chapter  7
9 Pages

Inequality and Territorial Politics: Summary and Implications

Summary of the Argument At a fundamental level, redistribution is an outcome of a process of bargaining among politicians. Of course, structural economic concerns affect the choice set of those politicians. However, nations under similar economic circumstances have made wildly different policy choices. This divergence is in large part explained by differences in politics. I have argued that politicians make different distributive choices because their political distributive logics are distinct. This logic is fundamentally shaped by institutional design. Under certain institutions, politicians have stronger reasons to deliver resources home. In others they are also appealing to a subset of the population, but their constituency is not so rooted in geography. Given these basic constituency ties, log-rolling to create national policy will be varied. In territorial systems, the logs are parceled out according to districts. In centripetal systems, the logs are parceled out to broad social groups regardless of location. These dynamics are reinforced by the greater difficulty in changing the status quo and forming a coherent majority coalition for reform in those fragmented, territorial systems. At a base level, then, territorial institutions may reduce the salience of and broad demand for national level redistributive efforts. Even while people recognize growing inequality, as they certainly have in the USA and Argentina in recent decades, this latent societal concern with inequality does not translate easily into transformative change. Thus the USA might have lower redistribution than that of Germany not because Americans have a unique culture or radically different views toward government’s role in economic opportunity and access, but because their coalition-building dynamics are different. Leftist US politicians may praise the distributive logic of social insurance systems in European social democracies while at the same time recognizing that pork is what gets them reelected. Leftist ideologues in Argentina must check their ideology at the door as well, and act as good agents of their provincial principals by bringing transfers home. In both the USA and Argentina, the designs of federalism, territorial electoral rules, and presidentialism all reinforce this logic. Related to this, I have argued that territorial institutions fragment power and place vetoes in the hands of territorial actors. The status quo bias of federalism

and presidentialism due to multiple constitutional veto actors, in particular, has been frequently recognized as contributing to lower redistributive effort. Territorial electoral rules have been recognized primarily for their ideological fragmentation of parties and thus their limiting of the extent to which parties will agree to change the (non-redistributive) status quo. I suggest territorial politics provide an important explanation for why constitutional and partisan veto actors’ preferences diverge. Representing the interests of regions provides an added distributive complexity to conflict on the left-right dimension. I have also argued that interregional differences in income and economic structure are important sources of divergence in preferences among territorial actors. The provinces of Argentina vary in the extreme in their economic productivity. The policy interests of the Buenos Aires region, while by no means unified, are certainly dramatically different than the policy interests of rural Formosa or La Rioja. This is one reason why the vetoes in territorial systems are activated-the actors have different preferences-and redistributive reform is thus less likely. Moreover, where policy compromise may not be possible on policy grounds alone, regional transfers and pork offer bargaining chips to agreement. Territorial institutions also fragment the latent national coalition that would benefit from redistributive reform, both organizationally and ideologically. According to Gerring et al. (2005), territorial institutions increase the coordination problems that inhibit national policymaking. Federalism provides an obvious example. In federal systems, groups pressing for redistribution must organize across sub-national governments with different policy environments and must coordinate to influence national policy. This is certainly a logistical challenge. Perhaps more importantly, territorial institutions also increase social choice problems in establishing what people prefer to the status quo. Territorial institutions inform different incentives among different groups and this is crucially shaped by interregional differences in wealth. Again, in federal systems, poor groups in rich regions may be better off pursuing policy change at the subnational level. Poor groups in poor regions need the rich regions to chip in to a national program. These federal political divides fragment the ideological solidarity of the redistributive coalition (Beramendi 2012).