The degree of fiscal decentralization in Spain is similar to main federal countries and greater than unitary ones. The demand of public sector decentralization is based on a supposed efficiency gains that is far from being obvious. Using a data set for the Spanish regions, we reject the null hypothesis of a significant relationship between growth in per capita gross domestic product (GDP) and expenditure distribution among fiscal administrations. Nonetheless, we find empirical support for a relationship between revenue decentralization, far less advanced than the expenditure one, and growth. In both cases we do reject the null hypothesis of a nonlinear linkage between fiscal decentralization and growth in per capita GDP.
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Cantarero et al. (2009) studied this question.
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