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Decentralized Governance, Constitution Formation, and Redistribution

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  • Erik Wibbels

Abstract

What determines the relative strength of central and regional governments? Why do centers engage in more or less geographically based economic redistribution? And why do some centers redistribute from urban to rural areas while others do the opposite? This research answers these questions with reference to decentralized politics at key constitutional moments. Much contemporary research underscores the importance of the intergovernmental balance of power – be it in taxing authority or decision making autonomy – on economic outcomes. Many features of that balance are rooted in bargains struck at the time of constitution writing. Here, I suggest that the key ingredients in such bargains are the number of conflicting geographically salient factor endowments, the distribution of inter-regional inequality, and the degree of intra-state inequality within rural and urban regions. The greater the level of factoral conflict, the more elites who engage in constitutional negotiations are likely to constrain the central government by providing for substantial regional veto authority. Higher levels of inter-regional inequality heighten demands for inter-regional redistribution. Given some level of regional demand for central redistribution, whether its net effect is in favor of urban or rural regions will depend on the coalitional implications of inequality within regions. I examine the argument in light of the U.S., Argentine, and Indian processes of constitution formation. Copyright Springer Science+Business Media, Inc. 2005

Suggested Citation

  • Erik Wibbels, 2005. "Decentralized Governance, Constitution Formation, and Redistribution," Constitutional Political Economy, Springer, vol. 16(2), pages 161-188, June.
  • Handle: RePEc:kap:copoec:v:16:y:2005:i:2:p:161-188
    DOI: 10.1007/s10602-005-2234-6
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    References listed on IDEAS

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    1. Engerman, Stanley L. & Sokoloff, Kenneth L., 2005. "The Evolution of Suffrage Institutions in the New World," The Journal of Economic History, Cambridge University Press, vol. 65(4), pages 891-921, December.
    2. Abhijit Banerjee & Lakshmi Iyer, 2005. "History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," American Economic Review, American Economic Association, vol. 95(4), pages 1190-1213, September.
    3. Brennan,Geoffrey & Buchanan,James M., 2006. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521027922, October.
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    Cited by:

    1. Minkler, Lanse & Prakash, Nishith, 2017. "The role of constitutions on poverty: A cross-national investigation," Journal of Comparative Economics, Elsevier, vol. 45(3), pages 563-581.
    2. Albert Solé Ollé, 2010. "The Determinants of the Regional Allocation of Infrastructure Investment in Spain," Chapters, in: Núria Bosch & Marta Espasa & Albert Solé Ollé (ed.), The Political Economy of Inter-Regional Fiscal Flows, chapter 12, Edward Elgar Publishing.
    3. Albert Solé-Ollé, 2013. "Inter-regional redistribution through infrastructure investment: tactical or programmatic?," Public Choice, Springer, vol. 156(1), pages 229-252, July.
    4. Santiago Lago-Peñas & Albino Prada & Alberto Vaquero, 2015. "On the size and determinants of inter-regional redistribution in European countries over the period 1995–2009," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(4), pages 845-864, November.
    5. Eric Ip & Michael Law, 2011. "Decentralization, agency costs, and the new economic constitution of China," Constitutional Political Economy, Springer, vol. 22(4), pages 355-372, December.
    6. George Crowley, 2012. "Spatial dependence in constitutional constraints: the case of US states," Constitutional Political Economy, Springer, vol. 23(2), pages 134-165, June.
    7. Jonathan Rodden, 2009. "Federalism and Inter-Regional Redistribution," Working Papers 2009/3, Institut d'Economia de Barcelona (IEB).
    8. Jonathan Rodden, 2010. "Federalism and Inter-regional Redistribution," Chapters, in: Núria Bosch & Marta Espasa & Albert Solé Ollé (ed.), The Political Economy of Inter-Regional Fiscal Flows, chapter 8, Edward Elgar Publishing.
    9. Albert Solé-Ollé, 2013. "Inter-regional redistribution through infrastructure investment: tactical or programmatic?," Public Choice, Springer, vol. 156(1), pages 229-252, July.

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