Fiscal Federalism

The federalism fiscal matter is framed in the training block relating to the study of the public sector, in the Degree of Economics. As regulated in DR 1393/2007, and in USC's own legislation, the subject matter is mandatory in the Curriculum, which is temporarily located in the first half of the 4th grade. Thus, it is intended for students of the Bachelor's Degree in Economics of the Campus of Santiago de Compostela.

Its mandatory nature in the same thematic field as other mandatory subjects of the Public Finance module reveal its importance in the formation of the future graduate in Economics.

The teaching programming is composed of four teaching units, which address the most relevant aspects of multilevel governments in the field Theory of Fiscal Federalism and the practice that is part of the knowledge of the regional and local Spanish reality.

Unit I. Introduction
Fiscal Federalism: Regulatory functional scheme
Assignment function: the Oates model and Tiebout theory
Redistributive function
Macroeconomic stabilization policies

Unit II. Decentralization. Advantages and Inconveniences
Local public goods as mixed goods.
The overflowing effects
The congestion effect
Externalities and economies of scale
Tax competition
Redistribution and mobility
Decentralization: principles and practice

Unit III. Perecution systems.
Fiscal leveling:vertical and horizontal
Transfers. Types and effects. "Fly paper effect"
Decentralized public debt
Comparative experience

Unit IV. The regional and local financing system in Spain
Temporary development of the regional and local process
The autonomous system
- The regional financing system (common)
- The foral system
The local system
- Dimension features and problems
- Your resources: tax system, subsidies and indebtedness.
- Financing of local corporations: the municipal tax system.

Basic bibliography

- ALBI, J. et al. (2017). Economía Pública 1º tomo (última edición)
- ECCLESTON, R. KREVER, R.(eds.)(2017): The future of Federalism. Intergovernmental financial relations in an age of austerity. Edward Elgar. Cheltenham, UK.
- LAGO-PEÑAS, S. (2021). 40 años de descentralización en España (1978-2018): Balance y perspectivas. Madrid: FUNCAS.
- GIMENEZ, A. (2003): Federalismo Fiscal. Teoría y Práctica, Tirant lo Blanch, Valencia.
- LAGO-PEÑAS, S. , MARTÍNEZ-VAZQUEZ, J. (coord).(2015). La nueva reforma de la financiación autonómica: análisis y propuestas. Papeles de Economía Española, vol. 143.
-LAGO-PEÑAS, S. (2021). 40 años de la descentralización en España (1978-2018), Funcas.
- MINISTERIO DE HACIENDA (2017): Informe de la Comisión de Expertos para la Revisión del Modelo de Financiación Autonómica, Madrid.
- MONASTERIO, C. e SUÁREZ, J. (2002): Manual de Hacienda Autonómica y Local, Ed. Ariel, Barcelona.
- RODDEN, J.; ESKELAND, G. e LITVACKM, J. (eds.). Fiscal Decentralization and Callenge of Hard Budget Constraints, MIT Press.

CÓDIGO TRIBUTARIO

Complementary bibliography
- BERDAHL,L. E VANDER, C. (2002): "Urban Finance: crisis and remedies", Horizons, 5 (1), 12-14.
- BIRD, R., SLACK, E. (2.004): "Fiscal aspects of metropolitan governance", Working Paper 0401, Institute for International Business, University of Toronto
- BOADWAY, R. y SHAH, A. (2009): Handbook on Fiscal Federalism, Cambridge University Press
-CADAVAL, M. y CALVO, S. (2022): "Indisciplina fiscal y mecanismos extraordinarios de liquidez", Papeles de Economía Española, 175, 121-137 .
-CRSFA (2017). Reforma de la Financiación Territorial. Informes de las Comisiones de Expertos de 2017. IEF, Madrid.
- DE LA FUENTE, A. (2019). "Financiación autonómica: una breve introducción". Estudios sobre la Economía Española 2019/07
- DAFFLON, B. (2002): "Structures communales: Qu'est-ce qui distingue la collaboration intercommunale, l'agglomération et la fusion?", Working Paper 325, BENEFRI, Université Fribourg.
- EHTISHAM, A., BROSIO, G. (Eds.)(2006): Handbook on Fiscal Federalism, Edgar Elgar Publishing, UK
- LAGO, M., LAGO-PEÑAS, S., MARTÍNEZ-VÁZQUEZ, J. (2024). "On the effects of intergovernmental grants: a survey" International tax and Public Finance
- LAGO, S., VAQUERO, A. (2016). Descentralización y Sistema Tributario. Lecciones de la Experiencia Comparada, Fundación Impuestos y Competitividad, Madrid
MARTÍNEZ-VÁZQUEZ, J., LAGO-PEÑAS, S., SACCHI, A. (2016). "The impact of fiscal decentralization. A survey", Journal of Economics Surveis, 4, pp. 1095-1129
- QUIGLEY, J.M. e RUBINFELD, D. (1996): "Federalism and Reductions in the Federal Budget", pp. 289-302, National Tax Journal
- ROBBERTS, J. (1992): "A Comment of the Many Faces of Tiebout Bias", pp. 45-51, Journal of Urban Economics, vol. 32.
- VAQUERO-GARCIA, A., CADAVAL-SAMPEDRO, M., LAGO-PEÑAS, S. (2022). Do Political Factors Affect Fiscal Consoidation? Evidence from Spanish Regional Governments, Sage Open.
- VV.AA. (2022). 10 Años de Gestión Pública Intergubernamental en Iberoamérica. Finanzas, Instituciones y Nuevos retos, IEF, Madrid.
- VV.AA. (2023). Retos de la financiación territorial en tiempos de postpandemia. IEF, Madrid

CÓDIGO TRIBUTARIO

Competencies of the degree to which the subject contributes:
• To be able to identify, gather and interpret relevant data on economic issues, incorporating in the elaboration of judgments and proposals the relevant considerations on their social, scientific or ethical dimension.
• To identify information, ideas, problems and proposals for solutions to economic issues, making use of both verbal and written language and the means and techniques of representation of relationships and presentation of data that are used in economics.
• Possess the general knowledge of economics and learning skills necessary to continue studying and to undertake specialized studies in economics and other related areas, with a high degree of autonomy.
• Knowledge of national and international economic reality, productive sectors, public sector, economic institutions and their evolution.
• Public economy: nature, justification and objectives of public sector intervention in the economy: public finances, taxation, social services, health, education, etc. The development of economic policies.
• Contribute to the good management of the allocation of resources, both in the private and public spheres.
• Acquisition of objective management and project management skills.

Specific competencies:
• Know the positive and normative theories of the subject.
• Acquire skills for empirical analysis.
• Acquire information on the federal systems compared, in the field of multi-level public finances.
• Enter into the field of autonomous financing.

The content of the subject is taught in the first half of the course, with a teaching load of 4.5 ECTS credits. Half of which are exhibition and the other interactive half, interspersing classes in large group, small, tutoring, etc. Thus, and according to the schedule established by the Center, the weekly distribution of the school load will be made by combining the exhibition classrooms with the interactive ones. This mixture will first allow a theoretical approach to the most relevant aspects of matter, followed by case studies.


In all scenarios it is about enhancing the autonomous learning of students, including feedback and self-assessment elements, with tests through the virtual campus, job delivery, participation lists, etc. The time spent on remote tasks will, in any case, be proportionate to the subject matter and materials used must comply with intellectual property and data protection regulations.

The student assessment can be through face several tests during the semester so that students demonstrate the knowledge they acquire. This continuous assessment weighs at least 30% of the final grade, but to be taken into account, the student has overcome, at least 25% of each.
The remaining 70% will be assessed in the final exam.

Studens with waiver of clase attendance will have to pass a final exam about the syllabus contents. This will be assessed in 100%.

work face to face
Exhibition classes 20
Small group classes 10
Small group or individual classes and tutoring 7
Evaluation in large groups 8

Total hours of face-to-face work in classroom 45

STUDENT'S PERSONAL WORK
Individual or group self-employed study 50
Writing exercises, conclusions or other works 7.5
Computer or practical activities 5
Recommended readings, library activities or the like 5

It is necessary for the student to become familiar with legal, statistical and budgetary documentation, both locally and regionally. It should be able to consult information on the tax systems of federal countries, based on the literature provided.
It is considered essential for the overcoming of the matter, not only the memorization of the contents but, above all, its understanding. To this end, it is appropriate to resolve the proposed exercises individually, in addition to the work that can be done - individual or as a group.
In the event that, after the active participation in the student's class throughout the course, the proposed activities and the qualification obtained in the exams are not sufficient to pass the subject in the first call, he must take the examination of the next call, for which he will keep the notes obtained in the work, attendance and active participation in the classroom. This reservation will not be made for subsequent calls.