ABSTRACT
The European welfare state has been founded on the nation-state, within stable boundaries. The nation provided affective solidarity. The state provided the institutional capacity. Coterminous boundaries for the economy and welfare bounded social and economic interests and encouraged social compromises. With spatial rescaling, economic regulation, welfare provision and political identities have migrated to new levels. Regions and cities are presented as in competition for economic development. States seek levels of regulation above and below the state. This may lead to a ‘race to the bottom’ as regions deregulate and cut spending to attract mobile capital. New regional identities may undermine national solidarity. Theories of fiscal federalism have placing redistributive competences at the highest level to avoid this. Yet, there may be a race to the top as regions experiment in new forms of social provision. New forms of affective solidarity may emerge at new scales. All public policies, and not just explicitly social ones, have a distributive effect. Differences are emerging across substate territories in welfare priorities and distributional policies. These often depend on the constitution of regional policy communities and social compromises. There is no simple race to the bottom or to the top, but a variety of experiences.
