Is Spain the most decentralized country in the world?

Marta Espasa
3 min

Recently President Rajoy and other members of the Popular Party have stated very strongly that Spain is the most decentralized country in the world. Is this true?

The first thing to recognize is that decentralization can be found both in unitary countries, that is those with two levels of government (central and local), and in federal countries with three levels of government (central, regional, and local).

Secondly, decentralization means that the central government transfers the ability to decide and manage certain policies to administrations closer to the citizens, as the regional and local governments are the ones that know the preferences and needs of their citizens better and can thereby better adapt policies to their preferences. In this way, decentralization generates higher levels of well-being than the centralized, uniform, and homogenous option, which does not take territorial differences into account.

Thirdly, in order to be effective, decentralization must be practised by means of both public spending and income. That is, if powers are devolved to the regional administrations then the necessary resources to finance them must also be transferred.

On an international scale, the most common indicator used to measure and compare the extent of fiscal decentralization is the percentage of spending by the subordinate regions versus total public spending. The latest figures from the OECD show that in 2012 the most decentralized country was Denmark, where local spending accounted for 62% of public spending, while the central Danish government only spent 38%. This was followed by Switzerland, with local spending at 58%; Sweden, with 49%; the United States with 47%; and Spain with 40%. Now, one thing is the spending managed by the subordinate governments, and the other is the ability to decide about spending policies. Obviously, this is a question that is very difficult to measure quantitatively, but qualitatively it is possible to show that there are great differences. In the decentralized European countries when a power is devolved, the ability to decide over that power is also transferred, and not only the obligation to handle spending and payments. If this were so, it would be an administrative, but not political, decentralization, and what really matters is precisely the political decentralization, which can be understood as the ability to decide.

In this sense, it is necessary to point out that decentralization implies, in essence, diversity in the design of policies, diversity in management, and also diversity in results. This is the value of decentralization --that the government in each territory, whether it is regional or municipal, is able to adapt itself better to the preferences of its citizens and make different policies. Well, the Spanish government and the main political parties don’t seem to understand this very well. In fact, more often than not, it seems to be quite the opposite. In Spain the principle of equality always prevails over the principle of autonomy, which is at the heart of decentralization. They start from the premise that regions don’t matter, and that Spanish citizens, wherever they live, must be treated equally. What’s the point of decentralization and devolved regional powers in Spain, then?

We see examples of this question every week, but the latest case is ridiculous. The Spanish government just presented an appeal to the Constitutional Court against the Catalan law on poverty and energy bills, arguing that it endorses a form of discrimination against citizens of other Spanish regions. I could understand it if the energy companies themselves took legal action against this law, although I wouldn’t share this view and I believe that it would conflict with their own corporate social responsibility. But what sense does it make that the Spanish government should challenge this regulation alleging discrimination between regions? Would they block other autonomous regions from enacting a similar regulation?

This simply shows that, once again, they do not understand what decentralization means. With these deeply rooted concepts of equality, homogeneity, and uniformity do they really believe that Spain is the most decentralized country in the world? Someone please explain this to me!

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