Article published by José Miguel González Hernández in the November issue of La Gaveta Económica.
The territorial division of a State requires the establishment of decision-making centers with their own identity. In this way, it would give a specific territory a vitality and socioeconomic boost that would place it at a higher organizational level. This would allow it to face the integration processes with its environment, with a greater probability of success without polarizing its vicissitudes, given that the division would dissect preferences, increasing the complication of their achievement when it comes to being able to satisfy them. However, it may seem absurd to maintain regional boundaries when the organization that governs these areas lacks its own identity and the dimension required by the modern management of public affairs for various reasons such as depopulation, lack of market or an insufficiency of necessary economic elements.
Now, homogeneity, which offers justice when demanding obligations and delegating rights and responsibilities that, ultimately, adds equality and legal security for citizens, incorporates inappropriate situations. This is because it is not possible to identify and supply all declared preferences, because today's society requires extensive networks and multiple systems for the provision of goods and services, both public and private. One of the characteristics is that, generally, their scope is translocal, because the structures of these networks in many cases transcend the term and penetrate into that of others, generating effects, whether positive or negative. Hence, they need to be taken into account in order to know who should bear the benefits or costs, respectively.
Adding pragmatism, the delimitation of the regions, beyond a recognition of historical and social rights, is related to the power of taxation, arising from the fact that zonal corporations are allowed to establish and demand their own taxes in accordance with the supreme regulations and the rest of the laws, in order to have access to public financing. This allows a correct provision of certain goods and services. But this fact, although it seems that it may have its negative side due to the possible attack on the principle of equality, due to the tax variety that could be derived from the freedom that is granted or due to the attribution of discretionary competence, could be an antidote against the homogenization of behavior, making it possible to separate preferences and thus articulate a specific system based on each one of them.
The fact that certain territories are legally exempt from the obligation to provide a series of specific services does not imply that there cannot be a demand on the part of citizens willing to pay the real cost of the service through taxes, nor does it imply that a higher public administration will be responsible for the provision and financing of services from lower level administrations. The issue centers on the fact that there are people who demand it and that is why a certain viability must be managed in order to satisfy them, regardless of the level that carries it out.
Therefore, a financing system based on autonomy does not by itself guarantee that any government can offer the level of services offered by other regions even if all of them make the same fiscal effort. In fact, a compensation subsidy that is focused according to capacity and fiscal effort could exacerbate the inequity process, given that there may be depressed areas that have, for one reason or another, a low fiscal effort and should not receive less compensation. And what does such reasoning lead us to? It is necessary to quantify the volume of resources that are considered necessary for each of the levels of public administration, and even more so when the aim is to economically and socially unite society. At the same time, it would be necessary to specify how the demand or level of needs for each service in each region is defined with a basis of statistical and accounting infrastructure. After evaluating the volume of resources, the fiscal capacity would have to be established, which could be studied through the difference between the volume of available resources and potential collection.
Ultimately, the system's purpose is to put an end to the discrimination suffered by citizens in places where they lack sufficient administrative and financial capacity to provide minimum services. Therefore, it is necessary to empower the power to regulate its tax sources, as well as modify the distribution criteria. Financial autonomy is the realization of the principle of autonomy in the economic and fiscal sphere. In fact, without financial autonomy there is no management autonomy, much less political autonomy.
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José Miguel González Hernández
Consulting Director
Corporation 5
