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Empirica

, Volume 42, Issue 4, pp 845–864 | Cite as

On the size and determinants of inter-regional redistribution in European countries over the period 1995–2009

  • Santiago Lago-PeñasEmail author
  • Albino Prada
  • Alberto Vaquero
Original Paper

Abstract

The aim of this paper is to analyse cross-country differences in the degree of inter-regional redistribution achieved by means of taxes and expenditures in 21 European countries over the period 1995–2009. We rely on a standard approach based on the observation and comparison of both primary and disposable household income at regional scale. Once the redistributive effect in each country is quantified, we try to explain the drivers of cross-country time-series differences. According to our estimates, cross-national standard deviation is significant and much higher than time variation. Secondly, inter-regional redistribution is strongly and positively related to personal redistribution by means of taxes and social benefits in cash; and is negatively related to both the extent of regional disparities in primary income and to the degree of political and fiscal decentralization.

Keywords

Inter-regional redistribution Regional fiscal imbalance European Union 

JEL Classification

H11 H23 H77 

Notes

Acknowledgments

This research project received financial support from the Spanish Ministry of Science and Innovation (Grant Codes: ECO2010-15553 and CSO2013-4703-C2-2-R). Authors are grateful for helpful comments from Nicolas Gavoille, Nowook Park, Heikki Pursianen, Jorge Martínez-Vázquez, two anonymous reviewers and participants in the 10th PEARL Conference (Fribourg 2013), the workshop “Endogenizing State and Local Fragmentation” organized by the Condorcet Center for Political Economy (Rennes 2013), and the 69th IIPF Meeting (Taormina 2013). The usual disclaimer applies.

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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  • Santiago Lago-Peñas
    • 1
    • 2
    Email author
  • Albino Prada
    • 3
  • Alberto Vaquero
    • 1
  1. 1.GEN and University of VigoOurenseSpain
  2. 2.IEBBarcelonaSpain
  3. 3.ERENEA and University of VigoVigoSpain

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