This article analyzes the extent to which fiscal policy has contributed to the industrialization of Spain over the last two centuries. Spanish governments have traditionally placed excessive emphasis on policies of economic regulation but at the same time, they have failed to provide a suitable level of merit and public goods. Recurrent budget deficits were always financed by inflationary means, which did nothing to promote economic growth. In clear contrast with public expenditures, the system of taxation which prevailed until 1978, meant that there was not much of a tax burden. This allowed for a level of savings, and potential investment, which was conducive to industrialization.