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an uneven geography of inequality, drives exclusively the selection of fiscal
structures. As the process of coalition formation occurs primarily within dis-
tricts, provided that regional leaders have the institutional ability to veto any
change against their core supporters' interests (SQ1), the polarizing effects of
the economic geography imply a conflict of interests between districts that will
yield, as a result, a more fragmented fiscal structure. For example, consider the
pattern of preferences summarized in
Table 2.1
. Under SQ1, assuming that the
region is relatively more equal than the rest of the union, it is straightforward
that the elites of the wealthier region of the union (B) have no reason to give
up fiscal independence. In turn, a reduction in the value of
under conditions
of centralization (SQ2) will increase the likelihood of success of the political
push to decentralize redistribution led by the leaders of B. In conclusion, under
centrifugal representation a diverse economic geography translates directly into
the adoption of more decentralized systems of redistribution.
The nature of coalition formation changes as the electoral weight of
national elections (
) and the cost of intra-party conflict increase. Accord-
ingly, national party elites are stronger and need to respond to a pivotal
voter group that cuts across specific regional boundaries. In turn, as politi-
cal conflict revolves around a group that is not territorially localized, the main
lines of political competition are drawn along income groups as opposed to
regions.
When centripetal representation is at its highest (
1), the formation of
the political will depends much less on the previously articulated preferences
of regions, and much more on how parties target population subgroups that
cut across regional boundaries. If representation operates under plurality in
a common national circumscription, parties will target the union's median
voter. If representation works to preserve proportionality, national elites will
devise a combination of interpersonal and interregional redistribution as close
as possible to the interests of the median legislature of the winning coalition
(Austen-Smith and Banks
1988
; Iversen and Soskice 2006).
In either case, centripetal representation downplays differences in terms of
territorial interests within income groups on both sides of a divide along the
lines of interpersonal redistribution. As a result, the diversity of institutional
preferences across territories is dominated by contentions that occur mainly
along class lines. In terms of the model, as political alliances are much more
likely to be class based, specific distributive interests of certain regions are much
less likely to be the primary concern when adjusting redistributive institutions
to changes in the geography of economic inequality. Party strategies are driven
by national elites with lesser incentives to accommodate their institutional
proposals to the interests of the pivotal voter of any particular region. This is
consistent with the predictions emerging from the results in (6) and (7).
In a status quo of decentralized redistribution (SQ1), centripetal represen-
tation works to overcome the resistance of local elites to centralize redistribu-
tion. In contrast, in a status quo of centralized redistribution (SQ2), centripetal
representation reinforces the likelihood that national elites will reject fiscal
=
