RT Journal Article
T1 The effects of capital grants to subnational governments under fiscal stress: evidence from the Spanish regions
A1 Lago Peñas, Santiago
A1 Vaquero García, Alberto
A1 Cadabal Sampedro, María
A1 Sánchez Fernández, Patricio
K1 Intergovernmental grants
K1 Regional policy
K1 Crowding-out effect
K1 Capital expenditure
AB PurposeThis paper aims to examine the impact of capital grants on the fiscal choices of Spanish regional governments from 1984 to 2021.Design/methodology/approachAfter running a battery of tests to verify the integration order of variables, joint cointegration and causality direction, the authors estimate a series of vector autoregressive models.FindingsThe results show that capital grants were highly effective until 2007, boosting capital expenditure and generating a significant crowding-in effect on capital expenditure in the long run. Then, the authors specifically analyze structural changes due to the deep impact of the Great Recession in Spain since 2008. However, the crowding-in effect still holds. Conditionality and matching rates are relevant elements of a sound definition of grant programs to subcentral governments.Originality/valueThe findings contribute significantly to the existing literature on fiscal federalism and regional economics.
PB Emerald
YR 2025
FD 2025
LK https://hdl.handle.net/10347/45083
UL https://hdl.handle.net/10347/45083
LA eng
NO Lago-Peñas S, Vaquero García A, Cadaval Sampedro M, Sanchez-Fernandez P (2025), "The effects of capital grants to subnational governments under fiscal stress: evidence from the Spanish regions". Applied Economic Analysis, Vol. 33 No. 99 pp. 165–183, doi: https://doi.org/10.1108/AEA-04-2024-0154
DS Minerva
RD 24 abr 2026