Consejeros

1 The write-off of the regional governments' debt

The write-off of regional government debt was presented with the intention that the regional governments could once again finance themselves in the markets, where they currently cannot obtain financing or are offered it at high-interest rates, due to having a level of indebtedness far exceeding their current income. The amounts of debt for each regional government that would be transferred to the State were announced, but curiously, the write-off will only be granted to those regional governments that request it. In any case, the announced amounts do not sufficiently clean up the accounts of the regional governments, so if the objective were truly as stated, the policy would be seen as ineffective from the outset and, therefore, poorly conceived in the use of the instrument. However, it may also happen that the pursued objective is different from the declared one. Additionally, the proposal was announced in a confusing manner: some government members advised the regional governments to accept the offer, arguing that the resulting reduction in interest would give them room to act in healthcare, education, etc. But the AIReF has warned that this is not possible, as the regional governments must respect the spending ceiling assigned to them. The confusion in announcing a policy is not good; it is contrary to transparency and generates distrust among the passive subjects of the same, which can condition their responses. And it is these reactions to the announcement of a policy that determine its effectiveness, which, without credibility, will be weaker than expected. Regarding the design of the write-off, if debt from each regional government were truly transferred to the state, leaving them at levels of indebtedness reasonable for the markets, the regional governments would be treated very heterogeneously, without a clear criterion, and introducing an evident moral hazard component for the future, by incentivising fiscal indiscipline. On some occasions, the write-off of debt has been justified as compensation for the underfunding produced since the financial crisis, in a context where some regional governments have assumed greater responsibilities. But then, the criterion for distributing the budget assigned to the debt forgiveness policy should be the magnitude of estimated underfunding, appropriately accumulated over the years, which would have defined a target with precision and rigor. In contrast, the amounts assigned to each regional government are the result of a three-phase process that is difficult to justify with economic criteria.

We still do not know what the outcome of this proposal will be, which has been surrounded by confusion and changes of opinion, has an announced objective that does not correspond with the announced actions, and whose distribution criteria are complex, difficult to justify, and lack coherence among themselves. What is even more important, it does not introduce any incentive to prevent the problem from recurring, and it aims to be nothing more than a patch, without framing it within the reform of the regional financing system, which has been pending reform for years.

2 Design and implementation of the Minimum Vital Income

The development of the Minimum Vital Income (IMV) was soon conditioned by the difficulties in reaching out to those who could be beneficiaries of the aid. A notable technical restriction was not recognised: the central administration could not identify these individuals because most of them cannot be located from a certain administrative registry. In particular, logically, they do not file income tax returns. Among the potential beneficiaries who initially learned about the aid programme, many did not know if they were actually eligible; others had serious difficulties in completing the application. Many of those who were already receiving aid from other programmes did not apply for the IMV for fear of losing the aid they were already receiving. This was partly due to a lack of clarity in the programme description and also due to a lack of coordination between the minimum income programmes of the regional governments and the national IMV, given the reluctance to share information. To this day, it is not possible to clearly know all the aid from different administrations that a person receives. Another significant technical difficulty arose from the design of the programme, as the receipt of the IMV depends on the income conditions of the previous year. This means that those who could currently be beneficiaries but had received employment income the previous year would not receive the aid. Conversely, there have been those who received the IMV because they met the conditions the previous year, but do not do so currently. This has led to claims for the return of the benefit by Social Security, which AIReF estimates at a median of 3,000 euros. Recently, the European Committee of Social Rights (ECSR), an organ of the Council of Europe that oversees compliance with the European Social Charter, has accepted a complaint from the ATD Fourth World association regarding this and other aspects of the design of the IMV. The lack of coherence in the evaluation and design of social aid in Spain was reflected in the fact that Social Security aggregated the beneficiaries of the Minimum Vital Income (IMV) and the Child Benefit Supplement (CAPI), despite being different benefits with very different income thresholds – the CAPI threshold is three times higher. This aggregation confuses the data on the effectiveness of the programme and complicates its evaluation by mixing aids with similar objectives but with very unequal criteria and implementation rates. In the latest evaluation by AIReF (12/2024), it is mentioned that of the 940,000 households that could have received the IMV in 2024, only 390,000 were receiving it in December of that year (41%). 55% of eligible households do not apply for the IMV, and 44% of those who receive it are asked to return amounts due to low or adjusted payrolls. 60% of households receive the IMV for more than three years. The fact is that the IMV has not served to tackle child poverty, which has even increased (27.4% in 2020, currently 28.9%). To achieve this, much more money is needed and perhaps also complementary actions, possibly in the form of a universal child benefit. In 2020, when the aid was approved, the child poverty risk rate (based on the previous year's income) was 27.4%, now it reaches 28.9%, according to Eurostat, and reaches 34.5% if the AROPE indicator of risk of poverty or social exclusion is considered (includes risk of poverty, severe material and social deprivation, and low employment intensity in the household); 13.5% of minors are in a situation of severe poverty. During that time, there has been a pandemic and an inflationary spiral, but also sustained economic growth for more than three years and a political discourse that promised not to leave anyone behind. The High Commissioner for the Fight Against Child Poverty, created in 2018 (RD419/2018), was abolished in November 2023, and its functions were assumed by the Ministry of Youth and Childhood. Additionally, the government should adjust legislation to comply with the Revised European Social Charter, a document that Spain voluntarily ratified in 2021, although there is a whole legal debate about the extent to which ECSR resolutions are binding or not, as is the case with restorative dismissal and the Supreme Court. “Investing in the future: The role of child cash support in mitigating child poverty”, Science for Policy Brief, European Commission, 3/2024, contains a detailed analysis of the programmes implemented to reduce child poverty in Europe, being quite critical of the Spanish case. In short, the IMV programme has suffered from ignoring some restrictions, poor technical design of the instrument along with insufficiency in its intensity, and a lack of coordination with the regional governments' income aids, as well as with other aids from the central administration.

3 How should the design of a public policy be?

We have already accumulated an extensive experience in the implementation of public policies in democracy over the decades. Some with positive results and others not so much. This should be sufficient information to specify some keys about how to design an effective public policy in achieving its objectives and efficient in the use of public resources. In this direction, I will attempt to put forward a proposal in what follows.

“The State Housing Plan 2026-30 reactivates aid for young people's access (€30,000) to protected rental housing with an option to buy. But hardly any such housing is planned (65 in 2024)”

The characteristics I consider necessary for a correct design of a public policy can be structured in three phases: Analysis, Execution, and Control. Two reasons motivate this presentation: firstly, to have an exhaustive list of the stages that must be fulfilled to try to ensure that a policy achieves its results with efficient management of public resources, understanding that omitting any of them will generate some deficiency in results, as I will point out with some examples; secondly, to appreciate that the aspects that need to be covered for such a design must respond to a specific chronology. The Analysis phase begins with:

1. The selection of objectives and instruments: The objectives of public policies can be diverse: reducing school dropout, promoting youth employability, stimulating growth and business creation, increasing social cohesion, stimulating the ecological transition, etc., but they must be defined precisely. For each of them, we may have different instruments, such as the IMV, when the objective is the fight against poverty, especially child poverty.
2. Recognising the restrictions we face, both of a technical and budgetary nature. If we overestimate the means at our disposal, we may make a decision whose implementation proves ineffective. For example, if we intend to incorporate a group of immigrants with a certain level of education, it would be advisable to expedite the processes for validating qualifications. The same would happen if a system of financial incentives were introduced for private promoters for an ambitious social housing construction plan, but we overestimate the available capacity of that group to compete in such calls. Another important restriction is budgetary: Every policy must have an assigned budget that, if not respected, will divert resources from other actions or require a new effort from current or future taxpayers. When it is the government itself that launches a specific policy, it is common for it to remain unspecified how to finance that action. In fact, in current jargon, we are often told what amount “is going to be mobilised” for that policy, without it being clear at all whether it is an amount that is going to be executed in its entirety, if it is a reference of maximums, or if it lacks any value as an estimate of the cost of the policy presented. Another example: in the State Housing Plan 2026-2030, aid for young people's access (€30,000) to protected rental housing with a subsequent option to buy is reactivated, but hardly any such housing has been planned; had it been in force in 2024, it could have financed only 65 operations.
3. We need to have a representation of how our possible interventions on the available instruments affect the pursued objective: a “structural model” or “economic model”. Without a model, a central bank would not know how much to raise interest rates to reduce inflation from 4% to the level of 2% established as the monetary policy reference, and raising them excessively or insufficiently would have significant costs. Something similar would happen if we raised the minimum wage with the goal of reducing inequality, in the absence of a model that relates this wage to employment demand. If the employment of the low-wage group is negatively affected by an increase in the minimum wage, inequality could increase, contrary to the sought objective. Just as in our daily lives, we will also obtain unexpected results in economic policy if we do not take into account that the effects of a policy are felt over time, not just immediately. Thus, with the objective of reducing pension spending, we can introduce incentives to delay the retirement age in the form of a percentage of the retirement pension. Those who delay their retirement will contribute to a current reduction in spending, but this will be greater when retirement is effective, due to the promised incentives, and we will be mistaken if we only consider the immediate effect of our policy. In this Analysis phase, there are other aspects that, in addition to conditioning the success of a policy, contribute to citizens' knowledge of the criteria used in the management of public resources, and make their participation in government action possible, providing a solid basis for greater trust in institutions and greater democratic quality:
4. Efficiency requires establishing coherence between policies, either because they pursue a similar objective or because they use analogous instruments, of which we will not have in unlimited quantity. On the contrary, it is quite astonishing to hear repeated announcements of new National Plans and Strategies without any mention of the synergies between them. Additionally, the effects of any policy are always conditioned by characteristics of the environment that are unpredictable or unquantifiable, which can generate deviations from the expected impacts of our action. The design process must include an estimation of the range of possible results and their plausibility; that is, what values of the objective could be obtained and with what probability. This is the information against which alternative actions pursuing a certain objective should be compared. We can then choose, in terms of the best expected outcome, or conservatively, minimising the probability that our action generates a certain adverse result that we might consider, or in terms of maximising the plausibility of obtaining a positive result above a certain threshold.
5. As part of transparent management, it is mandatory to consult a regulatory project with experts, as it should also be to gather the opinion of the groups that may be affected by the implementation of the public policy. This is not common among our rulers: it is frequent for a regulatory proposal to be contrary to the opinion of experts on the subject, who have not been consulted beforehand, and whose dissenting opinion, when public, is ignored. Or even opinions are gathered, but discarded, as happened with the White Papers on tax reform in 2014 and 2022; the White Paper for the review of the regional financing system, from 2017, or the report Spain 2050. With these precedents, a call was opened this year to hire scientists as advisors to the various ministries. Their role is to guide the design of a policy, indicating what scientific developments may suggest the best way to achieve the objectives pursued, what difficulties may be encountered, and which researchers can be consulted on these issues. We will have to wait to see if this measure truly activates the interaction between governments and the national science system; until now, the problem was not so much the absence of an intermediary with the scientific system, but the lack of sensitivity to subject the ex-ante validation of government proposals to the criteria of experts.
6. The public hearing and consultation processes that have been introduced in the Spanish administration constitute an excellent opportunity to interact with citizens, allowing them to submit their requests and opinions about the design, objectives, and execution of a particular public policy. The Open Government Forum and the Open Government and Open Parliament plans must provide greater transparency and greater citizen participation in regulatory development, but they still need to improve their organisation, functioning, and governance to fulfil their mission.
7. As part of the ex-ante evaluation, the text (be it a royal decree, law, or other type) accompanying the definition of any public policy must: a) justify the choice of a specific type of action, compared to other alternatives, b) explain how the designed intervention, and the assigned budget, can be sufficient to achieve its objective, c) mention the sources and reports consulted, and the opinions gathered from experts, d) mention the instances (lobbies) that may have suggested or influenced the launch of that policy, as well as their regulatory footprint, e) incorporate an international comparison with similar experiences, describing their designs and results. In short, although it may not be mandatory, the requirements demanded of the Regulatory Impact Reports (MAIN) introduced in Law 50/1997, of the Government, and regulated by RD 1083/2009 and DL 931/2017. The MAIN are directed towards an ex-ante evaluation, which requires justifying each new norm, analysing its legal impact, and indicating norms that may be repealed by the new law. They must also incorporate their economic and budgetary impact, describe the reports consulted for the design and drafting of the new norm and the contributions received from the experts and institutions contacted, and the results of the public opinion and public information processes that a bill must undergo before its approval.
8. Precisely because the execution of any public policy has an opportunity cost in terms of the resources it consumes, it is crucial to justify why certain actions are carried out and not others. Ultimately, the exercise of politics consists of setting priorities, taking into account technical and budgetary limitations. Priorities must be set not only in terms of objectives but also in terms of groups of citizens that may be benefited or affected. In a quality democracy, this ranking of priorities, as well as the necessary coherence between policies, Plans, and National Strategies I referred to earlier, must respond to the government programme that was backed by citizens in the electoral period. Once the strategic plan for a public policy is defined, the Execution phase could begin:
9. Depending on the nature of the policy, the optimal action may be a direct intervention by the government (setting tax rates), or the establishment of a certain system of incentives (credits for the purchase of electric cars), in both cases using the available instruments. An action of incorrect intensity or insufficient incentives can ruin a policy: thus, the retirement delay programme introduced in 2021 has had little acceptance, especially among the salaried worker group, due to the insufficient incentive offered. Another example of insufficient incentives is the system of refundable guarantees launched by the ICO in February 2024 for 20%-25% of the purchase price of housing for young people and families with dependents. It has proven to be very ineffective, as warned from the outset by the General Council of the Official Property Agents, because the required income limit prevents exceeding the solvency tests of financial entities. Financial entities also assumed the risk that a applicant granted credit would subsequently not obtain the ICO guarantee. Until October 2025, only 15.7% of the 50,000 operations planned by the Ministry of Housing when this line of credit was opened have been covered. To access this guarantee, which covers 20% or 25% of the deposit, applicants must be under 35 years old or have dependent children, have annual income not exceeding €37,800 in the case of a single buyer (or up to €75,600 if there are two buyers), and the house must be the first they acquire and intended for habitual residence. The plan also aimed to boost the supply of affordable housing by financing developers for construction [“The ICO government guarantees for buying the first home are slowing down despite the crisis”, The Objective, 7/10/2025]. A third example is the subsidies for the prices of airline tickets for residents on the islands, which were recently raised from 50% to 75% of the price of all tickets, whether first class or tourist. In a context of fixed supply, subsidising demand only raises prices, benefiting the companies that provide the service. It is therefore an ineffective, regressive system, and it has a high cost, currently around €1.2 billion, enough to finance Carlos III and Complutense Universities. The AIReF and the National Commission for Markets and Competition issued critical reports on this policy, which were ignored.
10. To carry out a follow-up of the effects of a policy, it is necessary to have measurable and observable indicators. In their absence, we will act by instinct or intuition, and it will never be clear if we have achieved the pursued objective; everything will be arguable. A system of quantitative indicators allows establishing expected trajectories according to the previously outlined objectives. In this way, the results obtained can be provisionally assessed, which may suggest some modification to improve the effectiveness of the policy. The observations obtained in this process must be public, for reasons of transparency, but also so that they can be examined by researchers and experts.
11. Before executing a policy, it must be analysed in detail whether there is sufficient management apparatus. Not having it would be a technical restriction of major relevance, leading to serious limitations in results.
12. When there is a high degree of government decentralisation, the effectiveness of a policy requires collaboration and loyalty between different levels of administration; a key aspect is the necessary exchange of information between administrations. It is common to find overlaps between actions and also gaps, and it is not always clear what the competence and responsibility of each administration is in solving a problem, as we have tragically learned after the Levante storm of 2024 and the summer of fires in 2025.
13. Evidently, for a policy to be effective, it is essential to develop its regulations and put the necessary means into operation, which does not happen in some very relevant cases: the three bodies announced in the Law for the Institutionalisation of the Evaluation of Public Policies of 2022 have yet to be created. Finally, the Control phase, generally at the end of the execution of a public policy, consists of the evaluation of final results and the accountability of public managers, essential aspects in a quality democracy.
14. The ex-post evaluation of public policies must be based on quantitative and observable objectives. Talking about the fulfilment of qualitative objectives such as “improving social cohesion”, “strengthening the business fabric” or “modernising justice” is arbitrary, no matter how often it is done and even surprisingly, percentages of compliance with a qualitative objective are provided. Similarly, in September 2024, the Action Plan for Democracy was presented in Moncloa, creating an interministerial commission to monitor it. As is almost the norm, this is an internal commission, composed of high-ranking ministerial officials. This commission was supposed to meet every three months, but there is only evidence of one meeting last June, in which it was certified that 48% of the objectives of the Action Plan for Democracy had been achieved, surprising both the short period of time in achieving objectives and the precise accounting of the percentage already reached, as they are qualitative in nature. In any case, we do not have minutes of this meeting [“Bolaños presides over a new meeting of the Interministerial Commission of the Action Plan for Democracy”. La Moncloa. 17-06-2025]. Measuring only what has been executed – such as kilometres built or budget spent – does not equate to evaluating the real impact or social benefit of a policy. For an effective evaluation, it is necessary to plan from the outset a data collection, budget, and monitoring system, as well as to have independent agencies and specialised personnel, including collaboration from the scientific field, something underdeveloped in Spain.
15. Along with the ex-ante and ex-post evaluation, accountability meets the democratic requirement of explaining to citizens the results of the use of public resources. It can be specific to a policy, but it is even more appropriate to explain the degree of compliance with the commitments made in an electoral programme, which must be developed through a set of coherent public policies among themselves and with the government programme. The current government established periodic accountability through appearances supported by the reports “Cumpliendo” and on its website. Despite having an academic committee that established its accountability methodology, it is striking that percentages of compliance with qualitative objectives are continuously presented. An objective is considered fulfilled if a certain regulation has been approved; sometimes expressions such as: “It has continued to bet on”, “Measures have been promoted for”, “Work has been done to promote policies”, leading to the “preparation of a proposal for resolution or the draft of a project” to consider an objective fulfilled.

“The subsidy for airline tickets for residents on the islands has been raised from 50% to 75% of the price of all tickets, whether first class or tourist. In a context of fixed supply, subsidising demand only raises prices. It is an ineffective and regressive system that costs €1.2 billion. AIReF and the CNMC issued critical reports on this policy, which were ignored”

Previously, we examined the proposal for the write-off of regional government debt and the minimum vital income from the perspective of the necessary coherence between their objectives, the restrictions they face, the capacity to intervene on the available instruments, and the degree to which such interventions can achieve the sought objective. Now that we have advanced in a proposal of conditions for an effective and efficient public policy, let us review the extent to which a programme as relevant as the Recovery, Transformation and Resilience Plan meets such conditions.

4 An analysis of the Recovery, Transformation and Resilience Plan (PRTR)

In its description, the Recovery, Transformation and Resilience Plan (PRTR) includes 4 “Cross-cutting Axes”, 10 “Lever Policies”, and 30 “Components”, but no “Objective”. It was conceived with broad-reaching objectives of a predominantly qualitative nature (“modernisation of the Spanish economy; sustained increase in productivity and potential growth, better functioning of the labour market, strengthening the business fabric”), without establishing precise indicators that would allow for an objective measurement of progress in its fulfilment. This lack of specificity has hindered the evaluation of results and allowed for a great diversity of actions to be included under its goals, some of which would have developed equally outside the Next Generation EU funds. Likewise, the proposals of the PRTR overlap with various national programmes and strategies – among them the Spain 2050 Strategy – without sufficiently clarifying their articulation or internal coherence. Specifically, there is overlap with the Strategic Framework in SME Policy 2030 (April 2019), or the failed Commission for the Reform of the Administration (CORA); with programmes launched a few months earlier, such as the Spanish Circular Economy Strategy (June 2020), the Spain Digital 2025 plan (July 2020, which presents 50 measures around 10 strategic axes), the Spanish Science, Technology and Innovation Strategy 2021-2027 (September 2020), the National Artificial Intelligence Strategy (November 2020), and the Spain Entrepreneurial Nation strategy (February 2021); as well as with plans presented in the following months, such as the Youth Guarantee Plus 2021-2027 plan (June 2021), or the draft law for the Creation and Growth of Companies (July 2021). The process of elaborating the plan also suffered from a low level of participation and integration of expert knowledge. Neither the proposals made within the Commission of Congress for Social and Economic Reconstruction nor the contributions from the academic field and research groups were significantly incorporated. Thus, a valuable opportunity to provide the plan with greater technical support and rigorous mechanisms for ex-ante and ex-post evaluation was wasted.

 From an institutional point of view, the governance and management structure of the PRTR – centred on an interministerial commission with technical support and the participation of a regional sectoral commission – has proven insufficient given the magnitude of the mobilised resources, the high number of calls, and the demanding execution deadlines imposed by the European Union. Not having a specialised public agency, with functional autonomy and technical capacity, has limited the effectiveness of monitoring and accountability, while making it difficult to unlink certain economic decisions from political cycles. Additionally, the decentralisation of funds to the autonomous communities was not accompanied by a robust coordination system with the General Administration of the State, generating redundancies, overlaps, and areas of action inadequately covered. Another critical aspect of the PRTR lies in the lack of solid mechanisms for transparency, evaluation, and accountability. We do not know the number of applications received in each call, the evaluation criteria for them, and the minutes of the PRTR Monitoring Committee meetings are not made public. The information available through the official plan portal is presented in a fragmented, poorly structured, and sometimes ambiguous manner. Institutions such as AIReF, the European Commission, and the European Court of Auditors have repeatedly expressed their concern about the opacity in the allocation of projects and in the execution of funds, which limits the capacity for public scrutiny and independent evaluation of their impact. The successive platforms Minerva, Coffee, Elisa, have proven very insufficient for minimally interesting monitoring of the execution of the NextGen funds. The European Court of Auditors has issued a warning about the ongoing deficiencies in the control system of Spain's recovery and resilience fund, highlighting problems in monitoring the funds to their final recipient. The review carried out in the audit of the recovery and resilience plans for the year 2024 included the evaluation of the management and control systems of several countries including Germany, Spain, France, Greece, and Italy. The Court's report highlights the “persistent inadequacies” in national controls and mentions the lack of reliability in the data sent by member countries to the European Commission. Furthermore, it notes that Spain and France lack a centralised system that allows for the collection of detailed information on the expenses of final recipients, such as companies or grant beneficiaries, limiting the traceability of public money and complicating the verification of its real impact on the economy, although it clarifies that these deficiencies do not necessarily imply fraud or misappropriation, but represent a structural risk to accountability and transparency. There is no doubt that the budgetary magnitude of the PRTR and the strict execution deadlines set by the European Union have significantly contributed to the dynamism of GDP growth since 2021, although when mentioning this fact, reference to European funds is seldom made. This growth has been mainly sustained by the increase in employment and domestic demand, without a sustained improvement in productivity being observed, one of the fundamental objectives of the plan. Official forecasts actually point to a moderation of growth starting in 2026 and do not anticipate structural advances in productivity. This is partly due to the fact that the attraction of foreign investment in strategic technological sectors – such as electric vehicles or semiconductors – has not been accompanied by a coherent national strategy aimed at developing its own technology, thus missing an opportunity to strengthen innovative capacity, productivity, and the competitiveness of the Spanish economic fabric in the medium and long term.

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