Effects of decentralization on public infrastructure accumulation: The case of Spain

Abstract

Background: Spain is a highly decentralized country. Recently the debate on decentralization has been reinforced by the claim of independence led by the authorities of the government of Catalonia. In addition, the statements of some politicians in favor and against advancing in the decentralization process have contributed to such a controversial debate. The allocation of public infrastructure is not out of this debate. Methodology: A non-linear equation is specifed that allows to control for the traditional criteria for allocating public infrastructure: regional development, special infrastructure needs, efficiency or productivity of public capital stock and political effects. Results: The fnancial autonomy and transferred competences positively affect the accumulation of regional public infrastructure. However, their marginal contributions are decreasing. Conclusions: The empirical evidence could be suggesting thresholds in the decentralization process. The results related to fnancial autonomy are much stronger for the autonomous communities that are considered to be lagging behind in the fscal decentralization. Moreover, the rest of the communities exhibit stronger results for the proxy that captures administrative decentralization.