{"title":"Analyzing the causality between revenues and expenditures in Spanish municipalities and its policy implications","authors":"Mihaela Simionescu, Javier Cifuentes-Faura","doi":"10.1007/s40888-024-00322-5","DOIUrl":null,"url":null,"abstract":"<p>This paper examines the causality between expenditure and revenues for Spanish municipalities after their division in four groups according to size given by number of inhabitants. The results based on Juodis, Karavias and Sarafidis test in the period 2011–2020 indicated that the bidirectional causality between revenues and expenditure is supported for three groups of municipalities (smaller than 5,001 inhabitants, from 5,001 to 20,000 people, from 20,001 to 50,000 inhabitants). The bidirectional causality in municipalities larger than 50,000 inhabitants is checked only for taxes and expenditure at 5% significance level. Large municipalities with more than half a million inhabitants could employ revenue-enhancing policies to overcome the budget deficit, while smaller municipalities promote fiscal synchronization and realize revenues and expenditures at the same time. The policy implications of results are discussed.</p>","PeriodicalId":44858,"journal":{"name":"Economia Politica","volume":"75 1","pages":""},"PeriodicalIF":2.8000,"publicationDate":"2024-01-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economia Politica","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1007/s40888-024-00322-5","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
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Abstract
This paper examines the causality between expenditure and revenues for Spanish municipalities after their division in four groups according to size given by number of inhabitants. The results based on Juodis, Karavias and Sarafidis test in the period 2011–2020 indicated that the bidirectional causality between revenues and expenditure is supported for three groups of municipalities (smaller than 5,001 inhabitants, from 5,001 to 20,000 people, from 20,001 to 50,000 inhabitants). The bidirectional causality in municipalities larger than 50,000 inhabitants is checked only for taxes and expenditure at 5% significance level. Large municipalities with more than half a million inhabitants could employ revenue-enhancing policies to overcome the budget deficit, while smaller municipalities promote fiscal synchronization and realize revenues and expenditures at the same time. The policy implications of results are discussed.
期刊介绍：
This journal publishes peer-reviewed articles that link theory and analysis in political economy, promoting a deeper understanding of economic realities and more effective courses of policy action. Established in 1984, the journal has kept pace with the times in disseminating high-quality and influential research aimed at establishing fruitful links between theories, approaches and institutions. With this relaunch (which combines Springer’s worldwide scientific scope with the Italian cultural roots of il Mulino and Fondazione Edison, whose research has been published by the two mentioned publishers for many years), the journal further reinforces its position in the European and international economic debate and scientific community. Furthermore, this move increases its pluralistic attention to the role that – at the micro, sectoral, and macro level – institutions and innovation play in the unfolding of economic change at different stages of development.
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