%0 Journal Article
%A López Laborda, Julio
%A Montes Nebreda, Andoni
%A Onrubia Fernández, Jorge
%T Should fiscal equalisation and regional policy goals and tools be disentangled?
%D 2025
%@ 0034-3404
%U https://hdl.handle.net/20.500.14352/131001
%X We exploit the mixture of policy goals and instruments of the Spanish Regional Funding System (RFS) to test whether equalisation transfers have an impact on regional convergence. Using FE and 2SLS-IV models and data for 15 regions for the 2002-2018 period, we find that both fiscal equalisation and regional transfers show a significant concave convergence promoting effect, which is larger for regional transfers. However, excess/deficit funding caused by overlapping tools and objectives in the RFS does not have a significant relationship with regional convergence. These results are in line with the Tinbergen rule, since it is more cost-effective to promote regional convergence through regional policy funds.
%~