IDEAS home Printed from https://ideas.repec.org/p/eiq/eileqs/20.html

Some searches may not work properly. We apologize for the inconvenience.

   My bibliography  Save this paper

Unveiling Vertical State Downscaling: Identity and/or the Economy?

Author

Listed:
  • Joan Costa-i-Font

Abstract

State rescaling may take a variety of shapes although scant research has been carried out into the mechanisms and economic incentives that underpin rescaling processes. Recent literature in economics, economic sociology and political economy has identified at least two broad rescaling mechanisms, namely the development of regional identity - operating at the cultural level and proxing preference heterogeneity-, and the heterogeneity in levels of economic development, which influence the extent of regional redistribution. This paper empirically examines the mechanisms of vertical state rescaling by drawing upon empirical evidence from Catalonia and the Basque Country, to explore the evolution of sub-state identity and the rise of inter-territorial fiscal grievances - weakening intraregional economic solidarity. Findings corroborate the idea that the combination of widening sub-national identity raises the costs of managing heterogeneous spatial identities and strengthens support for vertical state downscaling. Similarly, ending regional fiscal solidarity it is found that Catalonia would increase their income by 37%. However, the effect of regional identity exceeds that of regional redistribution in explaining state rescaling support in the magnitude of one to seven. These findings speak to the debate on the formation of Europe, in that they suggest limits to regional redistribution and pinpoint the importance of a common identity.

Suggested Citation

  • Joan Costa-i-Font, 2010. "Unveiling Vertical State Downscaling: Identity and/or the Economy?," LEQS – LSE 'Europe in Question' Discussion Paper Series 20, European Institute, LSE.
    • Handle: RePEc:eiq:eileqs:20
    as

    Download full text from publisher

    File URL: http://www.lse.ac.uk/europeanInstitute/LEQS/LEQSPaper20.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Branko Milanović, 2001. "Nations, Conglomerates and Empires: Trade-off Between Income and Sovereignty," Palgrave Macmillan Books, in: Dominick Salvatore & Marjan Svetličič & Jože P. Damijan (ed.), Small Countries in a Global Economy, chapter 1, pages 25-69, Palgrave Macmillan.
    2. Bruno S. Frey, 2009. "A Multiplicity of Approaches to Institutional Analysis. Applications to the Government and the Arts," CREMA Working Paper Series 2009-12, Center for Research in Economics, Management and the Arts (CREMA).
    3. Ellingsen, Tore, 1998. "Externalities vs internalities: a model of political integration," Journal of Public Economics, Elsevier, vol. 68(2), pages 251-268, May.
    4. Lustick, Ian S. & Miodownik, Dan & Eidelson, Roy J., 2004. "Secessionism in Multicultural States: Does Sharing Power Prevent or Encourage It?," American Political Science Review, Cambridge University Press, vol. 98(2), pages 209-229, May.
    5. Bruno S. Frey, 2009. "A New Concept of European Federalism," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 3, London School of Economics / European Institute.
    6. Bolton, Patrick & Roland, Gerard & Spolaore, Enrico, 1996. "Economic theories of the break-up and integration of nations," European Economic Review, Elsevier, vol. 40(3-5), pages 697-705, April.
    7. Patrick Bolton & Gérard Roland, 1997. "The Breakup of Nations: A Political Economy Analysis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1057-1090.
    8. Alberto Alesina, 2002. "The Size of Countries: Does it Matter?," Harvard Institute of Economic Research Working Papers 1975, Harvard - Institute of Economic Research.
    9. Clarke, Harold D. & Kornberg, Allan & Stewart, Marianne C., 2004. "Referendum Voting as Political Choice: The Case of Quebec," British Journal of Political Science, Cambridge University Press, vol. 34(2), pages 345-355, April.
    10. Ugo Pagano, 2003. "Nationalism, development and integration: the political economy of Ernest Gellner," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 27(5), pages 623-646, September.
    11. Michel Le Breton & Shlomo Weber, 2003. "The Art of Making Everybody Happy: How to Prevent a Secession," IMF Staff Papers, Palgrave Macmillan, vol. 50(3), pages 1-4.
    12. Jordi Pons-i-Novell & Ramon Tremosa-i-Balcells, 2005. "Macroeconomic effects of Catalan fiscal deficit with the Spanish state (2002-2010)," Applied Economics, Taylor & Francis Journals, vol. 37(13), pages 1455-1463.
    13. Mikel Gómez Uranga & Goio Etxebarria, 2000. "Panorama of the Basque Country and its Competence for Self-Government," European Planning Studies, Taylor & Francis Journals, vol. 8(4), pages 521-535, August.
    14. Michael Keating, 2009. "Second Round Reform. Devolution and constitutional reform in the United Kingdom, Spain and Italy," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 5, London School of Economics / European Institute.
    15. Buchanan, James M & Faith, Roger L, 1987. "Secession and the Limits of Taxation: Toward a Theory of Internal Exit," American Economic Review, American Economic Association, vol. 77(5), pages 1023-1031, December.
    16. Alesina, Alberto & Spolaore, Enrico & Wacziarg, Romain, 2005. "Trade, Growth and the Size of Countries," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 23, pages 1499-1542, Elsevier.
    17. Albert Breton & Gianluigi Galeotti & Pierre Salmon & Ronald Wintrobe, 1995. "Nationalism and Rationality," Post-Print hal-00445587, HAL.
    18. Richard M Bird & Andrey V Tarasov, 2004. "Closing the Gap: Fiscal Imbalances and Intergovernmental Transfers in Developed Federations," Environment and Planning C, , vol. 22(1), pages 77-102, February.
    19. Joan Costa-Font & Ana Rico, 2006. "Vertical Competition in the Spanish National Health System (NHS)," Public Choice, Springer, vol. 128(3), pages 477-498, September.
    20. Giorgio Brosio & Federico Revelli, 2003. "The political economy of regional opting out: distributive implications of a prospective Europe of Regions," Economics of Governance, Springer, vol. 4(2), pages 127-142, August.
    21. Richard Bellamy, 2009. "The Liberty of the Post-Moderns? Market and Civic Freedom within the EU," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 1, London School of Economics / European Institute.
    22. Wittman, Donald, 1991. "Nations and States: Mergers and Acquisitions; Dissolutions and Divorce," American Economic Review, American Economic Association, vol. 81(2), pages 126-129, May.
    23. Gary Marks & Liesbet Hooghe & Kermit Blank, 1996. "European Integration from the 1980s: State‐Centric v. Multi‐level Governance," Journal of Common Market Studies, Wiley Blackwell, vol. 34(3), pages 341-378, September.
    24. Casella, Alessandra & Frey, Bruno, 1992. "Federalism and clubs : Towards an economic theory of overlapping political jurisdictions," European Economic Review, Elsevier, vol. 36(2-3), pages 639-646, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vassilis Monastiriotis & Sotirios Zartaloudis, 2010. "Beyond the crisis: EMU and labour market reform pressures in good and bad times," LEQS – LSE 'Europe in Question' Discussion Paper Series 23, European Institute, LSE.
    2. Susanne Lütz & Matthias Kranke, 2010. "The European Rescue of the Washington Consensus? EU and IMF Lending to Central and Eastern European Countries," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 2, London School of Economics / European Institute.
    3. Susanne Lütz & Matthias Kranke, 2010. "The European Rescue of the Washington Consensus? EU and IMF Lending to Central and Eastern European Countries," LEQS – LSE 'Europe in Question' Discussion Paper Series 22, European Institute, LSE.
    4. Sabine Flamand, 2015. "Interregional transfers, group loyalty and the decentralization of redistribution," Economics of Governance, Springer, vol. 16(4), pages 307-330, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Joan Costa-i-Font, 2010. "Unveiling Vertical State Downscaling: Identity and/or the Economy?," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 0, London School of Economics / European Institute.
    2. Andrés Rodríguez-Pose & Marko Stermšek, 2014. "The economics of secession. Analysing the economic impact of the collapse of the former Yugoslavia," Working Papers. Collection A: Public economics, governance and decentralization 1408, Universidade de Vigo, GEN - Governance and Economics research Network.
    3. Grégoire Rota Graziosi, 2004. "La fragmentation politique, une revue de la littérature," Revue Française d'Économie, Programme National Persée, vol. 18(4), pages 193-223.
    4. Libman, Alexander Mikhailovich, 2009. "Эндогенные Границы И Распределение Власти В Федерациях И Международных Сообществах [ENDOGENOUS BOUNDARIES AND DISTRIBUTION OF POWER In the Federation]," MPRA Paper 16473, University Library of Munich, Germany.
    5. Enrico Spolaore, 2016. "The economics of political borders," Chapters, in: Eugene Kontorovich & Francesco Parisi (ed.), Economic Analysis of International Law, chapter 1, pages 11-43, Edward Elgar Publishing.
    6. Rohner, Dominic & Esteban, Joan & Flamand, Sabine & Morelli, Massimo, 2018. "A Dynamic Theory of Secession," CEPR Discussion Papers 12398, C.E.P.R. Discussion Papers.
    7. Joan-Maria Esteban & Sabine Flamand & Massimo Morelli & Dominic Rohner, 2018. "The Survival and Demise of the State: A Dynamic Theory of Secession," Working Papers 1028, Barcelona School of Economics.
    8. Staal, Klaas, 2006. "Country size and publicly provided goods," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 187, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    9. Enrico Spolaore, 2009. "National Borders, Conflict and Peace," CESifo Working Paper Series 2860, CESifo.
    10. Dur, Robert & Staal, Klaas, 2008. "Local public good provision, municipal consolidation, and national transfers," Regional Science and Urban Economics, Elsevier, vol. 38(2), pages 160-173, March.
    11. Joan Esteban & Sabine Flamand & Massimo Morelli & Dominic Rohner, 2017. "Stay, Split or Strike: Theory and Evidence on Secessionist vs Centrist Conflict," Working Papers 609, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    12. Filippo Gregorini, 2007. "Political Geography and Income Inequalities," DISCE - Quaderni dell'Istituto di Teoria Economica e Metodi Quantitativi itemq0746, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    13. Anesi, Vincent, 2012. "Secessionism and minority protection in an uncertain world," Journal of Public Economics, Elsevier, vol. 96(1), pages 53-61.
    14. Dokow, Elad & Luque, Jaime, 2019. "Provision of local public goods in mixed income communities," Journal of Housing Economics, Elsevier, vol. 45(C), pages 1-1.
    15. Michel Le Breton & Shlomo Weber, 2003. "The Art of Making Everybody Happy: How to Prevent a Secession," IMF Staff Papers, Palgrave Macmillan, vol. 50(3), pages 1-4.
    16. Robert Dur & Klaas Staal, 2003. "National Interference in Local Public Good Provision," Tinbergen Institute Discussion Papers 03-074/1, Tinbergen Institute.
    17. Klaas Staal, 2004. "Country Size and Public Good Provision," Tinbergen Institute Discussion Papers 04-026/1, Tinbergen Institute.
    18. Flamand, Sabine, 2019. "Partial decentralization as a way to prevent secessionist conflict," European Journal of Political Economy, Elsevier, vol. 59(C), pages 159-178.
    19. Brink , Anna, 2003. "Unequal Provision of Local Public Services under the Threat of Secession," Working Papers in Economics 103, University of Gothenburg, Department of Economics.
    20. Trent J. MacDonald, 2019. "The Political Economy of Non-Territorial Exit," Books, Edward Elgar Publishing, number 18871.

    More about this item

    Keywords

    vertical state downscaling; spatial identity; regional elites; devolution; Basque Country and Catalonia; Europe;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eiq:eileqs:20. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Katjana Gattermann (email available below). General contact details of provider: https://edirc.repec.org/data/eilseuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.