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Due to the pro-independence demands of part of its electorate, the political fit of Catalonia within Spain has given rise to notable political tensions over the last few years. This conflict has progressively affected several dimensions of Catalan society, including, potentially, the economy. The illegal referendum on independence, held in October 2017, marked the climax of political and social tensions, leading to a Constitutional crisis and further stoking the conflict as opposed to offering any hope of an early resolution. We analyze a complete set of margins potentially affected by the referendum, including real (aggregate demand and supply) and financial responses. Using a synthetic control method, we find strong evidence of the outflow of short-term bank deposits after the referendum; while, on the real side, we find evidence of responses in aggregate supply (number of capital increases and number of new firms registered). [ABSTRACT FROM AUTHOR]

We wonder whether tax enforcement varies along the economic cycle and aim at answering that question from a positive perspective by means of survey data for the Spanish case (1994–2015). According to a fiscal capacity argument, tax enforcement might be stronger in times of crisis (counter‐cyclical), but if the tax administration prioritizes taxpayers' welfare over public revenue, enforcement might be slacker (procyclical). We find tax enforcement is not immune to the state of the economy. In particular, it presents a prevailing counter‐cyclical trend, but in presence of a severe economic crisis it turns out to be procyclical. [ABSTRACT FROM AUTHOR]

Decentralization is believed to constitute the optimal institutional arrangement for the provision of public expenditure. In contrast to centralization, it is thought to offer a better match between the provision of public services and individual preferences. We test this fundamental hypothesis propounded by the fiscal federalism literature by analyzing the process of decentralization undergone by Spain since the beginning of the 1980s. We exploit survey data in which respondents (coded according to their region of residence) are asked about their level of satisfaction with the provision of public goods. A higher degree of satisfaction is expressed when responsibility for education and health expenditure is assigned to the intermediate tier of government rather than to central government. This level of satisfaction, however, is not recorded in the case of Spain's largest regions. Likewise, the simultaneous presence of tax revenue decentralization does not guarantee further welfare gains. In the case of the administration of justice-where the nature of the responsibility assigned to some regional governments is of a merely administrative nature-decentralization does not appear to have any impact on the level of satisfaction expressed. [ABSTRACT FROM AUTHOR]

Trust in the justice administration conditions the sustainability of the very rule of law, and can even promote interpersonal trust and, hence, social capital. Inferring its determinants, which is what I seek to do for the Spanish case, is therefore of paramount importance. I find that the level of trust is dependent on the economic cycle (with evidence of anticyclicality) and independent of whether the service provision is decentralized. These outcomes suggest that citizens expect the justice administration to play a positive role in insuring them against a negative economic shock, unless the economic downturn is particularly marked, while they do not expect--independently of the state of the economy--decentralization to improve performance (or are unaware of which tier of government is responsible for its provision). Finally, we obtain indirect evidence that trust would be strengthened if the resolution rate in the civil jurisdiction were to increase substantially (by around 25%), while in the criminal jurisdiction this margin of improvement is moderate. [ABSTRACT FROM AUTHOR]