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Regional resources and democratic secessionism

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  • Gehring, Kai
  • Schneider, Stephan A.

Abstract

Although resources have been shown to influence secessionist conflicts in developing countries, their effect in established democracies has largely been neglected. We integrate regional resources and inter-regional transfers in a model of democratic secession, and show that relative regional income correlates positively with secessionist party success in a large panel of regions. To establish causality, our difference-in-differences and triple-differences designs exploit that Scotland and Wales both feature separatist parties, but only an independent Scotland would profit from oil discoveries off its coast. We document an economically and statistically significant positive effect of regional resources and rule out plausible alternative explanations.

Suggested Citation

  • Gehring, Kai & Schneider, Stephan A., 2020. "Regional resources and democratic secessionism," Journal of Public Economics, Elsevier, vol. 181(C).
    • Handle: RePEc:eee:pubeco:v:181:y:2020:i:c:s0047272719301343
    DOI: 10.1016/j.jpubeco.2019.104073
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    1. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
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    Cited by:

    1. Gehring, Kai & Kauffeldt, T. Florian & Vadlamannati, Krishna Chaitanya, 2019. "Crime, incentives and political effort: Evidence from India," European Journal of Political Economy, Elsevier, vol. 59(C), pages 1-20.
    2. Lacroix, Jean & Mitchener, Kris James & Oosterlinck, Kim, 2023. "Domino Secessions: Evidence from the U.S," CAGE Online Working Paper Series 676, Competitive Advantage in the Global Economy (CAGE).
    3. Vanschoonbeek, Jakob, 2020. "Divided We Stad: a Fiscal Bargaining Model for Divided Countries," MPRA Paper 101863, University Library of Munich, Germany.
    4. Kai Gehring, 2020. "Overcoming History through Exit or Integration - Deep-Rooted Sources of Support for the European Union," CESifo Working Paper Series 8129, CESifo.
    5. Nicolas Berman & Mathieu Couttenier & Victoire Girard, 2023. "Mineral Resources and the Salience of Ethnic Identities," The Economic Journal, Royal Economic Society, vol. 133(653), pages 1705-1737.
    6. Laia Balcells & Alexander Kuo, 2023. "Secessionist conflict and affective polarization: Evidence from Catalonia," Journal of Peace Research, Peace Research Institute Oslo, vol. 60(4), pages 604-618, July.
    7. Agneman, Gustav, 2022. "How economic expectations shape preferences for national independence: Evidence from Greenland," European Journal of Political Economy, Elsevier, vol. 72(C).
    8. Christan Bjørnskov & Miguel Ángel Borrella‐Mas & Martin Rode, 2022. "The economics of change and stability in social trust: Evidence from (and for) Catalan secession," Economics and Politics, Wiley Blackwell, vol. 34(2), pages 275-297, July.
    9. Daniel Aparicio-Pérez & Maria Teresa Balaguer-Coll & Emili Tortosa-Ausina, 2021. "Politics against Economics: The Case of Spanish Regional Financing," Working Papers 2021/15, Economics Department, Universitat Jaume I, Castellón (Spain).
    10. Joan Esteban & Sabine Flamand & Massimo Morelli & Dominic Rohner, 2018. "A Dynamic Theory of Secession," HiCN Working Papers 276, Households in Conflict Network.
    11. Friedrich Heinemann, 2021. "The political economy of euro area sovereign debt restructuring," Constitutional Political Economy, Springer, vol. 32(4), pages 502-522, December.
    12. Massimo Morelli & Dominic Rohner, 2023. "Natural resources and conflict: The crucial role of power mismatch and geographic asymmetries," Working Papers 698, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    13. Victoire Girard & Nicolas Berman & Mathieu Couttenier, 2020. "Natural resources and the salience of ethnic identities," NOVAFRICA Working Paper Series wp2007, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    14. Gehring, Kai & Langlotz, Sarah & Kienberger, Stefan, 2018. "Stimulant or depressant? Resource-related income shocks and conflict," Working Papers 0652, University of Heidelberg, Department of Economics.
    15. Kai Gehring & Sarah Langlotz & Stefan Kienberger, 2019. "Stimulant or Depressant? Resource-Related Income Shocks and Conflict," CESifo Working Paper Series 7887, CESifo.

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    More about this item

    Keywords

    Fiscal federalism; Inter-regional transfers; Redistribution; Secession; Separatism; Resources; Economic voting;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • N9 - Economic History - - Regional and Urban History

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