Adjusting to Austerity: The Public Spending Responses of Regional Governments to the Budget Constraint in Spain and Italy

Abstract

What are the effects of fiscal imbalances, and austerity, on regional-level spending? To answer this question, we examine an original dataset of yearly spending decisions of regional governments in Italy and Spain between 2003 and 2015. We find that the rise in regional deficits has an important negative effect on regional governments’ spending. The strength of this effect is however mitigated by the presence of a left-wing party in regional office. In addition, we uncover an important variation in the extent of cut-backs across policy sectors: regional governments tend to protect the health sector and focus their retrenchment efforts on social assistance and running of public institutions. Partisanship matters here too, as left-wing parties tend to protect healthcare more than their right-wing rivals. These findings bear relevance for understanding the role of partisanship and policy sector in the process of public retrenchment in multi-level states.

Publication DOI: https://doi.org/10.1017/S0143814X20000094
Divisions: College of Business and Social Sciences > School of Social Sciences & Humanities > Politics, History and International Relations
College of Business and Social Sciences > School of Social Sciences & Humanities > Aston Centre for Europe
College of Business and Social Sciences > School of Social Sciences & Humanities
Additional Information: The final publication is available via Cambridge Journals Online at http://dx.doi.org/10.1017/S0143814X20000094
Uncontrolled Keywords: austerity,deficit,partisanship,public policy,regional government,spending,Public Administration,Management, Monitoring, Policy and Law
Full Text Link:
Related URLs: https://www.cam ... 32FDE3B002A9EB8 (Publisher URL)
http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2020-05-19
Published Online Date: 2020-05-19
Accepted Date: 2020-04-08
Authors: Toubeau, Simon
Vampa, Davide (ORCID Profile 0000-0001-5983-5422)

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