The aim of this paper is to make a contribution to the debate on the quantification of the expenditure needs of sub-central jurisdictions. To that end, we suggest three alternative formulae, based on efficiency, equity and power relations, respectively. The paper concludes that under the first two formulae, and in the presence of fixed costs in servicies delivery, it is the territory, together with is population, that appears as the relevant variable when estimating expenditure needs. Nevertheless, the funding of the Spanish Autonomous Regions is based on population. This evidence suggests that either variable costs explain almost the full cost of services delivery, or that the distribution of funds is based on the relative power of each Autonomous Region, as determined by its population.

Key words: expenditure needs, efficiency, equity, power, population, density.
JEL classification: D61, D63, H73.