Geoscience Reference
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institutions (Alesina and Spolaore
2003
; Beramendi
2007
; Bolton and Roland
1997
; Persson and Tabellini
1996a
,
1996b
; Wibbels
2005
a). In doing so, this
chapter identifies risk sharing between regions as a key factor, separate from
income, shaping the political economy of fiscal institutions. More specifically,
it highlights the mobility of dependents as a particularly relevant factor behind
cross-regional externalities, accounting for the design of public insurance pro-
grams. Herein lies an important key to understanding why some federations
have more centralized welfare states than others, and ultimately why some
political unions redistribute more than others. In making this case, this study
moves beyond the voluminous literature on mobility as a constraint to redis-
tribution (Peterson
1995
) in federations and places mobility and its interplay
with the geography of labor market risk at the center of an endogenous theory
of institutional design.
