Since the end of the 1970s, Spain has undergone a major decentralization process along with its democratization. Spain is an appropriate country case to apply the theory of this book because it has a particular territorial governance structure that combines characteristics of a unitary and a federal country, which has important implications regarding fiscal and social policies that impact income inequality. Furthermore, its service provision is highly decentralized, and the territorial governance structure carries both centralized and decentralized characteristics. In my typology of four European countries in this book, I classify Spain as a “de facto federal—low/medium-interactive governance” state. The first classification comes from its constitutional status: Spain is in the de facto federal category although it is constitutionally a unitary state, as I will elaborate on in the following subsection. The categorization regarding the level of interactive governance is based on my own elaboration.