The relationship between the capacity of the Spanish central government to retain tax-revenue shares and interregional inequality

I examine the relationship between the dynamics of the size of the Spanish central government, by looking at central government tax-revenue-retention shares in different domestic regions, and regional-income heterogeneity. Annual data correspond to the 1986 – 2001 period. In addition to interregional inequality, other factors, such as per capita transfers from the central government, regional saving rates, and years in which there is a change in the party leading the central government, also contribute to the decreasing dynamics of revenues that are retained by the Spanish central government.