Abstract: This paper analyzes the effects of interpersonal fiscal redistribution on provincial growth and conver-gence in spain over 2000-2010. after reviewing the literature and stressing the ambiguity of its con-clusions, the paper offers an overview of the main characteristics of the interpersonal fiscal flows dis-tribution. Next, it specifies a convergence model in which interpersonal fiscal flows are used as a keyindependent variable. Before further proceeding, the paper applies a filtering technique to remove spa-tial autocorrelation from raw data and, then, it estimates the model by GMM. The main conclusion isthat interpersonal fiscal flows are an important policy instrument to promote both growth and, aboveall, convergence across spanish provinces. Therefore, it seems that the typical trade-off between effi-ciency and equity does not hold in this case.
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