In Spain, regional problems have merited particular attention since the start of the broad-ranging political and administrative decentralization process envisaged in the 1978 Constitution. In the economic terrain, the four issues most commonly addressed in studies and debates are regional growth and its sources, regional economic policies and their effects, autonomous community financing and indebtedness, and the results of public-sector territorial activities (fiscal balances).

The research project this book is based on sought to take a step further in two respects. Firstly, by generating fresh information on public-sector activity in Spain and its regions and, secondly, by analyzing the data obtained in order to gain a more detailed picture of the extent of this activity, the reasons underlying regional differences, and their implications in terms of inter-territorial solidarity and economic efficiency.

The results call into question the widespread contention that decentralization has burdened Spain with an excessive spending bill. In fact they tend to support the alternative argument to the effect that the public sector’s territorial activity is notably uneven, and does not respond to clear-cut patterns or criteria of need, but rather to causes that have more to do with each region’s historical trajectory and its capacity to influence central government decisions. These fiscal differences and asymmetries do not mean there is no inter-regional solidarity, but they do blur the picture in the sense that regions confronting similar problems are not receiving the same treatment. As to how public expenditure contributes to economic efficiency, there is no denying that it has spurred on regional development, but more by permanently shoring up demand in certain regions than by securing across-the-board improvements in productivity.

It is important to stress that these findings reflect general government activity and programs, and not only those of the regional authorities. The data presented will give readers a better understanding of their territorial impact, as well as providing useful design input for the public-sector resizing and reorganization required to get the Spanish economy back to sustainable growth.