Factors Explaining the Regulatory Activity of the Spanish Autonomous Communities (1989–2001)

Abstract

In recent decades there has been a resurgence of interest in the study of regulatory activity, focused especially on the importance of regulation in order for markets to function correctly, but also on the detrimental effects of excessive or badly designed regulations for economic growth. (1) As Mashaw and Rose-Ackerman (1983) and Hahn et al (2004) maintain, this interest is greater in federal and decentralised countries, in which there are more governments with legislative powers (ie central, regional, and local governments). (2) Regulation, however, is difficult to evaluate; it is one of several public sector activities which are complicated to quantify, since they lack direct budgetary repercussion and do not generally produce short-term financial responses. As a result, public economics has traditionally paid less attention to regulation than to the financial instruments of public intervention. Spain today is a highly decentralised country. The Autonomous Communities (Spanish regional governments) manage almost 40% of total public expenditure and provide a set of services which directly affect their citizens' welfare (eg health, education, housing, social services, infrastructure). The public employees in the service of the Autonomous Communities represent over 50% of all civil servants. Own revenues, raised by the so-called`common system' Communities, account for over 50% of the total of their nonfinancial revenues, and this percentage is nearly 100% for the`foral system' Communities (Navarre and the Basque Country). (3)

Is the Spanish Constitutional Court an instrument of the central government against the Autonomous Communities?

“…López-Laborda and Vallés (2010) analyze the determinants of the regulatory activity of the Autonomous Communities between 1989 and 2001 and show the relevance of some variables, such as the existence of nationalist political parties in regional governments.…”