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Special issue article: Interrogating urban crisis: Governance, contestation and critique
Urban Studies
2017, Vol. 54(9) 2107–2122
ÓUrban Studies Journal Limited 2016
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DOI: 10.1177/0042098016669452
journals.sagepub.com/home/usj
Urban governance in Spain: From
democratic transition to austerity
policies
Marc Martı
´-Costa
FLACSO Ecuador, Ecuador
Mariona Toma
`s
University of Barcelona, Spain
Abstract
This article aims to explain the evolution of urban governance in Spain during the last 40 years as
a product of different waves of state rescaling. Historical, political and economic specificities
shape the evolution of Spanish urban governance, especially because of the recent process of
democratic transition, regional decentralisation and the specific process of de-industrialisation.
We distinguish three periods in urban governance trends, from the restoration of democracy in
the late 1970s to the current austerity urbanism marked by the economic crisis starting in 2008.
For each phase, we highlight the three interrelated factors explaining urban governance: (1) the
evolution of the Spanish political economy in the transition from Fordism to post-Fordism; (2)
the evolution of the welfare state; and (3) the role of urban social movements.
Keywords
austerity urbanism, Spain, state restructuring, urban governance
Received February 2015; accepted August 2016
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Introduction
Urban governance can be understood as a
process of coordination between public and
private interests focusing on the systems of
values, norms and practices that explain its
different models (Pierre, 1999). But urban
governance cannot be fully understood with-
out taking into account the evolution of the
state in late capitalism. Abundant literature
has examined the different phases of the
transformations of the state and their impact
on the cities. Recently, the concept of ‘urban
austerity’ (Peck, 2012) has been used to
describe the latest round of neoliberal
changes in urban governance as a conse-
quence of the economic crisis, which started
in 2008 (both in Europe and America).
However, the analysis of the state’s evolu-
tion and its impact on urban governance
focuses mainly on the experiences of the
USA and of the UK. In Southern European
countries such as Spain, these phases do not
fit in with the evolution of the contemporary
state, as for example in the development of
the Welfare state (Andreotti et al., 2001).
This gap in timing is mainly due to historical
and political reasons: the consolidation of a
democratic system after a dictatorial period
has been slow and difficult in Southern
Europe.
In Spain, there is a lack of understanding
of how this process has affected urban gov-
ernance (see for instance Charnock et al.,
2014). The need for such analysis is far more
significant taking into account that Spanish
cities have been especially hit by the eco-
nomic crisis (Subirats and Martı
´-Costa,
2015). Our contribution seeks to fill this gap
by providing a better understanding of the
evolution of urban governance in Spain as
well as unveiling how the economic crisis
and later political arrangements became the
stage for state rescaling struggles. Indeed, we
believe that in the last 40 years the evolution
of urban governance in Spain has resulted
from different waves of state rescaling.
Taking Brenner’s (2004) analysis on urban
governance as a starting point, we rework
the causal mechanism he uses to explain the
transformation of urban governance as a
venue for (and product of) state rescaling.
Besides Brenner’s emphasis on the accumu-
lation regime (overcoming the crisis of accu-
mulation via state rescaling), we highlight
two other elements that are missing from
his logic of periodisation: the evolution of
the welfare state and the role of social
movements.
The Spanish case shows the potential
dynamics that lie beneath the logic of varia-
tion, across Europe at least: the institutional
configuration of the state and the role of
resistance/discontent. In this account, the
term crisis also goes beyond the crisis of an
accumulation regime, to embrace the legiti-
macy dimension (the legitimacy of the politi-
cal regime: the first round of rescaling, the
1960s and the 1970s in particular), and thus
the role of ‘discontent’ (as a response to eco-
nomic and political/social crises) in remould-
ing the urban governance structure
(combined with welfare regime changes).
Understanding contemporary
urban governance
The analysis of urban governance must be
set in the broader context of how state and
its territoriality are changing in late capital-
ism. From the political economy approach
(Goodwin and Painter, 1996; Hall and
Hubbard, 1998; Harvey, 1989; etc.), one of
Corresponding author:
Marc Martı
´-Costa, Department of Public Affairs, FLACSO Ecuador, La Pradera E7-174, Piso 7, torre II, Quito, Pichincha
170516, Ecuador.
Email: marc.martic@gmail.com
2108 Urban Studies 54(9)
the well-known contributions to the study of
urban governance is to explain the shift
from managerialism to entrepreneurialism.
Harvey (1989) highlighted three main char-
acteristics of the emerging urban entrepre-
neurialism in the USA and the UK in the
1970s: the use of public–private partnerships
in order to attract investments; risk-
absorption by the public institutions when
risky private financial activities fail, and,
finally, the centrality of place-specific proj-
ects instead of more redistributive policies.
At the same time, changes in urban gov-
ernance can be seen not only through the
lens of urban entrepreneurialism but also
from the perspective of ‘state spatial restruc-
turing’ (Brenner, 1999, 2004) under neoliber-
alism. Usually, state rescaling is summarised
as the process of the redistribution of com-
petences and powers from the state to new
supranational (European Union, EU) and
subnational (regional and local) levels as a
process of ‘hollowing out’ the classic
national-state form (Rhodes, 1997). Indeed,
the process of devolution from central and
regional governments to local level has also
been seen as a common feature of neoliber-
alism (Brenner 1999; Hackworth, 2007;
Harvey, 2012; Macleod and Goodwin,
1999). Nevertheless, rescaling is not a linear
process, insofar as spatial scales are actively
and socially constructed (Swyngedouw,
1997). In this line of thought, national scale
is reconfigured in relation to other scales
through political conflicts and regulatory
experimentation (Jessop, 2000). In the cur-
rent era of austerity, three important conse-
quences can be attributed to this process of
rescaling (Peck, 2012): (1) The intensifica-
tion of uneven socio-spatial development
(Peck, 2012: 633). As a result of the weaken-
ing of redistributive mechanisms of the
Keynesian state, cities have become more
reliant on their own limited resources. Cities
with a more diverse and vigorous economic
base cope better with cuts in public spending
at national level than others that have less
room for avoiding cuts and privatisations;
(2) changes in the multilevel hierarchies of
the state can be observed beyond the process
of devolution. As Peck (2012: 632) states:
‘systemic conditions of fiscal restraint serve
to reinforce the hierarchical powers of bud-
get chiefs and audit regimes’; (3) increasing
difficulties for delivering local policy solu-
tions. This occurs because local governments
need to be seen as acting locally when in fact
their institutional and fiscal capacity is
increasingly restricted.
Responses and conflicts between the mul-
tiscalar hierarchies of the state can be
observed more clearly during economic
crises but a broader and bigger picture of
the evolution of urban governance is needed
to understand these changes and conflicts.
Current economic crises are rooted in
changes and the unresolved problems of the
past. In this regard, Brenner’s (2004) period-
isation of urban governance in Western
Europe from the early 1960s to the 2000s is
useful. He describes a transition from an his-
torical context where the state promoted
economic development across the national
territory towards a situation where national
governments prioritised capacities and
advanced infrastructure in the most compet-
itive cities and territories. In each phase,
state institutions and policies privileged par-
ticular spaces, locations and scales, referred
to by Brenner as ‘state spatial selectivity’,
where different types of urban-regional regu-
lations are hegemonic.
This process has taken place in parallel to
the emergence of neoliberalism during the
1970s, defined as a sociopolitical process
that ‘prioritizes market-based, market-
oriented or market-disciplinary responses to
regulatory problems; it strives to intensify
commodification in all realms of social life;
and it often mobilizes speculative financial
instruments to open up new areas for capi-
talist profit-making’ (Brenner et al., 2010:
Martı
´-Costa and Toma
`s2109
329–330). Contrary to the assumption that
neoliberalism is a coherent and fully formed
project expanded through globalisation,
these authors stress the ‘variegated’ charac-
ter of the process of neoliberalisation.
Brenner et al. (2010) argue that this process
creates an uneven pattern of development
and is a result of a constant ongoing colli-
sion between neoliberalisation projects and
‘inherited politico-institutional arrange-
ments’ (2010: 331) on multiple scales.
However, despite this general picture and
recognising the intrinsic ‘variegation’ of neo-
liberalism, there is still no explanation of
variegation in the ‘inherited politico-
institutional arrangements’ that collide with,
or are embedded in, neoliberal projects. In
this sense, the analysis of urban governance
from a political economy approach needs to
be complemented by other perspectives, tak-
ing into account the specificities of national
and local institutional settings and the rela-
tion between stakeholders at multiple scales.
Pierre (1999) highlights national politics
and state traditions that establish local and
urban politics as the most important factors
explaining variegation. According to him,
‘economic, social, political, and historical
factors pertaining to the exchanges between
the local state and the local civil society’
(Pierre, 1999: 375) are useful to understand
the different inherited politico-institutional
arrangements. Other authors like DiGaetano
and Strom (2003) stress that national and
local institutions filter the changes in the
structural context such as the process of glo-
balisation (enhanced urban competitiveness
between cities) and state restructuring
(mainly the process of devolution). Local
leaders and political entrepreneurs are also
key elements in understanding forms of
urban governance (DiGaetano and Strom
2003; Lowndes, 2005) because they are able
to bring previously marginal groups into
new alliances with a view to changing
institutions.
In this regard, urban social movements
have played a key role in the relationship
between local government and local civil
society. Mayer (2009) makes a historical
reading of urban social movements distin-
guishing two different types. On the one
hand, there are those movements contextua-
lised in the Fordist city which address their
demands towards institutions so as to
improve social reproduction and collective
consumption. On the other hand, Mayer
depicts a post-Fordist scenario where there
is a greater diversity of demands and forms
of collective action. Some of them even
actively participate in the rollout moments
of pro-market regulation; they become
important in covering welfare services that
are not provided by the state. Other strug-
gles have openly been placed against neolib-
eral urbanism, such as major urban projects,
privatisation or campaigns against gentrifi-
cation. With the emergence of the Occupy or
the 15-M movements in Spain, there is
greater connectivity between local struggles
that combine the traditions of autonomy,
the defence of public services and the defence
of radical democratic forms of government.
In short: there are not only the pro-market
forces operating over the post-Second World
War welfare institutions. In this interplay
there are also social forces that not only
defend social services but also try to rethink
welfare institutions in a paradigm that dis-
tances these changes from neoliberalism.
Given these considerations, our hypothesis
is that the Spanish case shows a similar trend
towards embracing neoliberalism but the way
this process has been carried out is charac-
terised by the role of urban social movements
and the importance of inherited political-
institutional arrangements. In other words,
the multiscalar relationships between
national, regional and local institutions and
actors framed in a global process of state
restructuring explain the evolution of urban
governance, which presents some differences
2110 Urban Studies 54(9)
compared to the UK and the USA. In the
Anglo Saxon context, the Thatcher and
Reagan governments in the 1980s officially
opened the neoliberal era. Conversely, in
Spain, together with Greece and Portugal, it
is during the end of the 1970s and throughout
the 1980s that the bases of the Mediterranean
welfare state were laid (Guille
´nandLeo
´n,
2011). In the Spanish case, the expansion of
the welfare state cannot be separated from
the process of decentralisation from state to
regional governments. As it is an uneven pro-
cess of devolution, some regional govern-
ments play a key role in the urbanisation of
the territory but also in providing welfare
(Gallego and Subirats, 2011).
In summary, in order to understand the
mutations of urban governance in the
Spanish case we must address three interre-
lated issues already mentioned:
(1) A common starting point in the neo-
Marxist literature on urban governance
is to set the birth of urban entrepre-
neurialism in the transition from
Fordism to post-Fordism. We look at
the evolution of the Spanish political
economy in this transition taking into
account the multiple rescaling pro-
cesses. The transition from a late-
industrial to a services economy is
characterised in Spain by the config-
uration of private oligopolies in the
field of banking and basic services
(electricity, water, telephony .), the
internationalisation of leading indus-
tries such as the automobile and the
growing importance of the construc-
tion and tourist sectors. In this evolu-
tion we will pay special attention to the
development of state spatial selectivity
where European integration, regional
decentralisation and the emergence of
some Spanish global cities are impor-
tant drivers of change of multilevel
governance in each phase.
(2) The evolution of the welfare state. As
mentioned before, most of the literature
assumes that the progress of neoliberal-
ism is built on dismantling or reconfi-
guring post-Second World War welfare
arrangements. When reading critical
urban theory, one may have the impres-
sion that at a certain point of time wel-
fare services were just privatised or
reconfigured to rule in favour of pro-
market agents, assuming that this pro-
cess is ‘variegated’. In the Spanish case
we see a much more complex scenario
where welfare institutions and services
are expanding (at least until 2008) while
at the same time some are externalised
or dismantled depending on the eco-
nomic growth and the political orienta-
tion of the ruling governments at
national, regional or local levels.
(3) Finally, the role of urban social move-
ments has been highlighted as essential
for their opposition to or participation
in the consolidation of cities’ neoliberal
trends. In Spain, urban social move-
ments were crucial to organise demo-
cratic opposition to the dictatorial
regime, to put into question the success
of ‘desarrollismo’ for working-class liv-
ing conditions, and to lay down the pol-
icies of the new local governments
during the 1970s. Although in the 1980s
and 1990s they had a more ambivalent
role in relation to urban entrepreneuri-
alism, currently social movements have
been crucial to organise opposition to
austerity measures and to lead new
political coalitions to the main cities in
Spain and the regional governments.
On the basis of the above framework of
analysis, in this article we discuss Spain’s
rescaling story, ultimately to explain how
the post-2008 austerity policies have shaped
the landscape of urban governance in this
country.
Martı
´-Costa and Toma
`s2111
Urban governance and state
rescaling in Spain
The Spanish Constitution of 1978 trans-
formed the basic territorial structure in
Spain. As in other European countries, the
decentralisation process started in the early
1980s resulted in progressive regionalisation
or the rise of stronger levels of subnational
government. The state is territorially orga-
nised into three levels of government: central
government, the regional tier or the
Comunidades Auto
´nomas (CCAA) and the
local tier (formed by 8114 municipalities and
50 provinces). Except for pensions and
unemployment benefits, regional govern-
ments are responsible today for four pillars
of the Welfare state (education, health and
social services) (Gallego and Subirats, 2011).
Indeed, around 75% of CCAA’s budgets
goes on healthcare, education and welfare
systems. Overall, subnational governments
are in charge of approximately 50% of the
total budget devoted to welfare services (Del
Pino and Pavolini, 2015: 248–250).
Taking these three interrelated factors
into account, we identify three main periods
in which there is a process of gradual trans-
formation of urban governance in Spain:
democratic transition in the late 1970s and
early 1980s; urban entrepreneurialism
between the late 1980s and 2007; economic
crisis and urban austerity policies since 2008.
New democratic governments and
asymmetrical Keynesianism
Brenner (2004) labelled the phase between
1960 and 1970 as ‘spatial Keynesianism’
where national states promoted economic
development by spreading industry, popula-
tion and investment across the national terri-
tory while local governments were in charge
of the provision of the collective consump-
tion. The following phase in ‘Western
Europe’ is ‘Fordism in crisis’ (1970–1980),
where new urban and regional policies were
introduced to address the industrial decline
whereas national state maintained its redis-
tributive project. However, in the Spanish
case, the crisis of Fordism is prior to the
development of the modern welfare state
and the process of devolution is simulta-
neous with the development of the welfare
state. This is a significant singularity in rela-
tion to Brenner’s periodisation.
The crisis of Fordism during the 1970s–
1980s hit different regions of Spain
unequally. It affected mainly industrial
regions such as Asturias and the Basque
Country, but also Madrid, Insular terri-
tories, the Mediterranean Coast and north-
eastern regions. The destruction of jobs
affected both the industrial (iron and steel,
naval, textile) and the agricultural sectors (in
the poorer regions). In response, the central
government implemented focused regional
policies and inter-regional solidarity funds
to mitigate the consequences of the Fordist
crisis. Such funds became insufficient to
counteract the effects of the crisis and gradu-
ally faded away because of the process of
regional decentralisation and the increasing
importance of the structural funds of the
EU: ‘With the consolidation of the State of
the Autonomies and European Community
integration, the central government seems
increasingly detached from its responsibil-
ities in territorial balancing policies’
(Etxezarreta, 1991: 305; authors’ transla-
tion). Indeed, there is neither a constant nor
a successful territorial policy seeking to
reduce regional inequalities. We can label
this period as one of ‘asymmetrical
Keynesianism’, as a result of asymmetrical
regional devolution and the inefficiency of
regional state politics in dealing with the
uneven regional impacts of the industrial cri-
sis of the 1970s–1980s.
The late 1970s are a clear moment of
institutional change with the shift from a
dictatorship to a decentralised democratic
2112 Urban Studies 54(9)
state. The process of decentralisation to the
CCAA was parallel to the development of
the Welfare state, which took place later but
quicker than the European average (Guille
´n
and Leo
´n, 2011). Moreover, devolution has
been an asymmetrical process among the
regions with varying speeds and levels of
intensity (Subirats and Gallego, 2002). For
instance, competences on health were trans-
ferred to Catalonia, the Basque Country,
Navarra, Andalusia, Valencia, Galicia and
the Canary Islands in the early 1980s, while
the transfer of health jurisdiction to the
other ten CCAA only occurred in 2001.
A final important element in shaping
urban governance in this period is the role of
urban social movements, an element missing
from Brenner’s periodisation. In the 1970s
and early 1980s, the urban agenda was con-
strained by the structural deficits from the
dictatorship as a result of rapid growth in
the main cities (Madrid, Barcelona, Bilbao,
Zaragoza, Valencia) during the industrialisa-
tion of the 1960s: there was a chaotic and
disjointed urban configuration without any
kind of comprehensive planning. The inher-
ited politico-institutional arrangements at
local level implied an internal reorganisation
of local governments in the 1980s with three
main objectives: (1) to deliver more redistri-
butive policies, (2) to ensure greater citizen
participation, and (3) the use of urbanism
and planning to regulate growth and
improve the living conditions in working-
class neighbourhoods hit by the crisis. Cities
were modernised and transformed in this
first democratic period, resulting in a better
quality of life for their inhabitants with
regard to public spaces, local services and
housing (Iglesias et al., 2011).
In this period, urban social movements
demanded an improvement in public and
urban services and were highly active. These
movements can be understood as a reaction
to the crisis of the Fordist city (Mayer, 2009)
and, in the Spanish context, the fight for
democracy. Community members, left-wing
parties, intellectuals and technicians formed
a citizens’ alliance that was crucial for the
development of new democratic urban poli-
cies. After the first democratic local elections
in 1979, some of these organised groups,
such as neighbourhood associations, lost
their strength since some of their leaders
joined political parties and local administra-
tions. In the new institutional framework of
the Spanish Constitution, the new political
parties who were elected to local councils
started a process of a gradual transforma-
tion of the inherited local institutions.
In summary, we have labelled this initial
phase asymmetrical Keynesianism for two
reasons. First, because of the unequal
response of the central state to the crisis of
Spanish Fordism. Second, because of the
model of political decentralisation designed
by the 1978 Constitution where some regions
had more responsibilities than others. This
created a new model of intergovernmental
relations between localities, regions and cen-
tral government. At the same time, local
governments became the main venue for pol-
icy change in the transition from dictator-
ship to democracy. This process was driven
by urban social movements and left-wing
political parties as a response to the urban
crisis of central state-led Fordism.
Urban and regional entrepreneurialism
This period spans from 1986 to 2008 and can
be divided into three subperiods: the expan-
sion of the late 1980s (1986–1992), the crisis
of the 1990s (1993–1996), and the great eco-
nomic expansion (starting in 1997 and espe-
cially intense between 2000 and 2007).
Spain’s entry to the EEC in 1986 and the
industrial crisis shaped the first subperiod of
the transformation of Spanish society and
urban policies. In order to deal with the crisis
of the 1970s, the national government
imposed deflationary policies to restructure
Martı
´-Costa and Toma
`s2113
industry, restore profitability and attract for-
eign investment (Charnock et al., 2014). This
meant the closure or drastic reduction of
heavy industries (integrated steel, speciality
steel, shipbuilding and household appli-
ances) and a process of the decline in real
wages through the introduction of new flex-
ible types of contracts. In contrast to other
European countries, and with the exception
of the automobile industry, there was no
major investment in the automated manufac-
turing processes because of the small scale of
the industries that remained in the process of
industrial restructuration. Because of rela-
tively low labour costs, the undervalued
industrial assets and the large domestic mar-
ket, Spain became an attractive country for
foreign investment. According to Liberman
(1995: 338, cited by Charnock et al.,
2014: 56) by 1991, foreign capital controlled
97% of Spain’s information processing
industry, 95% of the country’s automobile
manufacturing industry, 90% of its electro-
nics industry, and 41% of food processing
firms. The strategy of the state was ‘to con-
centrate and centralize capital in banking,
utilities, and energy, and the politics of eco-
nomic management in the context of dein-
dustrialization, fiscal expansionism, and the
growing intransigence of the main trade
unions’ (Charnock et al., 2014: 59). This evo-
lution created a dualism in the Spanish eco-
nomic structure. On the one hand, there
were state-protected sectors that gained
investments and acquired a sufficient scale to
start a process of internationalisation. In
contrast, a vast amount of medium and
small domestic factories in clusters and
agglomeration economies in the metropoli-
tan areas of Valencia, Barcelona or Madrid
survived the increasing competitive pressure
because of low wages and informal labour as
suppliers for automobile companies or tak-
ing advantage of their location. Besides, the
profitable investments of a growing sector
such as construction or tourism and the
development of the regional welfare services
consolidated the transition from an industry-
based to a services-oriented economy.
Many left-wing local governments that
stayed in power during the 1980s were pro-
gressively replaced by right-wing govern-
ments, with the important exception of
Barcelona. The new policy orientations con-
verged towards the cultural and recreational
dimension of cities, conceived as new centres
of attraction for tourism and leisure. At the
end of the 1980s, some forms of public–
private cooperation started to develop in
many cities, especially through the private
management of public services.
The effects of the economic recession of
the early 1990s limited the possibilities of
new city projects until 1994–1995. In the
mid-1990s, the development of mega-
projects linked to international events facili-
tated the entry of private-sector capital into
public management, although it is worth
noting that there was significant state con-
trol over the investments. The simultaneous
development of the Universal Exposition in
Seville, the Olympic Games in Barcelona or
the Guggenheim Museum in Bilbao clearly
shows the transition from Asymmetrical
Keynesianism to the Glocalisation Strategies
phase in Spain. In this context, the tradi-
tional urban social movements fighting for
public services and equipment were replaced
by new social movements focusing on issues
such as feminism, immigration and racism,
the environment and the ageing population.
Many of them were progressively institutio-
nalised, subsidised and part of the outsour-
cing services of the local or regional state.
At the same time, together with the squatter
movement, some protest movements
appeared as a reaction to the destruction of
natural sites, urban centres or urban
reforms, linking the urban to environmental
concerns (Iglesias et al., 2011). To sum up,
in this period urban social movements chan-
ged in their nature: they were progressively
2114 Urban Studies 54(9)
institutionalised and related to the fight
against urban speculation.
While 1997 is the starting point of eco-
nomic expansion, the period between 2000
and 2007 is characterised by sustained eco-
nomic growth, at an average rate of 4% per
year (Charnock et al., 2014: 69). This eco-
nomic growth is explained by the develop-
ment of the construction and housing sector
(organised around public investment in
infrastructure and urban development),
especially intense around the Madrid urban
region, the peripheries of large and medium
cities and along the entire Mediterranean
coast (Garcı
´a, 2010; Romero, 2010). New
land policies enabling urbanisation had pre-
viously been approved in some CCAA, like
in Comunidad Valenciana, where in 1994 the
regional government passed a new planning
Act favouring private initiatives in the pro-
cess of planning and urbanisation (Iglesias
et al., 2011). Here we find a clear example of
neoliberal ‘regulatory experimentation’ and
‘interspatial policy transfer’ (Brenner et al.,
2010), first tested in a region and then
applied as an umbrella to the whole country
by the same political party. Indeed, the
Spanish law regulating land regime passed in
1998 by the Popular Party (PP) introduced a
relevant regulatory change whereby all land
was considered urban or potentially urban if
it was not explicitly protected (Coq-Huelva,
2013).
In this phase, many general plans were
revised and new infrastructures linking
major metropolitan areas were designed,
with the support of the state, the EU and
regional governments. Additionally, the
high-speed train network was developed to
reduce travel times between all of the provin-
cial capitals in the country and Madrid. The
political aim of centralising rail connections
was also accompanied by the consolidation
of Madrid’s airport as an international hub
(Albalate and Bel, 2012), consolidating ‘state
spatial selectivity’ focusing on its capital.
Cities tried to specialise while diversifying
their economic base in the context of globali-
sation. Leisure and business tourism
remained important for many of them; it
was especially enhanced by the creation of
competition to host international events
such as Formula 1, cultural events, major
fairs or the Olympic Games. Most of these
events were associated with mega-projects
designed by famous architects with the
objective of creating new symbolic references
to the city to legitimise ongoing projects, the
best example of this being the city of
Valencia (Iglesias et al., 2011). The logistic
sector was also growing in port cities, while
urban projects pursuing economic specialisa-
tion in intensive knowledge sectors were also
emerging.
One example of a city’s specialisation is
that of Madrid. The capital of the Spanish
state underwent a major change because of
its particular insertion into the international
capital flows and its transformation into a
new node in the global economy
(Observatorio Metropolitano, 2007). The
strengthening of Madrid as a global finan-
cial and business node began with the 1992
Maastricht Treaty, the creation of a single
European market in services and energy and
the subsequent monetary union. Thus, the
state began a policy to privatise the major
public utilities and energy companies (such
as Telefo
´nica, Repsol and Endesa) and
banks, most of them located in Madrid,
which held a privileged position in the
domestic market. Besides these companies,
we should add the big construction compa-
nies that also internationalised over the
years (Sacyr, OHL, Ferrovial, Acciona, etc.)
thanks to the extraordinary benefits of the
Spanish infrastructural and residential boom
(Charnock et al., 2014: 76–77).
Throughout the 1990s another important
structural change took place in Spain: finan-
cialisation (Coq-Huelva, 2013). The finan-
cialisation of domestic economies occurred
Martı
´-Costa and Toma
`s2115
through mortgages and the investment of
family savings in real estate properties.
Robert Brenner (2009) labelled this process
‘asset-price Keynesianism’ where individual
investment in financial assets replaced the
traditional forms of mutualising the risk by
the post-war Keynesianist state. However,
welfare policies in Spain were not reduced in
other fields, some of them were expanded.
For instance, the central government intro-
duced support for care for the elderly and
the disabled (Law on Dependency, 2006).
This last phase of the urban entrepre-
neurialism period is categorised by the
increasing use of Glocalisation Strategies by
the biggest cities with the simultaneous
expansion of urbanisation in the Madrid
region and along the coast. Regional gov-
ernments progressively replaced the central
government in its entrepreneurial efforts to
favour market logics and to keep cities
active in inter-urban competition (Lobao
et al., 2009). This leap is not directed by the
central state in the Spanish case but with the
process of decentralisation and the increased
autonomy of regional governments, some-
times competing against other regions. Two
examples of this trend would be the role of
saving banks and the case of the Spanair air-
line. The regional saving banks played a fun-
damental role in the urbanisation process by
lending to the developers and giving mort-
gages to future homeowners. These banks
were highly politicised by the regional gov-
ernments and helped decide which projects
should be funded (Rodriguez et al., 2011).
The other case is the investment of 173 mil-
lion euros from 2009 to 2011 by the Catalan
government and Barcelona Local Authority
to control the Spanair airline in order to
promote Barcelona Airport as an interconti-
nental hub competing with Madrid airport
(Iglesias et al., 2011).
At the same time, regional governments
increased their competences in education
and health. Indeed, the full transfer of health
jurisdiction only occurred in 2001, when the
INSALUD (Spanish Health Institute) ser-
vices were transferred to all the CCAA.
Therefore, we find parallel processes of
urban/regional entrepreneurialism and of
welfare development, depending on the city
and the region. Apparently contradictory,
competition for investments in physical
infrastructure to enhance regional entrepre-
neurialism go hand-in-hand with the compe-
tition among the regions for state’s
redistribution of regional welfare services. In
fact, this has been the engine behind the
development of the Spanish welfare state.
Moreover, regions manage these funds dif-
ferently. In some regions there has been a
progressive outsourcing of service delivery
while others have maintained their public
character. In the case of local governments,
we also find this differentiation: in some cit-
ies the welfare state has been expanded to
preschool education and in others it has not.
Throughout the process of decentralisation
a greater diversity of ways of managing wel-
fare policies is detected: ‘The regions have
become the privileged managers of a set of
basic social rights and resource centres to be
exploited by the entrepreneurial sectors. The
regions and, more specifically, their execu-
tive bodies and administrators have become
veritable power nuclei in highly specific
sectors, playing a determinant role in key
areas of welfare’ (Gallego and Subirats,
2011: 112).
In summary, the 1990s represent a period
of deep political, economic and interscalar
changes. This decade signifies an important
political shift from the Socialist to the
Conservative party in many regional govern-
ments, cities and the national government.
The emergence from the crisis of 1992–1993
was made possible by strengthening the eco-
nomic model introduced at the end of the
1980s and mainly because of financialisation
with a rescaling of entrepreneurialism from
local to regional governments in some
2116 Urban Studies 54(9)
regions and an increasing role of Madrid as
global city. At the same time, instead of a
retrenchment of the welfare state we see an
expansion in some fields and local and
regional variegation in relation to the man-
agement of welfare services.
Economic crisis and austerity policies
The last phase illustrates the impact of the
crisis and the subsequent austerity policies
imposed by the EU but especially how insti-
tutions filter these economic changes
through the multilevel setting that defines
the Spanish state. The EU was a key player
in imposing an austerity regime in Spain,
which officially started with the reform of
the Spanish Constitution in 2011. The
regions, principally responsible for welfare
services, were the levels of government to be
most affected by the cuts. Moreover, a pro-
cess of re-centralisation started at the
expense of local governments. In response, a
new plural movement (15M, Indignados)
burst onto the political scene and in the fol-
lowing local elections a plural coalition of
actors reached the government of the main
cities of the country creating translocal net-
works between them.
This period began with the economic cri-
sis of 2008 and can be divided into two
parts. In the first (2009–2011), unemploy-
ment soared, especially in those municipali-
ties with a greater dependence on the
construction sector, such as the metropolitan
municipalities of Madrid and those on the
Mediterranean coast (for more details see
Blanco and Leo
´n, 2017, this issue). At the
same time, towns and cities began to notice
a decline in revenue from the real estate sec-
tor that helped to cover ordinary expenses.
In consequence, the central government
launched Plan E (Spanish Plan to Stimulate
the Economy and Employment) with a bud-
get of around 40 billion euros. Among the
measures to promote employment, the Local
Investment Fund (8 billion euros) stands out
because of its impact on local governments,
who chose the projects for funding. The
fund was used for the rehabilitation of build-
ings, improvements in public spaces and
facilities and infrastructure projects (water
supply and sanitation, public transport and
sustainable mobility, waste collection and
recycling, etc.) (Valle
´s and Maravall, 2010).
This stage is characterised by the state ini-
tiative of public contra-cyclical investment
policies in order to revive the economy.
Initiatives such as the Local Investment
Fund or the new Housing Plan joined the
familiar development model based on con-
struction and failed to solve the financial
problems of the municipalities, increasing
state public debt. These measures were
another ‘Keynesianist turn’ that aligned with
previous initiatives of economic revitalisa-
tion. However, the results were a somewhat
disappointing. Not only did unemployment
rise but the measure also failed to change
the post-Fordist foundations of the Spanish
economy.
The second phase (since 2011) is charac-
terised by the austerity measures dictated by
the Troika and executed by the central gov-
ernment. The phase began with the reform
of the Constitution in 2011, adding to the
text the concept of the ‘fiscal stability’ of
public administrations and the absolute pri-
ority of debt repayment and interest.
Through this tool, the central government
shifted the responsibility of major cuts in
welfare services (education, health and social
services) to the regions. For instance the
government of the Comunidad de Madrid
developed an ambitious plan of outsourcing
and privatising public services such as health
and education. This policy followed the pri-
vatisation of urban services performed by
the municipal government, also in the hands
of the Conservative Party, such as waste dis-
posal, which was performed by a large con-
struction company (FCC). In the general
Martı
´-Costa and Toma
`s2117
elections of 2011, the PP won with an abso-
lute majority and continued to follow the
restructuring policies that the Socialist Party
had adopted at the end of its legislature due
to pressure from the EU. The legislative
reform of the labour market in 2012 is
another example of policies driven by
Troika directives.
Moreover, the central government has
undertaken various measures in order to
‘streamline’ the administration. Among
them, the local government reform approved
in December 2013 should be highlighted.
This reform represents a re-centralisation
process: ‘with a substantial return of central
governments to the centre of decision-
making and a reduction in the role of other
actors’ (Del Pino and Pavolini, 2015: 256).
The reform limits the powers of local gov-
ernments and can even remove some of their
powers in favour of the provincial govern-
ment. As Peck points out, the austerity
regimes cannot only be seen at policy level,
but also as they become ‘an indirect driver of
ongoing organizational transformation [...]
to reinforce the hierarchical powers of bud-
get chiefs and audit regimes’ (2012: 632–
649). At the same time, the reform is a roll-
out moment, improving the chances of pri-
vate companies to manage local services. In
this context, non-profit organisations, espe-
cially those linked to the Catholic Church,
partly meet the demands of citizens that were
previously provided by local governments.
There has also been a change of policy,
since the majority of Spanish cities have aban-
doned the fight to host big international
events, except for Madrid, which unsuccess-
fully submitted its bid to host the 2012, 2016
and 2020 Olympic Games. As a result of the
weakening of redistributive mechanisms of
the welfare state at national and regional
level, cities have become more reliant on their
own limited resources. The cities with a more
diverse and vigorous economic base cope bet-
ter with cuts in public spending. In Spain, the
crisis has accentuated the existing inequalities
between northern and southern cities without
any change in the mechanisms of redistribu-
tion (Subirats and Martı´-Costa, 2015).
Our focus on agency, missing from
Brenner’s account, brings the role of new
social movements to the centre of analysis.
Indeed, new social movements have emerged
as a response to the context of austerity poli-
cies and urban crisis. It can be seen as the
‘double movement’ described by Polanyi
(1944) before the marketisation of life now
promoted by austerity measures. In a new
cycle of protest, new groups, platforms and
political parties have proliferated to
denounce the effects of austerity policies and
corruption in Spain (indeed, different scan-
dals have affected majoritarian political par-
ties at all levels of government). Among
them, we find the Indignados movement of
15M that emerged in 2011 and was mainly
visible because of the occupation of central
squares in the biggest cities (Castan
˜eda,
2012). The Indignados created a new space of
debate that questioned the form of the
national state and the supposed benefits of
European integration (Charnock et al., 2014:
115). The platform against mortgages (PAH)
has also emerged as a key group in its sup-
port of the most vulnerable, who have lost
faith in official institutions (see Blanco and
Leo
´n, 2017, this issue). Moreover, other
social movements at regional level have been
spreading in the defence of public services
such as healthcare and education. Over time,
some of these social movements have moved
to the electoral arena, with new political par-
ties such as ‘Podemos’ (‘We Can’) at the
European elections of 2014 and new local
candidatures such as ‘Barcelona en comu
´’or
‘Ahora Madrid’ at the 2015 local elections.
The multiscalar nature of this ‘double move-
ment’ must be highlighted: the European
elections were planned by Podemos as the
first step to winning the national elections,
and at local level we find these plural
2118 Urban Studies 54(9)
coalitions composed of left-wing parties and
urban movements. Finally, a political and
citizens’ movement seeking secession in
Catalonia can be explained, in part, as a
reaction to austerity policies and the uneven
distribution of public spending (another
example of the unintended consequences at
regional level of state spatial restructuring as
a result of the crisis).
In conclusion, the last phase is based on a
clear neoliberal agenda giving absolute pri-
ority to the payment of debt: reduction in
the structure of the public administration
and in welfare expenditure. These affect all
levels of government: national (pensions,
financial help for those with dependants),
regional (health, education, and housing)
and local (social and cultural services). This
is a multiscalar phenomenon, where the glo-
bal, the national, the regional and the local
interplay, and where urban social move-
ments regain importance as political actors
and drivers of change.
Conclusions
In this article we provide new insights from
the Spanish case to understand the evolution
of urban governance with a special focus on
the impact of national capitalist crises. The
general approach to urban governance in
Western Europe does not take seriously into
account Spain’s peripheral economic posi-
tion in the European Union, its late transi-
tion to democracy or the decentralised
composition of the state. For instance, the
first phase of urban governance in Western
Europe described by Brenner (2004) as spa-
tial Keynesianism makes little sense in
Spain, where we observe ‘asymmetrical
Keynesianism’ because of the variegated cri-
sis of Fordism, the evolution of the welfare
state and the process of political decentrali-
sation of the state at the same time.
Moreover, there are different timescales
because of Spain’s political history and its
specific institutional configuration. As an
example, glocalisation strategies were not
introduced until the early 1990s in parallel
with the process of integration to the
European Union.
Four specific observations can be made
in the case of Spain. First, a key feature of
the Spanish state’s restructuring since 1978
has been the process of regional devolution
and the evolution of the Comunidades
Auto
´nomas. This process improved spatial
redistribution over Spain with a network of
large and medium cities that have become
regional or provincial capitals. Moreover,
the beginning of the neoliberal period in
Europe coincides with a period of expansion
of the Spanish welfare state, where regional
governments played a key role by becoming
responsible, at different speeds, for welfare
services. These two processes greatly overlap
and are territorially variegated. We have
noted a process of the rescaling of urban
entrepreneurialism from cities to regions,
especially among the more economically
dynamic such as Comunidad de Madrid,
Comunitat Valenciana or Catalunya.
Nevertheless, this process did not involve a
clear retrenchment of welfare policies until
the crisis in 2008, although there have been
several reforms to increase the flexibility of
the workforce and a process of outsourcing
welfare services.
Second, the beginning of the glocalisation
strategy phase coincides with Spain’s entry
to the EEC and the consequences of globali-
sation on the Spanish economy. We have
highlighted an association between the glo-
calisation strategies and the process of neoli-
beralisation promoted by local and regional
governments. During this phase, state spa-
tial selectivity changed and since then has
increasingly focused on Madrid, reinforcing
the centrality of the city in the Spanish
urban network and as an economic bridge
between Europe and Latin America. During
that time, there has been an increase in the
Martı
´-Costa and Toma
`s2119
neoliberalisation of urban policies by the
governments of the conservative Popular
Party in local and regional government.
Third, the economic crisis and later politi-
cal arrangements became the venue for state
rescaling struggles. At this point, the state
became a gatekeeper for the cuts in public
budgets and ‘fiscal stability’, increasing its
control over the Comunidades Auto
´nomas
and local governments, following European
guidelines. Indeed, it is a phase of the politi-
cal ‘re-centralisation’ of the state. The state
strengthens its role as guarantor of spending
cuts and the fiscal stability of both regional
governments and local governments, which
are responsible for the provision of welfare
services (in areas such as education, health,
housing, etc.).
Fourth, the role of urban social move-
ments has been crucial to shape urban poli-
cies in the state’s restructuring, especially in
the first and last phases when the economic
crisis has been deeper. In both periods (early
1980s and from 2008 onwards), they have
defended the welfare state and the role of
local governments as pillars of health and
education services. Also in both periods,
urban movements have created coalitions
with left-wing parties so as to rule local gov-
ernments. In the context of urban austerity,
the nature of these coalitions is multiscalar,
seeking to gain power also in regional and
national elections.
Our analysis of the Spanish case has
shown the interaction between global trends
and specific national and regional institu-
tional contexts with local coalitions of
actors. However, changes in urban policies
have not been equal among all cities. This
aspect has not been covered in this paper
but, from our research, we have observed
different local responses to the crisis, for
instance, between Barcelona and Madrid.
These place-specific variations highlight the
importance of analysing urban governance
both from a macro perspective (the
transformation of the state) and a micro
approach (local coalitions). In this sense, we
believe that further research combining both
analytical perspectives could help to under-
stand the current changes in urban
governance.
Acknowledgements
We would like to thank Jonathan Davies and
Mustafa Kemal Bayırbag
˘for their fruitful com-
ments on the article.
Funding
This work is based on the results of two consecu-
tive projects. While the first (Exploring Urban
Policies, EXNURB) analysed the development of
urban policies in Spain from 1979 to 2007, the
second (Urban policies and resilience, POLURB)
focused on the effects of the economic crisis on
urban policies (from 2008 to 2014). In the first
project, the research was based on the most popu-
lated Spanish cities (except for Ma
´laga and
Zaragoza), that is, Madrid, Barcelona, Valencia,
Bilbao, Sevilla, Murcia and Vigo. In the second
project, other large and medium-sized cities were
added to the analysis (Ma
´laga, Zaragoza,
Badajoz and Santander). Data collection and
analysis was done systematically so as to be able
to perform an aggregated analysis on the basis of
case studies. With this goal, quantitative and qua-
litative methods were used, combining documen-
tal analysis, the construction of vulnerability
indicators in cities and the transcription and
Atlas-Ti analysis of 20 semi-structured interviews
on the main stakeholders of each city. Both proj-
ects were funded by the Spanish Ministry of
Science: EXNURB (CSO2008-04173/CPOL)
(2008–2011) and POLURB (CSO2011-28850)
(2011–2014).
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