Redistributive function of public spending

The Spanish Constitution proclaims in Article 1.1 that “Spain is constituted as a social and democratic state governed by the rule of law.” It is on this social character that the principle of equity or justice in public spending and its redistributive function are based.

In a free market society like ours, inequalities arise that the market alone cannot resolve, and therefore, the Constitution provides for state intervention, in its social dimension, to try to correct them. This active role is referred to in Article 9.2 when it states that “It is the responsibility of the public authorities to promote the conditions so that the freedom and equality of the individual and the groups to which they belong are real and effective...”. It is about promoting equal opportunities for all citizens, regardless of individual starting situations.

These great values are then embodied in other constitutional precepts.

Section 2 of Article 31 of the Spanish Constitution establishes that "Public spending shall make an equitable allocation of public resources..." This article, by establishing the principle of equity in public spending, attributes to it an important redistributive function, since the equitable allocation of public resources means that all citizens have the right to benefit equally from public goods and services, regardless of their economic capacity to contribute through the payment of taxes to obtaining the necessary resources for their provision. This principle of equity or justice guarantees the minimum satisfaction of public needs and the absence of any discrimination or arbitrariness.

Article 40.1 of the Constitution also mandates public authorities to ensure a fairer distribution of income, establishing that "The public authorities shall promote favorable conditions for social and economic progress and for a more equitable regional and personal distribution of income..."

This redistributive function means that through public spending—that is, through the investment of public resources in the provision of certain benefits and services—income is transferred to the economically weakest social sectors, in order to compensate for inequality, thus ensuring fair coexistence and social peace.