Fiscal Adjustment and Welfare Reform Strategies in Response to the Fiscal Crisis: A comparison between Andalusia and Catalonia

Most current research on the implications of the most recent Financial Crisis in Southern Europe has largely focused on data, measures, processed and dynamics at state-wide level and how the central governments have responded to it. In contrast, there is a dearth of analyses at sub-state level, with a specific focus on the conditions under which regional governments have undertaken different types of costly and mainly unpopular measures and reforms of their public sectors and welfare systems, the reasons behind their choices and their relative success in overcoming the already deteriorated situation of their public finances. The severity of the crisis that Spain has undergone since 2007, combined with the significant scope of powers and related expenditure capacity of the Spanish Autonomous Communities (ACs) make of Spain a very suitable place to conduct controlled comparisons of fiscal adjustment policies and welfare reform at regional level. The proposed paper aims at presenting and discussing some empirical findings of the research project “Reform Capacity and Strategies in Regional Public Sectors and Welfare Policies: in the context of Fiscal Crisis: Determinants and Trajectories of Change (CRISAUT)”, funded by the Spanish Ministry of Economy and Competitiveness. Using an analytical framework based on comparative case studies, the paper analyses the decision-making process, contents and scope of regional austerity measures and reforms approved and implemented by two Spanish ACs: Andalusia and Catalonia. Ultimately, we seeks to identify the contextual, political and economic conditions accounting for the similarities and differences in the adjustment trajectories the Andalusian and Catalan governments have followed over the period 2007-2014.