Unveiling Vertical State Downscaling: Identity and/or the Economy?
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.
|Date of creation:||Mar 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 (020) 7405 7686
Web page: http://www.lse.ac.uk/europeanInstitute/LEQS/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Alberto Alesina & Enrico Spolaore & Romain Wacziarg, 2003.
"Trade, Growth, and the Size of Countries,"
Harvard Institute of Economic Research Working Papers
1995, Harvard - Institute of Economic Research.
- Jordi Pons & Ramon Tremosa-i-Balcells, 2003.
"Macroeconomic Effects of Catalan Fiscal Deficit with the Spanish State (2002-2010) (?),"
ERSA conference papers
ersa03p128, European Regional Science Association.
- 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.
- Bolton, Patrick & Roland, Gerard, 1997.
"The Breakup of Nations: A Political Economy Analysis,"
The Quarterly Journal of Economics,
MIT Press, vol. 112(4), pages 1057-90, November.
- Bolton, Patrick & Roland, Gérard, 1995. "The Break up of Nations: A Political Economy Analysis," CEPR Discussion Papers 1225, C.E.P.R. Discussion Papers.
- Alesina, Alberto, 2003. "The Size of Countries: Does it Matter?," Scholarly Articles 4551794, Harvard University Department of Economics.
- 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, 08.
- Ugo Pagano, 2003. "Nationalism, development and integration: the political economy of Ernest Gellner," Cambridge Journal of Economics, Oxford University Press, vol. 27(5), pages 623-646, September.
- Mikel G�mez 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.
- Ellingsen, Tore, 1998. "Externalities vs internalities: a model of political integration," Journal of Public Economics, Elsevier, vol. 68(2), pages 251-268, May.
- 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 1023-31, December.
When requesting a correction, please mention this item's handle: RePEc:eiq:eileqs:20. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Katjana Gattermann)
If references are entirely missing, you can add them using this form.