An Economic Agreement for Scotland?

  1. Andoni Montes-Nebreda 1
  1. 1 Universidad del País Vasco/Euskal Herriko Unibertsitatea
    info

    Universidad del País Vasco/Euskal Herriko Unibertsitatea

    Lejona, España

    ROR https://ror.org/000xsnr85

Revista:
Revista d'estudis autonòmics i federals

ISSN: 1886-2632

Año de publicación: 2021

Número: 34

Páginas: 329-374

Tipo: Artículo

DOI: 10.2436/20.8080.01.77 DIALNET GOOGLE SCHOLAR lock_openDialnet editor

Otras publicaciones en: Revista d'estudis autonòmics i federals

Resumen

Since the devolution process in the United Kingdom began in 1997, the funding system for devolved institutions has been discussed constantly by academics and in the media, particularly in Scotland. Currently, transfers are regulated under the recently amended Barnett formula, which indexes Block Grant devolutions to English public expenditures and is often considered insufficient to establish a desirable incentive scheme for decentralised institutions. Because of Brexit and its consequences for Britain’s devolution process, tackling this issue has become an urgent issue. The Basque Economic Agreement with Spain, characterised by high levels of tax autonomy and strict fiscal co-responsibility, could conceivably inspire a reconfigured financial relationship between Scotland and Westminster. This paper simulates the mechanical impact of the application of the principles of the Basque Economic Agreement to the Scottish case for devolved government income. Even if it is likely to provide Scotland with a lower expenditure capacity (ceteris paribus), such a scheme could increase fiscal efficiency while also safeguarding self-government and providing the political stability that the United Kingdom needs, given the current weakness of the union due to a challenging socio-economic and political context.

€ Ver financiación

Información de financiación

This work has been supported by the 2018 Institut d’Estudis de l’Autogovern individual research grant.

Financiadores

  • Institut d’Estudis de l’Autogovern Spain

Referencias bibliográficas

  • Agirreazkuenaga, Joseba, and Eduardo Alonso Olea. Historia de la Diputación Foral de Bizkaia, 1500-2014. BFA, Bizkaiko Foru Aldundia. Ad Concordiam, 2014.
  • Arlucea Ruiz, Juan Esteban. “Características del modelo competencial”. Derecho Público Autonómico Vasco (November 2016).
  • Beasley, Ryan, Juliet Kaarbo, and Hannah Solomon-Strauss. “To be or not to be a state? Role contestation in the debate over Scottish independence”. In Christian Cantir, and Juliet Kaarbo, Domestic Role Contestation, Foreign Policy and International Relations. Routledge, 2016.
  • Bell, David, David Eiser, and David Phillips. “Scotland’s fiscal framework: Assessing the agreement”. IFS Working Papers, no. W16/05 (2016). https://www.ifs.org. uk/uploads/publications/wps/wp201605.pdf.
  • Bell, David, and David Eiser. “Scotland’s Fiscal Future in the UK”. Working Paper. University of Stirling (2014). http://hdl.handle.net/1893/21180.
  • Bell, David, Willem Sas, and John Houston. “Starting from scratch? A new approach to subnational public finance”. Regional Studies (2020): 1-13. https://doi.org/10 .1080/00343404.2020.1839640.
  • Bogdanor, Vernon. Devolution in the UK. Oxford. Oxford University Press, 2001. Bosch, Núria, and Jose María Durán, eds. Fiscal federalism and political decentralization: Lessons from Spain, Germany and Canada. Edward Elgar Publishing, 2008. https://dialnet.unirioja.es/servlet/libro?codigo=378240
  • Brennan, Geoffrey, and James Buchanan. The power to tax: Analytic foundations of a fiscal constitution. Cambridge: Cambridge University Press, 1980. https:// EconPapers.repec.org/RePEc:cup:cbooks:9780521233293.
  • Chaqués, Laura, and Anna M. Palau. “Comparing law-making activities in a quasi-federal system of government: The case of Spain”. Comparative Political Studies 44, no. 8 (2011): 1089-1119. https://doi.org/10.1177/0010414011405171.
  • Civil Service of the UK Government. “Introduction to Devolution”. Policy Report, 2019. https://assets.publishing.service.gov.uk/government/uploads/system/ uploads/attachment_data/file/770300/IntroductionToDevolution.pdf.
  • De la Fuente, Ángel. “Sobre la generalización del sistema de concierto”. Fedea Policy Papers 2018-02 (2018). http://documentos.fedea.net/pubs/fpp/2018/01/ FPP2018-02.pdf.
  • Eiser, David. “Will the benefits of fiscal devolution outweigh the costs? Considering Scotland’s new fiscal framework”. Regional Studies 54, no. 10 (2020): 1457-1468. https://doi.org/10.1080/00343404.2020.1782875.
  • Eiser, David. “The funding of the Scottish Parliament’s new social security responsibilities: how will it work and what are the risks? 21 key questions (and answers)”. Fraser of Allander Economic Commentary 43, no. 4 (2019). https://pureportal. strath.ac.uk/en/publications/the-funding-of-the-scottish-parliaments-new-social-security-respo.
  • Eiser, David, and Graeme Roy. “The fiscal framework: 2021 review”. Fraser of Allander Economic Commentary 43, no. 2 (2019). https://pureportal.strath.ac.uk/en/ publications/the-fiscal-framework-editorial-introduction.
  • Erkoreka, Mikel. “The Basque and Swiss Fiscal Systems Building Processes as a Source of Lessons for the European Integration Process”. In Gemma Martínez Bárbara, and Xabier Irujo, International Perspectives of Fiscal Federalism: The Basque Tax System. Reno: Center for Basque Studies, University of Nevada, 2018. https://conciertoeconomico.org/pdf/bibliografia/CBS_Fiscal%20Federalism_Indice.pdf.
  • Esteller-Moré, Alejandro, and Albert Solé-Ollé. “Vertical income tax externalities and fiscal interdependence: evidence from the US”. Regional Science and Urban Economics 31, no. 2-3 (2001): 247-272. https://doi.org/10.1016/S0166- 0462(00)00060-0.
  • Eusko Jaurlaritza. “Parlamentarios escoceses visitan Euskadi para estudiar los poderes fiscales y el Concierto Económico”. (2015, 26/10). Irekia. https://www. irekia.euskadi.eus/es/news/28994-parlamentarios-escoceses-visitan-euskadi-para-estudiar-los-poderes-fiscales-concierto-economico.
  • Ferguson, Linda, David Learmonth, Peter G. McGregor, J. Kim Swales, and Karen Turner. “The Impact of the Barnett Formula on the Scottish Economy: Endogenous Population and Variable Formula Proportions.” Environment and Planning A: Economy and Space 39, no. 12 (December 2007): 3008-27. https:// doi.org/10.1068/a38254.
  • Fernández Gómez, Natividad, and Carlos Monasterio Escudero. “Debates sobre la reforma del Sistema de Financiación Autonómica: i) A favor y en contra de la cláusula de statu quo”. Fedea Policy Papers 2018-05 (2018). http://documentos. fedea.net/pubs/fpp/2018/06/FPP2018-05.pdf.
  • Flinders, Matthew. “Constitutional Anomie: Patterns of Democracy and ‘The Governance of Britain’”. Government and Opposition 44, no. 4 (2009): 385-411. https://doi.org/10.1111/j.1477-7053.2009.01294.x.
  • Fondevila Marón, Manuel. “Los referéndums de secesión en la Unión Europea y sus consecuencias para los entes descentralizados de los estados miembros”. Revista d’Estudis Autonòmics i Federals 30 (2019): 231-69. https://www.raco.cat/ index.php/REAF/article/view/370075.
  • Foremny, Dirk. “Sub-national deficits in European countries: The impact of fiscal rules and tax autonomy”. European Journal of Political Economy 34 (2014): 86- 110. https://doi.org/10.1016/j.ejpoleco.2014.01.003.
  • Friedman, Uri. “Should the Brexit Vote Have Happened at All?” The Atlantic (June 27, 2016). https://www.theatlantic.com/international/archive/2016/06/brexit-vote-referendum-democracy/488654/.
  • Galindo Caldés, Ramon. “El proyecto laborista de descentralización democrática de Inglaterra”. Revista d’Estudis Autonòmics i Federals, no. 3 (2006): 121-48. https://www.raco.cat/index.php/REAF/article/view/253026.
  • Gamble, Andrew. “The Constitutional Revolution in the United Kingdom”. Publius: The Journal of Federalism 36, no. 1 (2006): 19-35. https://doi.org/10.1093/publius/pjj011.
  • Harford, Tim. “Referendums break democracies so best to avoid them”. Financial Times (March 2, 2018). https://www.ft.com/content/995babac-1c98-11e8-aaca-4574d7dabfb6.
  • Hazell, Robert. “Devolution and the Future of the Union”. The Constitution Unit UCL (2015). https://www.ucl.ac.uk/constitution-unit/news/2015/may/press-release-devolution-and-future-union-challenge-new-parliament.
  • HM Treasury. “Corporate tax rates and small profits thresholds from 2023” (2021). https://www.gov.uk/guidance/corporate-tax.
  • Ifan, Guto, Cian Siôn, and Ed Poole. Government Expenditure and Revenue Wales 2019. Wales Governance Centre, 2019. https://www.cardiff.ac.uk/__data/assets/ pdf_file/0009/1542474/full_gerw_print.pdf.
  • Keating, Michael. “Rethinking Sovereignty. Independence-lite, devolution-max and national accommodation”. Revista d’Estudis Autonòmics i Federals 16 (2012): 9-29.
  • Keating, Michael, and Guy Laforest. “Federalism and devolution: the UK and Canada”. In Constitutional Politics and the Territorial Question in Canada and the United Kingdom, 1-18. Cham.: Palgrave Macmillan, 2018. https://link.springer. com/chapter/10.1007/978-3-319-58074-6_1.
  • Keep, Matthew. “The Barnett formula”. Briefing Paper 7386 (2020). House of Commons Library. https://commonslibrary.parliament.uk/research-briefings/cbp7386/.
  • Mackley, Andrew. “Social Security Powers in the UK”. Briefing Paper 9048 (2020). London: House of Commons Library. https://commonslibrary.parliament. uk/research-briefings/cbp-9048/.
  • Martínez Bárbara, Gemma. The Basque Economic Agreement: Tax and Financial Glossary. Vitoria-Gasteiz: Tax Coordination Committee of the Basque Country, 2019. https://www.euskadi.eus/contenidos/informacion/octe/es_def/adjuntos/ Glossary.pdf.
  • Martínez Bárbara, Gemma. “Tax Harmonization in Federal Systems: The Basque Case”. In Joseba Aguirreazkuenaga, and Xabier Irujo, The Basque fiscal system contrasted to Nevada and Catalonia: in the time of major crises. Reno: Center for Basque Studies, University of Nevada, 2016. http://hdl.handle.net/11714/6472.
  • Martínez Bárbara, Gemma. Armonización fiscal y poder tributario foral en la Comunidad Autónoma del País Vasco. IVAP. Colección Financiación Autonómica, 2014. https://www. euskadi.eus/gobierno-vasco/-/libro/armonizacion-fiscal-y-poder-tributario-foral-en-la-comunidad-autonoma-del-pais-vasco/.
  • Mirrlees, James, and Adam Stuart. Tax by design: The Mirrlees review. Oxford University Press and Institute for Fiscal Studies, 2011. https://www.ifs.org.uk/ publications/5353.
  • Montes, Andoni. “Foral tax autonomy on Corporate Income Tax and European harmonization. Are they compatible?” Research Collection 1. Bilbao: Ad Concordiam. 2019. https://conciertoeconomico.org/wp-content/uploads/2021/03/ foral_tax_autonomy_on_corporate_income_tax_and_european_harmonization_01.pdf.
  • Mullen, Tom. Review of implications of Brexit-related UK legislation for devolved competence. Scottish Parliament, 2019. https://www.parliament.scot/S5_Finance/ General%20Documents/201908_Paper_by_Prof_Tom_Mullen_and_Prof_Jo_ Hunt.pdf. Musgrave, Richard A. “Theories of fiscal federalism. Public Finance”. Finances publiques 24, no. 4 (1969): 521-536.
  • Musgrave, Richard A. “Economics of Fiscal Federalism”. Nebraska Journal of Economics and Business 10, no. 4 (1971): 3-13. www.jstor.org/stable/40472398.
  • Oates, Wallace E. Fiscal federalism. Books, 1972. . “Toward a second-generation theory of fiscal federalism”. International tax and public finance 12(4) (2005): 349-373. https://doi.org/10.1007/s10797-005- 1619-9.
  • OECD/KIPF. “Institutions of Intergovernmental Fiscal Relations: Challenges Ahead”. OECD Fiscal Federalism Studies. (2015) Paris: OECD Publishing. http://dx.doi. org/10.1787/9789264246966-en.
  • Poole, Ed, Guto Ifan, and David Phillips. “Fair funding for taxing times? Assessing the fiscal framework agreement”. Third report on the 2016–17 fiscal framework negotiations for Wales (2017). https://www.cardiff.ac.uk/__data/ assets/pdf_file/0008/1287233/Fair-Funding-for-Taxing-Times-Assessing-theFiscal-Framework-Agreement.pdf.
  • Puigdemont, Carles, and Oriol Junqueras. “Que gane el diálogo, que las urnas decidan”. El País Opinión (March 22, 2017). https://elpais.com/elpais/2017/03/19/ opinion/1489946049_837011.html.
  • Rappeport, Alan. “Finance leaders reach global tax deal aimed at ending profit shifting”. The New York Times (June 11, 2021). https://www.nytimes. com/2021/06/05/us/politics/g7-global-minimum-tax.html.
  • Rawlings, Richard. “Brexit and the Territorial Constitution: Devolution, Re-Regulation and Intergovernmental Relations”. The Constitution Society (2017). https:// consoc.org.uk/wp-content/uploads/2017/10/Brexit-and-devolution-final-2.pdf.
  • Requejo, Ferran. “Ĺ Espagne est-elle un État federal?” In Felix Mathieu, Dave Guénette, and Alain-G. Gagnon, Cinquante déclinaisons de fédéralisme. Théorie, enjeux et études de cas. 2020. https://www.puq.ca/catalogue/livres/cinquante-declinaisons-federalisme-3988.html.
  • Rodríguez-Pose, Andrés, and Nicholas Gill. “On the ‘economic dividend’ of devolution”. Regional studies 39, no. 4 (2005): 405-420. https://doi. org/10.1080/00343400500128390.
  • Scottish Government. “Devolved taxes: a policy framework”. Policy Report (2019). https://www.gov.scot/binaries/content/documents/govscot/publications/ consultation-paper/2019/03/devolved-taxes-policy-framework/documents/ devolved-taxes-policy-framework/devolved-taxes-policy-framework/govscot%3Adocument/devolved-taxes-policy-framework.pdf.
  • Sinn, Hans-Wener. The new systems competition. Blackwell Publishing, 2003.
  • Sorens, Jason. “The institutions of fiscal federalism”. Publius: The Journal of Federalism 41, no. 2 (2011): 207-231. https://doi.org/10.1093/publius/pjq016.
  • Taub, Amanda, and Max Fisher. “Why Referendums Aren´t as Democratic as They Seem”. The New York Times (April 4, 2016). https://www.nytimes. com/2016/10/05/world/americas/colombia-brexit-referendum-farc-cameron-santos.html?mcubz=3.
Fuente de los datos: Dialnet