Searching for the optimal territorial structure: the case of Spanish provincial councils

Modern states are organized in multilevel governance structures with economic and political authorities dispersed across them. However, although there is relatively widespread consensus that this form of organization is preferable to a centralized authority, the same cannot be said about its jurisdictional design – that is, how to transfer authority from central states to both supra- and subnational levels. This lack of consensus also exists in contexts with explicit initiatives to strengthen political ties such as the European Union (EU), and even within EU member countries, a situation which is aggravated by the relative scarcity of contributions that measure the advantages and disadvantages of different territorial organizations. We explore these issues through a study of one EU country, Spain, whose provincial councils (diputaciones) are often the subject of debate and controversy due to their contribution to increasing public spending and their purported inefficiencies, corruption and lack of transparency. Specifically, we combine a variety of activity analysis techniques to evaluate how they impact on local government performance. Results suggest that, in general, the presence of a provincial council has a positive impact on local government performance, but when their activity levels are too high, the effect can become pernicious.