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economic dimensions of reality. The absence of a proper theoretical analysis
of the relationship of interest leads not only to misconceive correlations as
explanations, but also to the understanding of politics as a self-referential
realm. This study has illustrated the limitations of such an approach.
A second set of implications concern institutional change. The comparative
study of the evolution of fiscal structures suggests that the contrast between
punctuated equilibrium theory and historical institutionalism as mutual exclu-
sive models of institutional change is a rather artificial one (Pierson
2004
;
Thelen
2004
). As illustrated by the cases of Germany and North America,
sharp breaks and long-term endogenous changes interact and complement each
other as sources of change and adaptation. In accounting for change one can-
not do without the other: in the absence of exogenous shocks or constitutional
moments, causal identification becomes nearly unfeasible; without looking at
past political and institutional legacies, reactions to sharp breaks are hard to
understand.
Understanding well this interplay is crucial in large part because of another
implication of this topic: today's income distributions and systems of redistri-
bution are rooted much further in the past than standard datasets allow us to
measure or appreciate. In the same way that economic and electoral institutions
today project “a shadow of the XIX century” onto the politics of redistribution
(Iversen and Soskice
2009
), fiscal structures in contemporary political unions
often carry the weight of decisions adopted in the very early stages of welfare
state development.
The policy differences between Canada and the United States provide one
example. In the realm of unemployment insurance, those “small differences
that matter” (Banting
1997
, Card and Freeman
1993
) go back to the New
Deal, that is to the process and the logic analyzed in this topic. Similarly, the
institutional choices underpinning the Treaty of Rome (1957), largely deter-
mined by geopolitical considerations at the time (Rosato
2011
), cast a shadow
over current distributive contentions within the union, and its ability to trans-
form itself from a confederation into a federation. These results imply that
the theoretical and empirical investigation of the historical origins of today's
links between institutions and inequality should become a top priority in the
comparative politics of inequality and redistribution (Beramendi and Anderson
2008
; Rogowski and MacRae
2008
).
This implication applies to many aspects of the comparative study of dis-
tribution and redistribution beyond this topic. For instance, the relationship
between economic institutions and the distribution of income is worth revis-
iting from this perspective. From standard analysis in which economic insti-
tutions are the primary determinant of wage compression (Wallerstein
1999
),
the field has evolved. It is now recognized that the decline in inequality might
have preceded the adoption of comprehensive collective bargaining systems
and employers' coordination (Stasavage and Scheve
2009
). The possibility
that these institutional arrangements may be a function of pre-existing lev-
els of inequality, either among workers organizations (Iversen
1999
)oramong
