Geoscience Reference
In-Depth Information
interpersonal redistribution in Spain. Hence, the resilience over time of the
centralized nature of interpersonal taxes and transfers.
Consistently, the observable modifications of fiscal federalism in Spain reflect
specific historical moments in which national parties are unable to form a
solid majority of their own, and need the political support of those net payers
in favor of a rebalancing of the system (primarily Catalonian and/or Basque
nationalist parties). The demand for change stemmed from the distributive
consequences associated both with the centralized system in place and with
the asymmetric nature of the original fiscal contract, which allowed the Basque
Country and Navarra to have largely independent fiscal systems outside of
the fiscal system at work in the rest of the country (the so-called common
system). However, the partial modification of fiscal federal arrangements was
only feasible when the national parties representing the beneficiaries of the
existing fiscal structure needed to compromise to secure a sufficient majority in
Parliament.
This process reflects, in part, an endogenous transformation over time of
certain aspects of the system of representation itself, most notably the nature
of partisan political competition at national and regional levels. The intensifi-
cation of demands at the regional level creates a centrifugal spiral in terms of
competition that forces national parties to adjust their position and partially
accept adjustments to the fiscal structure.
Yet these dynamics have found a limit in the organization of social security.
Even during periods of national minority government, attempts to question
the centralized nature of social security have, so far, been aborted from the
start. This was the case during the discussion of the
Plan Ibarretxe
Plan as
well as during the drafting and approval of the new
Estatuto de Catalunya
(Constitution of Catalonia). In both instances, internal resistance within the
Socialist party (PSOE) toward further concessions to demands from Catalonia
and the Basque Country, and fear that the national opposition party would
benefit from becoming the last line of defense of Spain's social security system,
successfully preempted any move towards the decentralization of social secu-
rity. Given the system of representation in place, the electoral consequences in
those regions currently benefiting from the system were too high to seriously
pursue such a move.
In the following sections I will, first, provide a detailed characterization of
the original constitutional contract and its asymmetries (both in political and
fiscal terms) and provide an overview of the evolution of Spain's fiscal structure
during democracy. Second, I discuss the interplay between Spain's economic
geography and the status quo in terms of fiscal structures, thereby providing
an analysis of the distributive implications of the current system. The third and
fourth sections analyze the political conflicts emerging from such tensions and
how they are resolved, involving both adjustments to interregional transfers
and attempts to decentralize social security. Finally, the closing section brings
together the main theoretical implications of the chapter.
