Geoscience Reference
In-Depth Information
3.5
7
3
6
2.5
5
2
Representation
Mobility
4
1.5
3
1
Interregional
Transfers
Interregional
Transfers
2
0.5
1
0
0
0
0.2
0.4
0.6
0.8
1
−
1
−
FIGURE 8.8. Impact of Representation and Mobility on Interregional Transfers
(predicted values)
on interpersonal redistribution further reinforces the notion of a trade-off. A
system of representation that increases the leverage of national political elites
versus local political elites is associated with both a more integrated system
of interpersonal redistribution through taxes and transfers and less success by
local elites in extracting resources from other levels of government. In other
words, centripetal representation leads both to a more centralize public insur-
ance system and to a lower share of the economy being devoted to interregional
transfers.
18
The differential impact of representation appears to confirm the idea that, at
least partially, interpersonal and interregional redistribution respond to differ-
ent political logics. However, such is not necessarily the case in every union. As
the German experience illustrates, a union with large levels of both interper-
sonal and interregional redistribution is both conceivable and feasible. What the
analysis of over twenty unions presented in this section suggests though, is that
these cases tend to be the exception, especially in the developing world (Bera-
mendi and Diaz-Cayeros
2008
). While the ultimate reasons behind this divide
are yet to be ascertained, the degree of discretion in the use of interregional
transfers by local elites emerges as a critical aspect of the problem. The narrative
of the German response to Reunification reveals that a large share of transfers
to the East were tied to the implementation of specific programs involving
interpersonal redistribution (e.g., social assistance, public employment, income
support). By implication, in those unions in which this connection is formally
recognized and enforced, the two dimensions of fiscal structures tend to con-
verge into one, an image conveyed quite clearly by the analysis of the German
experience. By contrast, in those cases in which interregional transfers involve
resources to be used at the discretion of local elites, the trade-off between the
two ways of organizing and allocating redistributive efforts becomes starker.
18
For a related paper on the relationship between malapportionment and redistribution in feder-
ations, see Rodden and Dragu (
2010
).
