Hierro Luis Angel, Ph.D., Rosario Gómez-Alvarez Díaz, Ph.D., and Atienza Pedro, Ph.D. History and Economics Institutions and Applied Economics, Faculty of Economics-University of Seville, Avda Ramón y Cajal nº 1, Seville, 41018, Spain
The recent reform of the Statute of Catalonia, a Spanish region, includes a novel criterion for federal funding, namely, that the ranking of the Spanish self-governing regions (Comunidades Autónomas) should be kept. This principle means that positional order of the regions according to their volume of own fiscal resources must not change after their receiving intergovernmental transfers. Therefore, a region should not scale up a position in the total resources ranking just because of said transfers. Given the novelty associated to its incorporation into federal funding, the paper seeks to:
1.- Apply reranking indicators taken from economic mobility (Schiller, 1977, Shorrocks, 1978) and tax equity (Plotnick, 1981, Aronson, Johnson and Lambert, 1994), to measure any potential regional reranking resulting from intergovernmental transfers in the Spanish, Canadian and Australian federal schemes.
2.- Analyze theoretical arguments for and against the application of this principle to federal funding.