Political parties and public policies. A review of the Spanish evidence

Abstract

To what extent does the incumbent party’s identity shape public policies? We investigate this question by examining national and regional policies in Spain. First, we analyze the evolution of voter preferences and the platforms of the two mainstream parties (PSOE and PP) and of the newer challenger parties that emerged post-financial crisis (Ciudadanos, Podemos, and Vox). We focus on three key national-level issue dimensions: Economic, Social, and Centralization. As expected, the right-wing PP adopts a more conservative stance on all dimensions compared to the left-wing PSOE. However, the policy gap between these two parties remains relatively stable until the mid-2000s, with party platforms tracking the evolution of citizen preferences. After this period, platforms start to diverge, especially in the case of new parties, which display radical stances on these dimensions. We also provide descriptive evidence suggesting that these platform differences have translated into enacted policies. Second, to offer causal evidence on the effect of party identity on policy decisions, we examine partisan disparities in regional fiscal policies. Our findings reveal significant differences in tax policy following the granting of tax autonomy to the regions, somewhat moderated by tax competition and fiscal limits.