Does Fiscal Federalism Deter or Spur Secessionist Movements? Empirical Evidence from Europe

Martin Rode, Hans Pitlik and Miguel A´ngel Borrella Mas

Publius: The Journal of Federalism, 2018, vol. 48, issue 2, 161-190

Abstract: Popular and scientific contributions often call for increased regional decision-making power to manage secessionist conflict, assuming that fiscally federalized 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.

Date: 2018
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