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. This paper identifies and measures the effect of two broad state downscaling mechanisms, namely the development of regional identity - operating at the cultural level and proxing preference heterogeneity-, and the heterogeneity in levels of economic development; influencing the extent of regional redistribution. Firstly, we empirically examine our claim at an aggregate level using evidence from Catalonia and the Basque Country, to examine the evolution of sub-state identity and the rise of inter-territorial fiscal grievances - weakening intraregional economic solidarity. Secondly, we estimate how the combination of widening sub-national identity and regional redistribution strengthens support for vertical state downscaling. Findings suggest an expansion of spatial identities in both Catalonia and the Basque Country since the early 1980’s. Ending regional fiscal solidarity it is found to increase the average income of Catalonia and the Basque Country by 37% and 17% respectively. Although we find evidence of elite driven support for state downscaling, the effect of regional identity on downscaling support exceeds that of regional redistribution in the magnitude of one to seven.
|Date of creation:||01 Mar 2010|
|Date of revision:|
|Contact details of provider:|| Web page: http://www2.lse.ac.uk/europeanInstitute|
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.:
- Ellingsen, Tore, 1998. "Externalities vs internalities: a model of political integration," Journal of Public Economics, Elsevier, vol. 68(2), pages 251-268, May.
- Richard Bird & Andrey Tarasov, 2002.
"Closing the Gap: Fiscal Imbalaces and Intergovernmental Transfers in Developed Federations,"
International Center for Public Policy Working Paper Series, at AYSPS, GSU
paper0202, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- Richard M Bird & Andrey V Tarasov, 2004. "Closing the gap: fiscal imbalances and intergovernmental transfers in developed federations," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 22(1), pages 77-102, February.
- 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.
- 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.
- repec:tpr:qjecon:v:112:y:1997:i:4:p:1027-56 is not listed on IDEAS
- Alesina, Alberto, 2003. "The Size of Countries: Does it Matter?," Scholarly Articles 4551794, Harvard University Department of Economics.
- 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.
- Alberto Alesina & Enrico Spolaore, 1995.
"On the Number and Size of Nations,"
NBER Working Papers
5050, National Bureau of Economic Research, Inc.
- Milanovic, Branko, 1996. "Nations, conglomerates, and empires : the tradeoff between income and sovereignty," Policy Research Working Paper Series 1675, The World Bank.
- Isabelle Joumard & Per Mathis Kongsrud, 2003.
"Fiscal Relations across Government Levels,"
OECD Economic Studies,
OECD Publishing, vol. 2003(1), pages 155-229.
- Wittman, Donald, 1991. "Nations and States: Mergers and Acquisitions; Dissolutions and Divorce," American Economic Review, American Economic Association, vol. 81(2), pages 126-29, May.
- 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.
When requesting a correction, please mention this item's handle: RePEc:erp:leqsxx:p0020. 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.