Geoscience Reference
In-Depth Information
Spain targets the interplay over time between economic geography and fiscal
structures in two unions with opposite status quo in terms of political repre-
sentation. With the analysis of the EU the topic explores the fate of demands
to centralize fiscal policy and increase interregional redistribution in a very
centrifugal political system. In turn, the Spanish experience from 1978 onward
allows us to trace the fate of growing demands for more decentralized fiscal
structures and less interregional redistribution in a union with a much more
centripetal system of representation. These two cases elucidate the complex-
ity of the relationship between fiscal structures, political representation, and
inequality over time. However, with this strength also comes a weakness: it
is hard to identify natural experiments for the purpose of establishing causal
effects.
Natural experiments require, among other things, that changes in patterns
of economic geography must by and large respond to exogenous factors, and
that the system of representation at the time the exogenous transformation of
economic geography occurs must be credibly taken
as given
. In other words, in
the short run, representation itself is not part of the renegotiation of the fiscal
contract. Again, the comparative analysis of the Canadian and U.S. responses
to the Depression and the analysis of Germany's fiscal structure before and after
Reunification, provide two natural experiments to assess the causal mechanisms
involved in the transition from preferences to outcomes.
As I elaborate in detail in
Chapter 3
, both the Depression and Reunification,
and their implications for economic geography, are exogenous, and in neither
case did the system of representation itself become the object of political con-
tention during the subsequent period. In combination, these experiences help
explore the effect of distributive tensions associated with economic geography
at different points of the continuum between centrifugal and centripetal repre-
sentation. Finally, a set of cross-sectional statistical analyses explores whether
the conditional relationship between economic geography and political repre-
sentation holds for a larger number of political unions.
THE TOPIC'S CONTRIBUTIONS
The intellectual context of this topic is best delineated with reference to two lit-
eratures, both of which have gained prominence in political economy research
in the last two decades: the first concerns redistribution (Beramendi and Ander-
son
2008
; Iversen
2005
; Lindert
2004
)
25
; the second concerns the origin of
institutions (Acemoglu and Robinson
2006
;Boix
2003
; Bolton and Roland
1997
). The former has highlighted institutions such as electoral systems or
the contrast between presidential and parliamentary regimes as key factors
accounting for the variation in public good provision and redistributive out-
comes. The latter has developed an understanding of those same institutions,
including democracy itself, as the outcome of distributive conflicts. The former
treats institutions as exogenous; the latter, as endogenous. As discussed earlier,
25
For a more detailed review of the literature, see Iversen (
2006
).
