Budgets and democracy: the welfare state in Spain and Portugal, 1960-1986

Abstract

In the last hundred years, most European countries have increased spending on the redistribution of income, at the expense of spending on defence, police and administration. Some theories on the «political determinants of policies» point to a relationship of Second World War. In view of the fact that, in many cases, democracy in Europe was established before the Second World War, it would be advisable to extend these studies on the relationship between democracy and redistribution policies to earlier periods. In the case of Spain and Portugal, however, the problem can be studied in a more recent period, as democracy is relatively new there. This is what is analysed in this article. The conclusions on the effect of democracy on redistribution policies in Spain and Portugal show more differences than similarities and reinforce the general causality between democracy and redistributive state budgets. Other factors, however, like the dynamics of economic growth, may have originated the redistributive trend in public budgets. Most empirical studies of this problem have concentrated on Europe after the conclusion that there is no unequivocal relationship between the two factors under analysis.