Skip to main content
SpringerLink
Log in

1977: Hopes Fulfilled—Building Democracy in Turbulent Economic Times

  • Chapter
  • First Online:
Historical Turning Points in Spanish Economic Growth and Development, 1808–2008

Part of the book series: Palgrave Studies in Economic History ((PEHS))

Abstract

This chapter offers an analysis of the main economic and institutional transformations in Spain from 1977 onwards. The severe economic and financial crisis that hit Spain in the mid-1970s coincided with the arrival of democracy after Franco’s death and shaped the nature and scope of the implemented reforms (Pactos de la Moncloa). While the crisis and political instability limited the possibility of making a more radical adjustment, the consensus among different social actors, unions and political parties was fundamental to the reforms. This time hopes were fulfilled and although some reforms were left pending, those that were adopted played a seminal role in putting the Spanish economy and society on the path to international standardization and integration into Europe.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 129.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 169.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 169.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    The economic crisis started in 1976 but worsened in 1977 as a consequence of the banking crisis that erupted in that year.

  2. 2.

    The economic situation was probably not correctly assessed, and the crisis was considered as temporary (Betrán et al. 2010).

  3. 3.

    The output loss is a way of determining the loss associated with a crisis. This is estimated by summing the differences between trend growth and output growth following the crisis, up to the point where annual output growth returns to its trend (see Betrán and Pons 2017).

  4. 4.

    The agrarian population as a share of the total population in Spain dropped from 50% to 25% in less than twenty years. The share of agriculture in GDP, which represented around 25% in 1960, fell to less than 10% in 1975 (Prados de la Escosura 2017).

  5. 5.

    During the 1960s and until 1975, the Spanish economy diversified and improved efficiency significantly, with an annual increase in total factor productivity from 1965 to 1975 of 3.8% for the whole economy (Prados de la Escosura 2017).

  6. 6.

    The decision had an asymmetric effect on different consumers because the subsidized prices were mainly for industrial producers and less so for end consumers.

  7. 7.

    The costs of loans doubled as a consequence of the peseta devaluation. This mainly affected certain sectors, such as the electricity sector. Eleven out of the fifteen most indebted companies in dollars belonged to the electricity sector (De la Torre and Rubio 2015).

  8. 8.

    In relative terms, unemployment rates in the 1970s were higher than in other countries but lower than the peaks of 21.5% in 1985, 24.5% in 1994 or 27% in 2008.

  9. 9.

    As explained in more detail in Sect. 6.3, the fiscal system was very underdeveloped and did not have the capacity to increase revenues, while the monetary policy lacked the necessary instruments to be effective.

  10. 10.

    The McCracken Report issued by the OECD in June 1977 was widely referenced (Trullen 1993). For details about other experiences in Europe of agreed wage policies, see Flanagan, Soskice and Ulman (1985).

  11. 11.

    For a history of the social security system, see Boldrin, Jiménez- Martín and Perachi (1999) and Pons and Silvestre (2010).

  12. 12.

    For example, during the 1960s Fuentes Quintana published several works about the need for tax reform , in the journals Información Comercial Española and Anales de Economía.

  13. 13.

    VAT was introduced in the EEC in the late 1960s, when that body consisted of only six members (Belgium, France, West Germany, Italy, Luxembourg and the Netherlands). However, in the UK it was introduced in 1973. Several reasons were given to justify why it was not introduced in Spain in the 1970s, such as the impact on prices (in an inflationary context) and the possible negative impact on exports.

  14. 14.

    In 1975 pensions represented around 36% of total public spending, rising to 40% in 1980, whereas unemployment was around 2.98% in 1975 and increased to 12.5% in 1980 (Espuelas 2013).

  15. 15.

    It was also a consequence of the compulsory eight years of basic education imposed by the General Law of Education in 1970.

  16. 16.

    In 1976, Spanish women’s level of education was very low and from the late 1970s the number of female graduates from tertiary education increased substantially (Rodríguez-Modroño et al. 2016).

  17. 17.

    However, not to other public goods, such as justice.

  18. 18.

    Only thirty-five foreign banks entered the Spanish market and their market share in terms of deposits never exceeded 2%. However, their presence boosted the level of competition and also had a positive influence on financial innovations such as the loans tied to floating interest rates or the interbank market development (Álvarez and Iglesias 1992).

  19. 19.

    For information about the current structure of the Spanish labour market, as well as the effects of the Great Recession, see Andrés and Doménech (2015).

References

  • Alcaide, J. 1988. El gasto publico en la democracia española. Papeles de Economía 37: 2–41.

    Google Scholar 

  • Álvarez, P., and C. Iglesias. 1992. La banca extranjera en España en el período 1978–1990. Estudios Económicos del Servicio de Estudios del Banco de España 47.

    Google Scholar 

  • Álvarez, S., J. Prieto, and D. Romero. 2003. Principales rasgos de la evolución del gasto público en España en el período 1975–2003. In El gasto público en la democracia: estudios en el XXV aniversario de la Constitución española de 1978, coords. S. Alvarez and J. Salinas, 47–75. Madrid: Ministerio de Hacienda, Instituto de Estudios Fiscales.

    Google Scholar 

  • Andrés, J. 1994. Los salarios agregados y el paro, un examen de los estudios empíricos existentes. In El paro en España, ¿tiene solución?, coords. O. Blanchard and J.F. Jimeno. Madrid: Consejo Superior de Cámaras de Comercio, Industria y Navegación de España.

    Google Scholar 

  • Andrés, J., and R. Doménech. 2015. En busca de la prosperidad. Los retos de la sociedad española en la economía global del siglo XXI. Barcelona: Deusto.

    Google Scholar 

  • Aríztegui, J. 1990. La política monetaria. In España, economía, dir. J.L. García Delgado, 1123–1148.

    Google Scholar 

  • Bank of Spain. Estadísticas. Several years (1970–1990).

    Google Scholar 

  • Bentolila, S., and J.F. Jimeno. 2003. Spanish Unemployment: The End of the World Ride. CEMFI Working Paper 0307.

    Google Scholar 

  • Betrán, C., and M.A. Pons. 2017. Two Great Crisis and Their Economic Impact Compared: Spain 1976/1977 and 2008. Revista de Historia Económica—Journal of Iberian and Latin America.

    Google Scholar 

  • Betrán, C., A. Cubel, M.A. Pons, and M.T. Sanchís. 2010. La España democrática (1975–2000). La economía. Madrid: Síntesis.

    Google Scholar 

  • Blanco, F., L. Caviedes, and S. Alvarez. 2003. El sistema de Pensiones de la Seguridad Social. In El gasto público en la democracia: estudios en el XXV aniversario de la Constitución española de 1978, coords. S. Alvarez and J. Salinas, 223–254. Madrid: Ministerio de Hacienda, Instituto de Estudios Fiscales.

    Google Scholar 

  • Boldrin, M., S. Jiménez-Martín, F. Peracchi. 1999. Social Security and Retirement in Spain. In Social Security and Retirement around the World. J. ed. Gruber and D.A. Wise, 305–353. Chicago: University of Chicago and NBER.

    Google Scholar 

  • Buisán, A., and E. Gordo. 1997. El sector exterior en España, Estudios Económicos, 60. Madrid: Banco de España.

    Google Scholar 

  • Cabrera, M. 2011. Los Pactos de la Moncloa: Acuerdos políticos frente a la crisis. Historia y Política 26: 81–110.

    Google Scholar 

  • Cantarero, D., and R.M. Urbanos. 2003. Política sectorial de gasto público. Sanidad. In El gasto público en la democracia: estudios en el XXV aniversario de la Constitución española de 1978, coords. S. Alvarez and J. Salinas, 155–189. Madrid: Ministerio de Hacienda, Instituto de Estudios Fiscales.

    Google Scholar 

  • Comín, F. 1996. Historia de la Hacienda pública, II (España (1808–1995). Barcelona: Crítica

    Google Scholar 

  • Comín, F. 2010. Los seguros sociales y el Estado del Bienestar en el siglo XX. In Estado de Bienestar en España, 1900–1945. Los seguros de accidentes, vejez, desempleo y enfermedad, ed. J. Pons and J. Silvestre, 17–49. Zaragoza: Prensas Universitarias de Zaragoza.

    Google Scholar 

  • ———. 2012. Default, Rescheduling and Inflation: Public Debt Crises in Spain During the 19th and 20th Centuries. Revista de Historia Económica—Journal of Iberian and Latin American Economic History 30 (3): 353–390.

    Article  Google Scholar 

  • Cuervo, A. 1988. La crisis bancaria en España, 1977–1985. Causas, sistemas de tratamiento y coste. Barcelona: Ariel.

    Google Scholar 

  • De Juan, A. 2017. De buenos banqueros a malos banqueros. Madrid: Marcial-Pons.

    Google Scholar 

  • De la Dehesa, G., J.J. Ruiz, and A. Torres. 1991. Trade Liberalisation in Spain. In Liberalising Foreign Trade, eds. M. Michaley, D. Papageorigiou, and A. Chosky, VI. Oxford: Blackwell.

    Google Scholar 

  • De la Torre, J., and M. Rubio. 2015. La financiación exterior del desarrollo industrial español a través del IEME, c. 1950–1982, Estudios de Historia Económica, 69. Madrid: Banco de España.

    Google Scholar 

  • Díaz Roldán, M.C. 2007. La política monetaria en España: evolución reciente e implicaciones macroeconómicas. ICE 837: 21–30.

    Google Scholar 

  • Espuelas, S. 2013. La evolución del gasto social público en España, 1850–2005, Estudios de Historia Económica, 63. Madrid: Banco de España.

    Google Scholar 

  • Eurostat. Database. Several years (1970–1990)

    Google Scholar 

  • Ferreiro, J. 2003. Políticas de rentas y reformas laborales en España. Revista del Ministerio de Trabajo y Asuntos Sociales 46: 15–39.

    Google Scholar 

  • Flanagan, R., D. Soskice, and L. Ulman. 1985. Sindicalismo, estabilización económica y política de rentas: la experiencia europea. Madrid: Ministerio de Trabajo y Seguridad Social.

    Google Scholar 

  • Fuentes Quintana, E. 1982. Economía y política en la transición democrática española. Pensamiento Iberoamericano 1: 143–175.

    Google Scholar 

  • ———. 2005. De los Pactos de la Moncloa a la entrada en la Comunidad Económica Europea (1977–1986). Información Comercial Española 826: 39–71.

    Google Scholar 

  • Jimeno, J.F., and A.C. Ortega. 2003. Veinticinco años de mercado de trabajo en España. Economía Industrial 349–350: 103–110.

    Google Scholar 

  • Jordà, O., M. Schularick, and A. Taylor. 2017. Macrofinancial History and the New Business Cycle Facts. In NBER Macroeconomics Annual Conference 2016, ed. M. Eichenbaum and J.A. Parker, 31. Chicago: University of Chicago Press.

    Google Scholar 

  • Laeven, L., and F. Valencia. 2013. Systemic Banking Crises Database. IMF Economic Review 61 (2): 225–270.

    Article  Google Scholar 

  • Layard, R., D.S.J. Nickell, and R. Jackman. 1991. Unemployment: Macroeconomic Performance and the Labour Market. Oxford: Oxford University Press.

    Google Scholar 

  • Malo de Molina, J.L. 2003. Una visión macroeconómica de los veinticinco años de la Constitución española. Madrid: Banco de España.

    Google Scholar 

  • ———. 2011. Las bases macroeconómicas del desarrollo reciente del sistema financiero español. In Un siglo de historia del sistema financiero español, eds. J.L. Malo de Molina and P. Martín-Aceña, 201–239. Madrid: Alianza.

    Google Scholar 

  • Maluquer de Motes, J. 2013. La inflación en España. Un índice de precios al consumo.1820–2012, Estudios de Historia Económica, 64. Madrid: Banco de España.

    Google Scholar 

  • Martín Seco, J.F. 1985. Los impuestos en España. Papeles de Economía 23: 266–272.

    Google Scholar 

  • Martín-Aceña, P. 2010. Economía y política durante la transición a la democracia en España, 1975–1985. Documentos de Trabajo Universidad de Alcalá, DT 02–10.

    Google Scholar 

  • Martín-Aceña, P., and F. Comín. 1991. INI: 50 años de industrialización en España. Madrid: Espasa Calpe.

    Google Scholar 

  • Martín-Aceña, P., Y. Blasco, and J. Cuevas. 2016. El Instituto de Crédito Oficial 1971–2015. Madrid: Dextra ediciones.

    Google Scholar 

  • Muñoz del Bustillo, R. 2010. La distribución funcional de la renta en España: Una visión desde la perspectiva del largo plazo. Gaceta Sindical Reflexión y Debate 9: 93–107.

    Google Scholar 

  • Navarro, M. 1990. Política de reconversión: balance crítico. Madrid: Eudema.

    Google Scholar 

  • OECD. Annual Report 1999

    Google Scholar 

  • Pan-Montojo, J. 2002. Política y gasto social en la transición, 1975–1982. Hacienda Pública Española, n° extra: 229–252.

    Google Scholar 

  • ———. 2015. Entre la reforma y las contrareformas: una historia política de la fiscalidad española en la democracia. In La evolución de la Hacienda Pública en Italia y España (siglo XVII–XXI), eds. C. Barciela, A. Di Vitorio, and J. Melgarejo, 557–590.

    Google Scholar 

  • Pons, J. and J. Silvestre. ed. 2010. Los origenes del Estado de Bienestar en España, 1900-1945: los seguros de accidentes, vejez y enfermedad. Zaragoza: Prensas Universitarias de Zaragoza.

    Google Scholar 

  • Poveda, R. 2011. La regulación y supervisión bancarias en los últimos 40 años. In Un siglo de historia del sistema financiero español, ed. J.L. Malo de Molina and P. Martín-Aceña, 241–294. Madrid: Alianza.

    Google Scholar 

  • Powell, Ch.2015. Spain: Transition by Transaction. In Democratic transitions: Conversation with World Leaders. ed. S. Bitar and A.F Lowenthal, 344-352. Baltimore: John Hopkins University Press

    Google Scholar 

  • Prados de la Escosura, L. 2008. Inequality, Poverty and the Kuznets Curve in Spain, 1850–2000. European Review of Economic History 12 (3): 287–324.

    Article  Google Scholar 

  • ———. 2017. Spanish Economic Growth 1850–2015. London: Palgrave Macmillan.

    Book  Google Scholar 

  • Reinhart, C., and H. Rogoff. 2008. This Time Is Different: A Panoramic View of Eight Centuries of Financial Crises. NBER Working Paper 13882.

    Google Scholar 

  • Rodríguez-Modroño, P., M. Matus-López, and L. Gálvez-Muñoz. 2016. Female Labor Force Participation, Inequality and Household Well-being in the Second Globalization. The Spanish Case. Working Papers in History and Economic Institutions 16.02.

    Google Scholar 

  • Rojo, L.A., and J. Pérez. 1977. La política monetaria en España. Madrid: Banco de España.

    Google Scholar 

  • Rubio, M., and B. Muñoz. 2018. Energía en transición. Seminario Para una Nueva Historia Económica de la Transición, September 27–28, 2018, Pamplona. Unpublished paper.

    Google Scholar 

  • Sáenz, E. 2008. La evolución del sector público español en el periodo 1960–2000. Acciones e Investigaciones Sociales 26: 45–61.

    Google Scholar 

  • San Segundo, M.J. 2003. El Gasto Público en Educación: 1975–2000. In El gasto público en la democracia: estudios en el XXV aniversario de la Constitución española de 1978, coords. S. Alvarez and J. Salinas, 191–222. Madrid: Ministerio de Hacienda, Instituto de Estudios Fiscales.

    Google Scholar 

  • Sanz, G. 2018. Pacto social y lucha obrera: trabajadores en Transición. Seminario Para una Nueva Historia Económica de la Transición, September 27–28, 2018, Pamplona. Unpublished paper.

    Google Scholar 

  • Simón, B. 1997. Las subvenciones a la industria en España. Una aplicación de la teoría de los grupos de presión. Madrid: CES.

    Google Scholar 

  • Skidelsky, R. 1978. The End of the Keynesian Era. London: Macmillan.

    Google Scholar 

  • Sola, J. 2014. El legado histórico franquista y el mercado de trabajo en España. RES 21: 99–125.

    Google Scholar 

  • Toharia, L. 1997. Labour Market Studies. Spain. Employment and Labour Market Series 1. European Commission.

    Google Scholar 

  • ———. 2003. El mercado de trabajo en España, 1978–2003. ICE 811: 203–220.

    Google Scholar 

  • Torregrosa, S. 2015. Did Democracy Bring Redistribution? Insights from the Spanish Tax System (1960–1990). European Review of Economic History 19 (3): 294–315.

    Google Scholar 

  • ———. 2018. Limits to Redistribution in Late Democratic Transitions: The Case of Spain. In Worlds of Taxation. The Political Economy of Taxing, Spending, and Redistribution since 1945, ed. G. Huerlimann and W.E. Brownlee, 321–348. London: Palgrave Macmillan.

    Chapter  Google Scholar 

  • Tortella, G., and J.L. García Ruíz. 2013. Spanish Money and Banking: A History. London: Palgrave Macmillan.

    Google Scholar 

  • Trullen i Thomas, J. 1993. Fundamentos económicos de la transición española. La política económica de los Acuerdos de la Moncloa. Madrid: Ministerio de Trabajo y Seguridad Social.

    Google Scholar 

  • Varela F. and Varela M. 2005. España y los organismos Internacionales. Información Comercial Española. 826, 167-177.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. University of Valencia, Valencia, Spain

    Joaquim Cuevas & María A. Pons

Authors
  1. Joaquim Cuevas
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. María A. Pons
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to María A. Pons .

Editor information

Editors and Affiliations

  1. University of Valencia, Valencia, Spain

    Concha Betrán

  2. University of Valencia, Valencia, Spain

    Maria A. Pons

Rights and permissions

Reprints and permissions

Copyright information

© 2020 The Author(s)

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Cuevas, J., Pons, M.A. (2020). 1977: Hopes Fulfilled—Building Democracy in Turbulent Economic Times. In: Betrán, C., Pons, M. (eds) Historical Turning Points in Spanish Economic Growth and Development, 1808–2008. Palgrave Studies in Economic History. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-40910-4_6

Download citation

  • DOI: https://doi.org/10.1007/978-3-030-40910-4_6

  • Published:

  • Publisher Name: Palgrave Macmillan, Cham

  • Print ISBN: 978-3-030-40909-8

  • Online ISBN: 978-3-030-40910-4

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

Publish with us

Policies and ethics

Search

Navigation