-Pose and Gill (2004) have investigated this issue with cross-country data. (1) The results of these studies are, however, inconclusive and present a mixed picture of the effect of fiscal decentralization on regional disparities.

Ezcurra R., Gil C., Pascual P. and Rapun M. (2005) Regional inequality in the European Union: does industry mix matter?, Regional Studies 39 , 679-697. The aim of this paper is to test for the respective roles of regional and sectoral factors in productivity convergence in the European Union between 1977 and 1999. The methodology used for this is a new one that combines an alternative version of shift-share analysis with various results quoted in the literature on personal income distribution. The empirical evidence suggests that regional disparity in productivity in the European Union is closely related to intrinsic differences between regions. Whatever the case, the results that emerge also reveal the fundamental role of the country effect in accounting for regional disparities in income per worker in Europe. In addition our empirical results support the relevance of one-sector growth models to explicate per-capita income disparities in the European regions.Regional disparities, Productivity, Shift-share analysis, European Union, Inegalites regionales, Productivite, Analyse redistribution-repartition, Union europeenne, Regionale Ungleichheiten, Produktivitat, Shift-share Analyse, Europaische Union, Disparidades regionales, Productividad, Analisis shift-share, Union Europea, JEL classifications: R10, R11, R58,

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The need for restrictions on borrowing by subnational governments is a generally accepted notion that is justified both by public choice theory and by the fact that such restrictions are in force in the majority of decentralized countries. Furthermore, recent breaches of the Stability and Growth Pact of the European Union have led to the introduction of legislative tools aimed at balancing the budget at all levels of government have come to the forefront of interest in European public finance research. This paper is concerned with the financial situation and debt level of Spanish municipalities from 1988 to 2000. We have two main objectives: the first is to assess the value of mandatory limitations on municipal borrowing and past trends in the borrowing policies adopted by Spanish local authorities. The second is to develop an econometric model using panel data stratified by population size to measure indebtedness in Spanish municipalities. These measures enable us to formulate a series of hypotheses to explain municipal borrowing practices, which are then tested empirically. The evidence thus obtained appears to support the effectiveness of institutional borrowing restrictions to introduce some financial discipline in the borrowing policies adopted by local governments in Spain. Copyright Springer Science+Business Media, LLC 2007Municipal indebtedness, Institutional restrictions, Net savings, Debt service,

This paper examines the distribution dynamics of regional per capita income in the European Union between 1977 and 1999. To achieve this aim, we combine a non-parametric approach with the information provided by various measures used in the literature on personal income distribution. The results obtained suggest that regional inequality and polarisation have decreased in the European context over the period considered. Likewise, the observed level of intradistributional mobility is relatively low. Furthermore, our findings reveal the important role played by the national component and the spatial dimension in the distribution dynamics.