Political and fiscal decentralization in western Europe: The dynamics of institutional development and change

This dissertation is about the determinants of changes in political and fiscal decentralization. While there are a huge amount of theoretical and empirical studies on the effects of decentralization, there are much few works studying why decentralization changes over time. There are only two empirical papers—Hiscox (2001) on political decentralization and Garrett and Rodden (2001) on fiscal decentralization—which concentrate on this question. Their hypotheses are based on the effects of globalization, a part of which I call demand-side explanations.; I work on a more inclusive explanation, which also looks at the supply-side of the changes—the political and institutional factors given that the institutional changes do not follow mechanically from economic and social changes. The interested political actors detaining power have a key role. On the empirical side, I study 12 European Union unitary countries because pooling developed and undeveloped countries may be misleading (Treisman 1999; 2000a).; Albeit some specific differences, important findings are consistent in both empirical chapters. First, the arguments about globalization find very mixed support. Globalization, if anything, induces political decentralization, but it is still not clear whether it induces fiscal centralization or decentralization. In sum, globalization can hardly be seen as the most important force behind decentralization, as some authors claim.; The strongest finding concerns the role of ideology. With this study I can safely say that left-leaning governments decentralize—in fiscal as well as political terms—more than their conservative counterparts. At the same time, liberal coalitions also favor sub-national governments more financially dependent than rightist governments do. This result is very telling about the specific options pursued by different parties and the policies they pursue.; First, this result shows that one cannot see decentralization as something similar to privatization. Rather I suggest that decentralization can be seen as an alternative to privatization, an alternative that makes it possible for left-leaning governments to avoid having to decrease the size of the public sector. This result and this suggestion confirm the recent comparative political economy literature that rejects the end of ideological differences between political parties in government.