The Political Geography of Inequality: Regions and Redistribution (Cambridge Studies in Comparative Politics)

This book is a study of the politics of redistribution and inequality in political unions. It addresses two questions: why some political systems have more centralized systems of interpersonal redistribution than others, and why some political unions make larger efforts to equalize resources among their constituent units than others. This book presents a new theory of the origin of fiscal structures in systems with several levels of government. The argument points to two major factors to account for the variation in redistribution: the interplay between economic geography and political representation on the one hand, and the scope of interregional economic externalities on the other. To test the empirical implications derived from the argument, the book relies on in-depth studies of the choice of fiscal structures in unions as diverse as the European Union, Canada, and the United States in the aftermath of the Great Depression; Germany before and after Reunification; and Spain after the transition to democracy. Cover ......Page 1 The Political Geography of Inequality: Regions and Redistribution......Page 3 Series......Page 5 Title......Page 7 Copyright......Page 8 Dedication......Page 9 Contents......Page 11 List of Tables......Page 12 List of Figures......Page 14 Acknowledgments......Page 17 1: Regions and Redistribution: Introduction and Overview......Page 19 PUZZLES: THE DOMINANT VIEW AND ITS LIMITS......Page 22 OVERVIEW OF THE ARGUMENT......Page 28 CHALLENGES AND THE ROAD AHEAD......Page 33 Economic Geography and Preferences......Page 35 From Preferences to Outcomes: The Mediating Role of Political Representation......Page 36 THE BOOK'S CONTRIBUTIONS......Page 37 ORGANIZATION OF THE BOOK......Page 40 THE ANALYTICAL FRAMEWORK: ELEMENTS AND PREMISES......Page 41 The Geography of Income Inequality and Preferences for Fiscal Structures......Page 47 The Geography of Risk and Preferences for Fiscal Structures......Page 52 MOBILITY AND THE ORGANIZATION OF FISCAL STRUCTURES: INTERREGIONAL REDISTRIBUTION AS INSURANCE TO PROTECT AUTONOMY......Page 54 FROM PREFERENCES TO CHOICES: REPRESENTATION AND THE CHOICE OF FISCAL STRUCTURES......Page 57 SUMMARY OF HYPOTHESES......Page 61 What drives the (de)centralization of interpersonal redistribution?......Page 62 What explains the levels of interregional redistribution?......Page 63 3: The Road Ahead: The Empirical Strategy......Page 64 UNION FORMATION AND FISCAL STRUCTURES......Page 65 EXOGENOUS CHANGES IN ECONOMIC GEOGRAPHY AND MOBILITY......Page 69 POLITICAL REPRESENTATION AND THE STATUS QUO: WHEN CAN POLITICAL REPRESENTATION BE TAKEN AS GIVEN?......Page 73 Endogenous Processes......Page 75 Natural Experiments......Page 78 SUMMARY: EMPIRICAL STRATEGY AND HYPOTHESIS TESTING......Page 82 4: The European Union: Economic Geography and Fiscal Structures under Centrifugal Representation......Page 85 THE EUROPEAN UNION'S FISCAL STRUCTURE......Page 86 SUSTAINING AUTONOMY, MANAGING RISKS: THE LOGIC BEHIND EUROPE'S FISCAL STRUCTURE......Page 93 ECONOMIC GEOGRAPHY AND THE LIMITS TO INTERPERSONAL REDISTRIBUTION......Page 95 The Economic Geography of the Union......Page 96 Social Policy in the European Union: An Overview......Page 99 Assessing the Mechanisms: Economic Geography and Institutional Preferences in the EU......Page 101 MOBILITY AND INTERREGIONAL REDISTRIBUTION IN THE EUROPEAN UNION......Page 112 THEORETICAL IMPLICATIONS......Page 119 5: North America's Divide: Distributive Tensions, Risk Sharing, and the Centralization of Public Insurance in Federations......Page 121 THE STATUS QUO AND THE DISTRIBUTIVE CONSEQUENCES OF THE GREAT DEPRESSION......Page 123 THE BALANCE BETWEEN ECONOMIC GEOGRAPHY AND MOBILITY IN THE AFTERMATH OF THE DEPRESSION......Page 129 THE POLITICAL PROCESS: A COMPARATIVE OVERVIEW......Page 134 Preference Heterogeneity and Initial Responses......Page 135 Divergent Approaches to Unemployment Insurance: The Political Processes......Page 138 THEORETICAL IMPLICATIONS......Page 150 6: Germany's Reunification: Distributive Tensions and Fiscal Structures under Centripetal Representation......Page 153 GERMANY'S FISCAL STRUCTURE BEFORE REUNIFICATION: THE EXISTING INSTITUTIONAL DESIGN......Page 154 THE IMPACT OF REUNIFICATION ON GERMANY'S ECONOMIC GEOGRAPHY......Page 162 THE INITIAL YEARS (1990–1994): THE POLITICAL AND ECONOMIC INCORPORATION OF THE EAST......Page 167 Market Integration and Redistribution: Early Steps on Interpersonal and Interregional Redistribution......Page 169 Political Preferences and the Costs of Reunification: Interpersonal and Interregional Redistribution and the Solidarity Pact......Page 171 Interpersonal Redistribution......Page 173 Cost Allocation and Interregional Redistribution......Page 177 The Incorporation Effort: Quantitative Evidence......Page 178 BEYOND NATIONAL UNITY: CENTRIPETALISM AND DISTRIBUTIVE CONFLICTS AFTER REUNIFICATION (1995–2005)......Page 180 The Aftermath of Reunification: Quantitative Evidence......Page 190 THEORETICAL IMPLICATIONS......Page 191 7: Endogenous Decentralization and Welfare Resilience: Spain, 1978–2007......Page 193 Asymmetry of Access and Openness in the Distribution of Political Capacities......Page 195 Electoral Asymmetry and Centripetal Representation......Page 198 Absence of Institutionalized Cosovereignty: Regions Do Not Formally Participate in the Production of National Legislation......Page 199 Fiscal Asymmetry and the Status Quo......Page 200 ECONOMIC GEOGRAPHY AND DISTRIBUTIVE IMPLICATIONS OF FISCAL STRUCTURES......Page 201 ENDOGENOUS DECENTRALIZATION AND CHANGES TO THE STATUS QUO: THE PARTIAL ACHIEVEMENT OF FISCAL AUTONOMY AND THE RESILIENCE OF SOCIAL SECURITY......Page 207 The Partial Achievement of Fiscal Autonomy......Page 210 The Resilience of Social Security......Page 220 THEORETICAL IMPLICATIONS......Page 222 8: The Legacy of History......Page 224 Inequality, Geography, and Preferences......Page 226 Inequality, Representation, and Fiscal Structures......Page 228 Determinants of Interregional Inequalities......Page 237 Inequality, Representation, and Fiscal Structures in a Broader Sample......Page 239 FISCAL STRUCTURES AND THE REPRODUCTION OF INEQUALITY......Page 241 INTERREGIONAL REDISTRIBUTION IN POLITICAL UNIONS......Page 245 9: The Political Geography of Inequality: Summary and Implications......Page 252 The Origin of Preferences: The Role of Economic Geography (Hypothesis 1)......Page 253 From Preferences to Choices: The Role of Political Representation (Hypothesis 2)......Page 255 Interregional Transfers and Redistribution: Insurance and Capture (Hypothesis 3)......Page 256 The Dynamics of Inequality in Political Unions......Page 257 IMPLICATIONS: INEQUALITY AND STABILITY IN POLITICAL UNIONS......Page 258 SOME BROADER LESSONS AND THE ROAD AHEAD......Page 261 THE DECISION TO PURSUE A CHANGE IN THE ORGANIZATION OF FISCAL STRUCTURES......Page 267 The Geography of Income and Preferences for Fiscal Structures......Page 268 THE GEOGRAPHY OF ECONOMIC SPECIALIZATION AND INSTITUTIONAL PREFERENCES......Page 269 Appendix B: Chapter 4......Page 271 VARIABLE SOURCES AND DEFINITIONS......Page 273 Appendix C: Chapter 7......Page 275 Appendix D: Chapter 8 – Sources and Descriptive Statistics......Page 276 References......Page 281 Index......Page 301 This is a book about redistribution and inequality in political unions, a form of democracy that involves several levels of government and that encompasses about one third of the population living under democracy around the world.