The Redistributive Power of the Central Government Budget

Abstract

We analyse the redistributive power of the Spanish central government budget to diminish regional disparities in per capita income in the 1991-1996 period. It firstly makes a brief overview of the most relevant empirical studies carried out on this subject, analysing their methodologies and results. Secondly, it estimates the redistributive power of the budgetary policies of the Spanish central government. Its principal interest lies in the fact that the data base used allows the redistributive effect of the main items of revenue and expenditure to be analysed, whereas the majority of studies carried out limit the categories of expenditure to the case of transfers. The results obtained are in line with those from other studies. The redistributive power of the central budget is around 40%, expenditure being much more redistributive than revenue, with the exception of individual income tax.