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Title: The sovereign debt crisis and national centripetal vs. regional centrifugal forces in political economy: empirical lessons from Spain

Authors: Joaquin Gonzalez-Garcia; Joaquin Sotelo-Gonzalez; Pablo Zegarra-Saldaña

Addresses: Department of Business Organization and Management, Polytechnic University of Valencia, C/ Camino de Vera s/n, Valencia, 46022, Spaın ' Department of Journalism II, Mass Media Institute, State University Complutense of Madrid, Ciudad Universitaria, Madrid, 28040, Spaın ' Department of Business Administration, Universidad Privada Boliviana, Av. Victor Ustariz Km 6.5, Cochabamba, Bolivia

Abstract: Existing analytical frameworks are unable to establish what should be the right balance between national centripetal and regional centrifugal economic and political forces that allow for the creation of a stable and prosperous nation so this paper contributes to the body of scholarly works in political economy by concentrating on reviewing empirical evidences that the Spanish highly decentralised political system is failing to strike the right balance, especially during difficult economic times, since the regional centrifugal economic and political forces are overpowering the national centripetal ones and may signal a dangerous disassembling of the nation with the emergence of regional autarkical independence. The political balance of these forces will inevitably have a reflection on the economic variables, thus a causal relationship can be inferred by analysing the evolution of the variables sovereign debt at national and regional levels and the behaviour of the variables risk premium and the public securities credit rating.

Keywords: Spanish sovereign debt crisis; sovereign risk premium; CRAs ratings; national centripetal economic and political forces; regional centrifugal economic and political forces; regional public debt; fiscal decentralisation; country default risk; public accounts transparency; regional fiscal discipline.

DOI: 10.1504/IJSOI.2019.100608

International Journal of Services Operations and Informatics, 2019 Vol.10 No.1, pp.1 - 16

Received: 23 Nov 2018
Accepted: 23 Nov 2018

Published online: 04 Jul 2019 *

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