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Claim for Independence Determinants of Secessionism in the European Union

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Claim for Independence Determinants of Secessionism in the European Union Claim for Independence Determinants of Secessionism in the European Union Abstract Why do regions within a country want to secede, which are the factors that drive these proclaims? The regions face a trade-off between different forces. The “centripetal” forces, which are acting for the region to remain in the same country and the “centrifugal” forces, which are acting to secede the region from the country. Only the regions where the centrifugal forces overpass the centripetal forces are willing to pay the independence cost. In this thesis, I present the different factors (i.e. wealth, ethno-cultural factors and historical factors) that may make the electorate of a region support the claim for secession. By analyzing 128 elections in the lower chambers of the European Union countries using data on the regional GDPs, the historical languages and the independence history of the regions, the paper shows that these factors foster secessionist movements. Keywords: Secessionism, wealth, language. Master thesis. MSc International Economics & Business 18 June, 2019 Lluc Areny Naves S3724255 [email protected] [email protected] University of Groningen Supervisor Prof. Dr. H. H. (Bart) van Ark Index Introduction……………………………………………………………………………………1 Literature review………………………………………………………………………………3 Hypothesis……………………………………………………………………………………..8 “Wealth” hypothesis 8 Ethno-cultural hypothesis 8 Historical Independence hypothesis 9 Data and variables……………………………………………………………………………11 Dependent variable “Vote share” 11 Independent variables 12 Control variables 13 Methodology………………………………………………………………………………….16 Model 16 Estimation 17 Results………………………………………………………………………………………...19 Predictions……………………………………………………………………………………22 Robustness……………………………………………………………………………………24 Conclusion……………………………………………………………………………………26 Datasets………………………………………………………………………………………27 References………………………………………………………………………………........27 Appendix……………………………………………………………………………………...29 Appendix 1 29 Appendix 2 30 Appendix 3 32 Introduction After the dissolution of the Soviet Union (1991) and the Yugoslav wars (1991-2001), it seemed that the different regions of Europe had achieved a national state stability (Fukuyama, 1992). However, after almost two decades of solid recovery and growth driven by innovation, globalization. In recent years populations in various European regions have showed a desire to pursue their own identity by searching new ways of becoming independent of the national states they are currently part of. For instance, Kosovo became independent from Serbia in 2008, while the European Union did fail to recognize it as a new state because some of the member states refused to do so. This poses a dilemma: the European regions that form part of the European Union and want to secede will be recognize by the European Union and its national states. After the independence of Kosovo the secessionist proclaims have increased in some regions like Scotland or Catalonia. Scotland held a referendum in 2014 asking to the people “Should Scotland be an independent country?”. Were the scots who voted answered by 55,3% “no vote”. Nevertheless, due to recent events related to Brexit, in which the UK is going to leave the European Union, the Scottish parliament may want to repeat the referendum. Catalonia finds itself in a different situation. Since 2012 the various regional governments of Catalonia have attempted to achieve a referendum pact with the government of Spain. However, the different Spanish governments did not allow any pact. Taking the cases of Scotland and Catalonia as an example, this paper addresses some of the critical reasons behind secessionist movements across the European Union. The economic literature has suggested an economic explanation to secessionist sentiments. The richer or poorer regions want to secede from the central state because of a trade-off produced between the “centrifugal” and “centripetal” forces. The centripetal forces work for maintaining the country unite and the centrifugal work for separate the country. (Alesina & Spolaore, 2003) In addition to, the economic explanation, cultural or historic differences between the regions and the central state can also play a role on the electorate. Creating a steeper difference on the preferences of the citizens in the different regions of a state (Desmet et al, 2011) Finally, the thesis wants to show the main factors, which make some regions in the European Union of the 21st century, have public support for independence. 1 The paper is organized as it follows. The first part will consist on a literature review, which will present the main contribution of the economic theories about secessionism and its models. The second part presents the hypotheses. Thirdly, the Data and Variables chapter explain the inputs used in our regression model. The fourth part presents the specification and the tobit model that is used to fit the data. The fifth chapter will present the outcomes of the regressions. The sixth part contrasts the predictions of our model with the actual electon results. The seventh part consists of two different robustness checks of the results. Finally, the conclusion is presented. Figure 1. Results of secessionist movements in Europe in the last elections. Results of the secessionists movements, with more than 10% of the vote share in its regions, in the last elections. France (2017), United Kingdom (2017), Spain (2016), Belgium (2014), Italy (2013). Source: Kollman, K., Hicken, A., Caramani, D., Backer, D., & Lublin, D. (2018). Constituency-level elections archive (CLEA). Own elaboration. 2 Literature Review The literature of secession and independence have different results and arguments when it’s applied to countries with non-democratic governments or countries with democratic governments. In this thesis, I will focus on the “democratic” governments because my study is focused on the European Union, assuming that the European Union member states are democratic states. Foley (1967), Romer (1975) and Roberts (1977) initiated the economic theory of secession in the 1970s. Their theories focus on regional conflicts over fiscal policy that arise from different income contributions of the regions to the central state and the redistribution of those contributions between the regions by the central state. According to the theory, the role of the government is reduced to the provision of public and private goods determined through the voting behavior of the citizens of the state. In the central state, poor citizens favor a policy of high income tax rate while rich citizens favor a policy of low income tax rate. The equilibrium of this income tax rate is reached by using the theory of the median voter1, according to which the preferred tax of the majority will be imposed on the state. Naturally, the equilibrium of this tax rate will not coincide with the preferences of some of the individual regions. As a consequence, this will create a conflict between the central state and the regions who do not agree with the equilibrium tax proposed. The conflict can result in the separation of the region from the central state, because removing the institutional constrains of the union allows the institutions of the region to create new policies closer to the wishes of its voters. (Bolton & Roland, 1997) The above argument was summarized by Alesina and Spolaore (2003). Who aim to determine which is the optimal size of countries. In the book, the force called “centrifugal force” refers to the force which accounts for the fact that large countries face more heterogeneous populations. In addition to the public goods argument, they found another force, which they define “centripetal”, this force can explain why the regions want to be united in one state. The centripetal force is explained by economies of scale, which benefit the region and the central state. In contrast the “centrifugal” forces are a handicap for the central state. Inevitably, these 1 The median voter theorem, which was develop by Anthony Downs in 1957, is an attempt to explain why parties on both ends of the scenario tend to gravitate towards the center. Downs, as well as economist Duncan Black, who proposed the theory in 1948, argue that politicians take political positions near the center in order to appeal to as many potential voters as possible. Under certain assumptions, the median voter wins. 3 two forces create a tradeoff that takes place it in the regions that want to secede. (Alesina & Spolaore, 2003) Alesina & Spolaore (1997) explain secessionism using a spatial differentiation model. The model induces some heterogeneity in the individual preferences of the public goods by assuming that the world consists in a line where the inhabitants are distributed uniformly. Countries correspond to a continuous subset of cuts of this line or segment. The political borders and country sizes are endogenously determined. In each country, a public good is provided in a fixed quantity and the location of this public good is determined by the majority of the votes. Applying the median voter theorem and with the assumption that individuals are uniformly distributed, the center of the country will be where we locate the public good, so individuals who are not living in the center of the country will face transportation cost. Although the location of the public good is the fairest, it will imply that the people who are living on the borders of the country will be indifferent with living in one country or another. Finally, secession is associated
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