Luis Garicano, Jesús Fernández-Villaverde and Francisco de la Torre.
On 19 May 2025, the Rafael del Pino Foundation organised the meeting "Territorial Privileges in Spain", in which the following participated Luis Garicano, Jesús Fernández-Villaverde and Francisco de la Torreon the occasion of the presentation of the book "La factura del cupo catalán. Territorial privileges versus citizenship" by Jesús Fernández-Villaverde and Francisco de la Torre.
The event took place according to the following programme:
19.10 Welcome
19.10 Intervention by Jesús Fernández-Villaverde
19.15 Intervention by Luis Garicano
19.35 Dialogue "Privileges of the territories in Spain vis-à-vis citizenship" . Luis Garicano, Jesús Fernández-Villaverde and Francisco de la Torre.
Jesús Fernández-Villaverde isHoward Marks Presidential Professor of Economics and Director of the Penn Initiative for the Study of the Markets at the University of Pennsylvania, Fellow of the Econometric Society and member of the National Bureau of Economic Research (NBER), of the "group of one hundred" and of the editorial board of relevant national and international publications. He holds a degree in Law and Economics and Business Administration from ICADE and a PhD in Economics from the University of Minnesota.
Francisco de la Torre holds a degree in Law and a degree in Economics and Business Studies from ICADE. In 1999, he passed the competitive examination for the post of Tax Inspector in 1999, coming first in his class. He has worked as an Administrator of the Tax Agency and also as an Inspector. He was elected Member of Parliament in the general elections in December 2012. Subsequently, he was elected Chairman of the Budget Committee of the Congress of Deputies. He was also spokesman for Ciudadanos in the Finance and Public Function Committee and deputy spokesman in the Economy, Industry and Competitiveness Committee. In January 2017 he was elected as head of taxation in the National Executive Committee of Ciudadanos. He resigned in July 2019 from the executive committee of Cs. In September 2019, he re-entered the Administration, joining the Ministry of Justice as a tax inspector in the international arbitration unit of the State Attorney's Office. After spending three years in the technical office of the Director General of the Tax Agency as a consultant inspector and coordinator, he joined the Central Delegation of Large Taxpayers in December 2024. He was secretary general and spokesperson for the Professional Organisation of Tax Inspectors between 2008 and 2012.
Luis Garicano is a Senior Lecturer in the School of Public Policy at the London School of Economics. He began his academic career at the Booth School of Business at the University of Chicago, where he obtained the rank of Senior Lecturer in Economics and Strategy after ten years on the faculty, and subsequently at the London School of Economics, where he has been a Senior Lecturer in Economics and Strategy in the school's Economics and Management Departments and Director of the Economics and Management Strategy Group. He has also been a visiting professor at other institutions, including MIT, Columbia Business School and the London Business School. He has held positions as an economist at the European Commission and at McKinsey & Company, where he has also been a professor at the FEDEA foundation. His research has appeared in leading international academic journals in economics including The Quarterly Journal of Economics, The Journal of Political Economy, The American Economic Review y The Review of Economic Studies. For a few years, Garicano left academia and became an MEP between 2019 and August 2022. During his parliamentary mandate, he was vice-president of the Renew Europe Group, responsible for economic affairs, and vice-president of the European political party Alliance of Liberals and Democrats for Europe (ALDE). Luis Garicano holds a degree in Economics and Law from the University of Valladolid, a Master's degree in European Economic Studies from the College of Europe in Bruges and a Master's and PhD in Economics from the University of Chicago.
Summary:
On May 19, 2025, the Rafael del Pino Foundation hosted the dialogue "Territorial privileges in Spain". on the occasion of the presentation of the book The Catalan quota bill. Territorial privileges versus citizenship.signed by economists Jesús Fernández-Villaverde and Francisco de la Torre. They were joined by the economist and former MEP Luis Garicano. The event served to put on the table one of the most complex and, at the same time, most urgent debates in Spanish politics: the reform of the regional funding system.
Throughout their speeches, the speakers argued that the current foral system in force in the Basque Country and Navarre, based on the so-called "quota", generates a situation of unjustified over-financing with respect to the rest of the autonomous communities. However, the greatest concern is that this model will be extended to Catalonia by means of a "singular financing" that is the result of temporary political agreements.
A structural problem, not a cyclical one
Jesús Fernández-Villaverde opened the debate with a rigorous presentation of the data supporting the main thesis of the book: the foral regime grants a much greater fiscal capacity to the communities that enjoy it, to the detriment of the rest of the territories and the principle of equality among citizens. "Spain is the fourth most decentralised country in the world", he pointed out, "and the system of regional financing is, in practice, the backbone of the welfare state". The problem, he added, is that the rules are not the same for everyone.
Using pedagogical examples and figures taken from official sources, Fernández-Villaverde showed how the quota allows the Basque Country to have 6,600 euros per inhabitant for public spending, compared to 3,100 in Andalusia or 3,800 in Catalonia. This is not due to a fiscal effort of its own, but to an opaque and discretional calculation of the quota that ignores, for example, the deficit of the Basque pension system or transfers from the State.
A warning from economics
Luis Garicano stressed that this debate is not merely technical or historical, but profoundly political and economic. "While Europe seeks integration, Spain is moving towards fragmentation. And with it we are losing efficiency, capacity for growth and social cohesion," he warned. The current system, he added, encourages the constant demand for more territorial privileges, instead of rewarding efficiency in spending or wealth creation.
In addition, Garicano warned of the risks of structural decisions such as the transfer of fiscal powers being taken in the context of parliamentary negotiation, without public debate or technical evaluation. "Every time an investiture vote is exchanged for a transfer, we take a step towards a more unequal and less governable system," he said.
Transparency, equity and citizenship
Francisco de la Torre, co-author of the book, drew on his experience as a tax technician and former MP to debunk some of the common myths about the economic agreement. In his opinion, the main problem is not only fiscal asymmetry, but also democratic asymmetry: "The provincial deputies can vote for laws that affect the whole of Spain, but Congress cannot touch a comma of the tax laws of these communities". And he recalled a recent example: the refusal of Congress to return in a single payment the IRPF to the mutualistas, a decision adopted with the votes of foral parties whose communities had already returned this money.
Throughout the event, the authors argued that it is not a question of recentralising the state, but of making it more equitable, rational and transparent. The "singular financing" model currently being negotiated with Catalonia, they concluded, does not resolve the community's structural problems, such as the deficit or economic stagnation, and could generate a domino effect among other regions that also demand their "quota".
A call for public debate
As Garicano pointed out, "Spain needs a new wave of reforms and institutional regeneration comparable to that of the Transition". And this modernisation, according to the three economists, involves tackling the debate on regional funding without any complexes. Because, as they pointed out at the end, this is an issue that directly affects public services, the quality of democracy and the essential principle of equality among citizens.
The Rafael del Pino Foundation is not responsible for the comments, opinions or statements made by the people who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their sole responsibility. The contents included in the summary of this conference are the result of the debates held at the meeting held for this purpose at the Foundation and are the responsibility of their authors.
The Rafael del Pino Foundation is not responsible for any comments, opinions or statements made by third parties. In this respect, the FRP is not obliged to monitor the views expressed by such third parties who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their own responsibility. The contents included in the summary of this conference are the result of the discussions that took place during the conference organised for this purpose at the Foundation and are the sole responsibility of its authors.
