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Martin Rode, Hans Pitlik, Miguel Ángel Borrella Mas
Does Fiscal Federalism Deter or Spur Secessionist Movements? Empirical Evidence from Europe
Publius: The Journal of Federalism, 2018, (2), pp.161-190, https://doi.org/10.1093/publius/pjx060
Popular and scientific contributions often call for increased regional decision-making power to manage secessionist conflict, assuming that fiscally federalised countries are less prone to disintegrate politically. From a theoretical standpoint this is not clear though, as federalism creates an institutional paradox where autonomous legislative and bureaucratic structures can potentially be used to make secessionism a viable strategy in the first place. In particular, the role of asymmetric territorial arrangements in this association is crucially underexplored at present. Using electoral data on separatist political movements from a large variety of European regions since the mid-1990s, our findings indicate that regions with comparatively higher fiscal and institutional autonomy are more prone to vote for secessionist parties. Accounting for possible endogeneity, asymmetric territorial self-governance seems to cause much stronger incentives to vote for secessionist platforms, while the association with fiscally more symmetric arrangements is surprisingly small.
JEL-Codes:H77
Keywords:Fiscal federalism, Secession
Research group:Macroeconomics and European Economic Policy
Language:English