Geoscience Reference
In-Depth Information
TABLE 8.3.
Determinants of Interregional Inequalities
in Political Unions Around the World: Dimensions
of the Geography of Income Inequality, 1980-2000
OLS
Pcse
Robust
Pcse
(ar1)
β
β
β
(s.e)
(s.e)
(s.e)
Mobility
−
.138***
−
.138***
−
.070***
(.065)
(.044)
(.026)
Oil Dependence
−
.44
−
.44*
.053
(.30)
(.23)
(.056)
Regional Distribution
−
.21
−
.21
−
.87
of Ethnic Groups
(.42)
(.30)
(.67)
Intercept
2.11***
2.11***
1.69***
(.29)
(.28)
(.38)
N
243
243
243
R-squared
.34
.34
Key: * p
<
.10,**p
<
.05, *** p
<
.01
transfer does not necessarily mean that it has full political control over that
transfer (Rodden
2004
). To correct for this possible source of noise, I proceed
on the assumption that fiscal autonomy is a good proxy for political autonomy
and weight this first term by an indicator of fiscal autonomy (proportion of total
regional revenues collected by regions themselves). This approach is preferable
to existing alternatives (e.g., regional share of social expenditures as a percent-
age of total social expenditures) in that interregional transfers are effectively
excluded from the calculations.
5
Hence, this indicator of fiscal decentraliza-
tion is less blurred by measurement error around the real fiscal and political
autonomy of the regions.
The set of predictors includes the instrumented measure of the geography of
income inequality (8.1) in interaction with a measure of the balance of power
between the center and the regions. To capture the latter, I use two approaches.
The first one captures representation (R) through the role of subnational units
in the formation of national will, and is defined by
PC
n
BP
1
=
R
=
(8.3)
where PC (
party centralization
) is Riker's index of party centralization (share
of subnational incumbents that belong to the same political party in power at
the federal level) and n is the number of levels of power with directly elected
politicians represented at the national level. If subnational representatives are
directly elected by their local constituencies, n takes the value of 2, because
a stronger link to the local constituency of local candidates weakens party
5
The empirical estimations are robust to the use of either indicator of fiscal decentralization.
