Structure and restructuring in the Spanish economy

Abstract

The changing character of the economic environment in the last quarter of the twentieth century has resulted in a continuous process of restructuring in the economy of Spain, mediated through the structure and regulatory framework of the economy. Three specific themes contributing to restructuring are addressed: globalisation of the economy, European integration, and the role of the public sector. Globalisation ofthe economy is demonstrated through increased international flows of goods, capital, people and information, and by the incorporation of businesses in Spain within the corporate networks of foreign multinational companies. Spanish businesses too have been extending their global reach, especially into Latin America. European integration has been part of the globalisation process. A substantial proportion of international flows are now concentrated within the European Union and business networks have been adapting to the 'Single European Market'. European integration has dominated economic policy, first in measures to secure membership of the European Economic Community, then in measures to adjust to the regulatory environment of the European Community and finally in the race to achieve the Maastricht criteria. The role of the public sector in restructuring has been to 'manage' the market forces unleashed by the liberalisation ofthe economy. Market forces, embracing increased competition and technological change, have driven the restructuring process demanding responses from the government. These responses have increasingly been constrained by the shedding of responsibilities upwards to international organisations and downwards to lower tiers of administration. Isolation, protection and goverrunent intervention in the economy have given way to a more liberal, open and international environment. Transformation in the mode of regulation from state corporatism to neo-liberalism has been accompanied by globalisation of the economy, particularly integration into the European economy and the corporate space of multinational companies. Nevertheless, despite the growing emphasis on globalisation, public policy continues to play a crucial role influencing the pace, if not the direction, of restructuring.