Is Decentralization Really Welfare Enhancing? Empirical Evidence from Survey Data (1994-2011)

Abstract

Decentralization is believed to constitute the optimal institutional arrangement for public good provision. In contrast to centralization, it is thought to offer a better match between provision and individual preferences. We test this hypothesis by analyzing the Spanish decentralization process undergone since 1980s exploiting survey data. A higher degree of satisfaction is expressed when education and health provision is assigned to the intermediate tier of government rather than to central government. This, however, is not recorded for largest regions or for the case of the justice administration, where the responsibility assigned to (some) regions is of a merely administrative nature.