Is public sector performance just a matter of money? The case of the Spanish regional governments

Abstract

Efficient use of public resources is clearly a relevant issue to be studied from several points of view. Among others, it accounts for a significant share of the total economy activity and it deals with non-market oriented activities. In Spain, the regional level is particularly relevant due to the progressive decentralization of key public policies constituting the welfare state (as education, health, etc.) and their increasing financing needs, at the same time with important differences in fiscal capacity between them. Moreover, they mostly share (15 of 17) a common financing system in which an efficient use of resources is assumed but not evaluated. Our results show that normally a few of the regions tend to be the top performers, but there no regions performing poorly in every aspect. It is also worth noting that no dramatic changes can be seen in terms both of expenditure and performance during the recent Great Recession.