EconomistMontoro has presented, for the second time, territorialized accounts that aim to gauge the fairness of public action. They are the result of an enormous effort. Firstly, a methodological one, as they do not meet internationally recognized criteria, but rather have been developed ad hoc. Secondly, they have required the treatment of a mass of data, most of which can only be adapted to this methodology by applying imaginative assumptions.
The results, however, are what Montoro sought: Catalonia’s deficit with the rest of Spain is only 3.13%, which is exactly what one would expect in terms of its GDP per capita.
Will the results convince the Catalans? Hardly. The exercise is convoluted (all the calculations of fiscal balances are, but these are of the tax-benefit variety, so they are even more so), and it includes a great deal of questionable assumptions. One example: according to Montoro’s calculation: not only do Madrid residents pay more, but they also receive less, in spite of the advantages they enjoy by living in the capital, which are obvious by merely setting foot in Madrid.
If I were Montoro, I would have approached the issue differently.
Over a century working on it
If I were Montoro, I would have noted that Catalans have been trying to calculate the fiscal balances for more than a century, always clashing with a secretive State, and always arriving at frightening conclusions; at least since Flos i Calcal (1896) up through Trias Fragas and Ernest Lluch.
I would have noted that Spain calculated and published the 2005 balances following internationally established methodologies, which were confirmed by Catalan calculations; and that Spain, despite promising to publish the balances annually, has not done so. With these antecedents, if I were Montoro I wouldn’t have sponsored a new methodology and further calculations. For all the rigor that went into them, these figures can only convince those who were already convinced.
If I were Montoro and believed that the Catalan deficit with the rest of Spain was only 3.13% of GDP, I would make Catalonia an offer: a fiscal pact with a solidarity cap of 4%1. I would have finished sooner and would have still come out the winner.
