Regions and Redistribution - The Political Geography of Inequality - page 6

endeavors. As such, fragmented political structures crystallize multidimension-
ality, thereby priming second dimensions (such as identity, territory, or race)
and limiting the feasibility of large redistributive coalitions (Iversen 2006 ). 9
A similar logic guides many analyses of welfare policy reform in North Amer-
ican federations, where scholars tend to interpret proposals in favor of decen-
tralization as masked efforts to curtail the welfare state. 10
More recently, a third stream of research has come to confirm the association
between inequality and decentralized political institutions, though this time
reversing the direction of causality. Starting with the seminal work by Bolton
and Roland ( 1997 ), a number of contributions have emphasized the shape and
territorial specificities of income distribution as a key determinant of political
integration and constitutional choices in federations (Alesina and Spolaore
2003 ; Beramendi 2007 ; Sambanis and Milanovic 2009 ; Wibbels 2005b ). The
argument goes as follows: federalism and decentralization are associated with
particular distributive outcomes not because they exogenously generate them 11 ,
but because distributional concerns play a fundamental role in shaping the
organization of fiscal structures in political unions. 12
There is no doubt that these lines of research have provided important
insights on both the economics and the politics of decentralization. Moreover,
there is much to like about the elegance and parsimony of these approaches
to the association between federalism, decentralization, and inequality. How-
ever, they are unable to account for the observable variation in fiscal structures
across political unions. Figure 1.1 provides an overview of the relationship
between fiscal structures and inequality in political unions. In the left panel,
the x axis ranks countries according to their level of decentralization of inter-
personal redistribution, and the y axis ranks countries according to their level
of disposable household income inequality (Gini coefficients). 13 In turn, the

9 For studies on the United States, see; Amenta and Carruthers ( 1988 : 661-678); Pierson ( 1995 :
449-478); Quadagno ( 1994 ); Skocpol ( 1992 ); and Skocpol and Orloff ( 1984 : 726-750) as well
as the recent insights from institutional economic history by Alston and Ferrie ( 1999 : 49-74,
118-152). For a recent formalization on the determinants of the welfare state in the United
States see Alesina, Glaeser, and Sacerdote ( 2001 ); and Alesina and Glaeser ( 2004 ). For similar,
albeit older, insights see Lowi ( 1984 : 37-55). For quantitative cross-national comparisons, see,
among others, Hicks and Kenworthy ( 1998 : 1631-1673); Hicks and Swank ( 1992 : 658-674);
Huber, Ragin and Stephens ( 1993 ); and Huber and Stephens ( 2001 ).
10 This claim builds upon devolution to the provinces/states in Canada and the United States. On
the former, see Banting ( 1987 , 1992 : 149-170, 1995); Courchene ( 1993 : 83-135; 1994 ); and
Kenneth ( 1998 ). On the latter, see Peterson ( 1995 ); Peterson, Rom and Scheve ( 1998 ); and
Volden ( 1997 : 65-97).
11 As an example, see the logic underlying the conclusions Huber, Ragin and Stephens ( 1993 :
711-750); and Huber and Stephens ( 2001 ) draw from their index of constitutional structure.
12 This literature is part of a broader trend that places tensions associated with the distribution of
income as major determinants of institutional choices such as the nature of the political regime
(Acemoglu and Robinson 2006 ;Boix 2003 ), or the design of electoral rules (Cusack, Iversen
and Soskice 2007 ; Rogowski and MacRae 2008; Tichi and Vindigni 2003).
13 Household income per equivalent adult as defined by the Standardized Income Distribution
Database (Babones 2008 ) and the Luxembourg Income Study.