A study of the determinants of budgetary deviations of the Autonomous Communities in the period 2003-2012
This paper aims to identify factors that can explain the behaviour of the Autonomous Communities in relation to their budgetary stability objectives. For this purpose, it is estimated, for all regions and for the period 2003-2012, the degree of compliance of each community with its deficit target based on compliance in the previous exercises and a set of variables related to macroeconomic, political, budgetary and institutional factors. According to the results, the previous breach of an Autonomous Community increases non-compliance in the current period, while the previous breach of the whole regional level stimulates individual compliance. In election year, the degree of non-compliance with the objectives of stability will be higher. The opposite happens if the president of the community belongs to the PSOE. Finally, lower per capita revenues or higher per capita primary expenditures also favor the breach of regional fiscal rules. The revenue effect is greater than the expenditure one and this latter seems to be owed more to the functioning of the political market in each region than to changes in expenditure needs.