The Spanish welfare state incorporates elements of both Bismarckian and Beveridgean traditions, and can be labelled as a via media with respect to other existing regimes of social protection. It also represents a middle way of de-commodification and gendering, and of universal and means-tested access to services and benefits. Spain, thus, has reconstructed a medium-size system of social protection as compared to the countries of the European Union. The most relevant factor conditioning welfare development in Spain is the deep process of decentralisation both at the level of planning and policy implementation. Decentralisation of social services has had a much larger impact than privatisation. Social assistance is a power of the 'exclusive competence' of Spanish mesogovernments (Comunidades Autónomas). These institutional actors have made use of these powers for purposes mainly of institutional legitimisation. Of great relevance for the completion of the ‘safety net’ has been the implementation of the new regional programmes of rentas mínimas de inserción (minimum income benefits). The principle of territorial subsidiarity was enshrined in the Treaty of European Union of 1992, and provides for decisions to be taken transnationally only if local, regional or national levels cannot perform better. In other words, the preferred locus for decision-making is that closer to the citizen, and as local as possible. The paper concludes that the rationale implicit in the principle of decentralisation in Spain, and that of territorial subsidiarity in the European Union, favours the participation of sub-state layers of government in the running of social programmes. Policy innovation concerning social policies developed by sub-state communities with a ‘cosmopolitan localism’ perspective can be more effective and efficient, as the Spanish case seems to validate