Geoscience Reference
In-Depth Information
The balance of power between national and regional elites becomes more cen-
trifugal for two reasons. Since 1993, it is increasingly common that the national
government needs agreements with nationalist parties to secure stable rule. In
addition, as decentralization unfolds, regional party elites within national par-
ties become more autonomous, and less prone to abide by top-down instruc-
tions from the center. This is particularly the case when regional branches of
national parties compete with nationalist parties for office.
Taken together, these alterations in the balance of power between national
and regional elites open the window for a series of reforms of the regional
financing system that include the partial decentralization of the income tax.
These reforms are part of a process of correcting the redistributive effects of
the existing system. Insofar as there is a special system at work for the Basque
Country and Navarra, and a “common system” for the rest, the system will be
unstable by design. Each reform will only nurture conditions for further fiscal
autonomy demands by the net contributors within the common system (Le on
2009
). For all its implications on the revenue side, though, this centrifugal push
has proved, so far, unable to overcome the incentives to preserve the centralized
and unitary nature of social security. The territorial distribution of welfare
dependents, in combination with a proportional representation system at the
national level, remains a strong constraint on national party elites. Accordingly,
they have refused to decentralize Social Security even when they were in dire
political need of support by nationalist parties.
Overall, the Spanish experience adds to previous chapters in showing that
demands for fiscal autonomy emerge directly from the interplay between eco-
nomic geography and exisiting fiscal structures, and that these demands are
successful only when an originally centripetal system changes as a result of
the centrifugal push by nationalist parties on patterns of political competition.
These findings lend additional support to the central claim of this topic, that the
origin and evolution of fiscal structures reflects the interplay between economic
geography and the system of representation (hypothesis 2).
