The Role of the Decentralization of Public Spending in the Autonomous Communities of Spain: 1988-1997

Decentralization of public spending in Spain has been one of the main landmarks in recent years in Spain and also in many different countries. The main objective of this article is to understand how Autonomous Communities have been benefited from this decentralization process. The classical assumption to speak about this topic 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, and in this sense it is used in the paper. The research include a general description of the decentralization process in Spain since 1984 to 1997, that clearly shows how Autonomous Communities are the great �winners� of that process. Afterwards, the paper goes deeper analyzing the evolution of the functional classification of spending in Autonomous Communities, trying to show if all regions have benefited the same from decentralization. The principal conclusion is that, so far, mainly political motives have justified in Spain the transference of competencies from the central to the regional government. Moreover, there is a great different among the Autonomous Communities with high level of competencies, which spend more on Social Assistance and Social Goods, and the ones with low level of competencies, which spend more on Spending on Other Services (production of economic public goods and economic regulation of productive sectors). Moreover, the analysis of the data is made in order to justify this evolution. The fiscal federalism theory can also enlighten our analysis from a theoretical point of view