Analysis of the Decentralization of Public Spending in Spain

Abstract

This paper studies the decentralization process of public spending in Spain, which has been one of the main landmarks in recent years, and not only in Spain but also in many different countries. the classical assumption to speak about this kind of processes is the theory of fiscal federalism. However, nowadays this theory is considered more as a set of general “guidelines” than a practical rule of application.

To undertake this study the article proposes a new method to describe the outcomes of the decentralization process through the functional classification of spending. the analysis of the data in each level of government -central, regional and local- is made in order to justify the process. So far, mainly political motives have justified the transference of competencies from the central to the regional and local governments in Spain. the fiscal federalism theory can enlighten our analysis from a theoretical point of view.