The European Union - The Political Geography of Inequality - page 68

chapter offers a partial empirical evaluation of the microfoundations of the
theoretical model.
Second, the chapter addresses the interplay between interpersonal and inter-
regional redistribution in a union with a very heterogeneous economic geog-
raphy. A major implication of this topic's argument is that, given high levels
of economic specialization across regions and high levels of decentralization
of interpersonal redistribution, interregional transfers operate as an insurance
mechanism to protect the political and economic autonomy of different areas.
Therefore, the size and direction of interregional transfers should reflect con-
cerns about mobility within the union.
As the risk of undesired inflows increases, so should interregional transfers,
particularly toward areas where migrants originate. This chapter evaluates this
contention by analyzing the relationship between mobility and interregional
redistribution in the process of European integration.
The nature of the European Union's fiscal structure, I argue, is a function
of the combined effect of three factors: a very heterogeneous economic geog-
raphy; a centrifugal system of political representation; and the use of interre-
gional transfers as part of a broader strategy to limit population flows from
labor intensive, less productive economies to wealthier, skill-intensive ones. In
building this case, I proceed as follows.
First, I present an overview of the origins and evolution of the EU's fiscal
structure. The second section maps out how different elements of the theoretical
model operate in the EU context. It also outlines the logic behind Europe's fis-
cal structure. The third and fourth sections analyze empirically the two dimen-
sions of the EU's fiscal structure. Relying on a variety of micro and macro
data, the third section links Europe's geographies of insurance and inequality
to the decentralization of interpersonal redistribution. In doing so, particular
attention is given to the effect of geography of inequality on political actors'
institutional preferences. The fourth section addresses the relationship between
mobility and interregional redistribution in the European Union. Finally, the
last section brings together the core empirical findings of the chapter and dis-
cusses its theoretical implications.
THE EUROPEAN UNION'S FISCAL STRUCTURE
The specialized literature points almost unanimously to the unbalanced nature
of policy integration of the European Union. Whether the analysis focuses on
legislative output (Pollack 2003 ), policy dynamics (Hix 2001 ; Hooghe and
Marks 2001; Majone 1996 ) or the asymmetric adoption of alternative decision
making procedures (B orzel 2005 ;Cram1997;), a consistent picture emerges.
While market-oriented regulations have triggered the development of a more
integrated framework of internal security, such a spillover is yet to reach the
realm of interpersonal redistribution.
Figure 4.1 presents a summary of the patterns of integration across policy
domains. I use data from B orzel ( 2005 ). These data measure both the level