Regional Investment Dynamics: A Comparative Study of the Autonomous Communities in Spain

Abstract

This paper aims to provide a comprehensive description of the evolution of public investment by the Autonomous Communities in Spain from 1984 to 2021, to identify patterns in investment policies and explain their underlying causes. Additionally, the paper evaluates the impact of savings, transfers, and deficits on public investment. The findings reveal distinct patterns in the level and dynamics of these variables across regions. Priority was given to essential welfare expenditures during the Great Recession, while the post-recession recovery displayed varied regional behaviors. The positive impact of European and national funds, such as the Interterritorial Compensation Fund, effectively revitalized investment and savings, which emerged as a key differentiating factor in chartered communities.