Spanish Decentralization and Fiscal Federalism

This chapter offers a general perspective of the intense process of decentralization occurring in Spain over the last 36 years, attempting to describe its principal highlights and drawbacks. Following some historical notes and a brief summary of the principles of fiscal federalism, the chapter describes the decentralization process in terms of the degree of decentralization and the devolution of competences on both the expenditure and revenue sides, paying special attention to the Basque Country financial system (‘Concierto’). In another section, the chapter introduces an evaluation of the process and some explanations of the difficult present situation in Spain related to the economic crisis and territorial tensions, mainly with regard to Catalonian demands for independence. The chapter ends with some reflections on the main present contradictions and perspectives.