Spending to Win: Political Institutions, Economic Geography, and Government Subsidies

263 Pages·2018·3.054 MB·English

by  Stephanie J. Rickard

SPENDING TO WIN
Governments in some democracies target economic policies, like industrial
subsidies,tosmallgroupsattheexpenseofmany.Whydosomegovernments
redistributemorenarrowlythanothers?Theirwillingnesstoselectivelytarget
economicbenefits,likesubsidiestobusinesses,dependsonthewaypoliticians
are electedandthe geographicdistribution ofeconomicactivities. Based on
interviewswithgovernmentministersandbureaucrats,aswellasparliamen-
taryrecords,industrypublications,localmediacoverage,andnewquantita-
tivedata,SpendingtoWin:PoliticalInstitutions,EconomicGeography,and
Government Subsidies demonstratesthat governmentpolicy-making canbe
explainedbythecombinationofelectoralinstitutionsandeconomicgeogra-
phy.Specifically,itshowshowinstitutionsinteractwitheconomicgeography
to influence countries’ economic policies and international economic rela-
tions. Identical institutions have wide-ranging policy effects depending on
thecontextinwhichtheyoperate.Nosingleinstitutionisapanaceaforthe
pressing issues facing many democracies today, such as income inequality,
internationaleconomicconflict,orrepresentation.
Stephanie J. Rickard is an Associate Professor at the London School of
Economics.
political economy of institutions and decisions
SeriesEditors
JeffryFrieden,HarvardUniversity
JohnPatty,UniversityofChicago
ElizabethMaggiePenn,UniversityofChicago
FoundingEditors
JamesE.Alt,HarvardUniversity
DouglassC.North,WashingtonUniversityofSt.Louis
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(continuedafterindex)
SPENDING TO WIN
Political Institutions, Economic Geography,
and Government Subsidies
STEPHANIE J. RICKARD
LondonSchoolofEconomicsandPoliticalScience
UniversityPrintingHouse,Cambridgecb28bs,UnitedKingdom
OneLibertyPlaza,20thFloor,NewYork,ny10006,USA
477WilliamstownRoad,PortMelbourne,vic3207,Australia
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CambridgeUniversityPressispartoftheUniversityofCambridge.
ItfurtherstheUniversity’smissionbydisseminatingknowledgeinthepursuitof
education,learning,andresearchatthehighestinternationallevelsofexcellence.
www.cambridge.org
Informationonthistitle:www.cambridge.org/9781108422321
doi:10.1017/9781108381475
©StephanieJ.Rickard2018
Thispublicationisincopyright.Subjecttostatutoryexception
andtotheprovisionsofrelevantcollectivelicensingagreements,
noreproductionofanypartmaytakeplacewithoutthewritten
permissionofCambridgeUniversityPress.
Firstpublished2018
PrintedintheUnitedStatesofAmericabySheridanBooks,Inc.
AcataloguerecordforthispublicationisavailablefromtheBritishLibrary.
isbn978-1-108-42232-1Hardback
CambridgeUniversityPresshasnoresponsibilityforthepersistenceoraccuracyof
URLsforexternalorthird-partyinternetwebsitesreferredtointhispublication
anddoesnotguaranteethatanycontentonsuchwebsitesis,orwillremain,
accurateorappropriate.
ForShane

Contents
ListofFigures pageviii
ListofTables ix
Acknowledgments x
1 WhoGetsWhatandWhy?ThePoliticsofParticularistic
EconomicPolicies 1
2 TheUnevenGeographicDispersionofEconomicActivity 27
3 HowInstitutionsandGeographyWorkTogetherto
ShapePolicy 39
4 ExplainingGovernmentSpendingonIndustrialSubsidies 64
5 ThePowerofProducers:SuccessfulDemandsforStateAid 97
6 WhyInstitutionalDifferencesamongProportional
RepresentationSystemsMatter 134
7 ThePolicyEffectsofElectoralCompetitivenessin
Closed-ListPR 170
8 ConclusionandImplications 199
References 216
Index 236
vii
Figures
4.1 Marginaleffectofproportionalrepresentation(PR)on
subsidybudgetshares page87
4.2 Marginaleffectofdisproportionalityonsubsidy
budgetshares 91
5.1 Predictednumberofnon-EUcompliantsubsidies 103
5.2 Totalnationalgovernmentfinancialaidtothewine
industry,inmillionsofeuros 109
6.1 Marginaleffectofopenlistsonsubsidybudget
sharesinPRcountries 150
6.2 Variationinthegeographicconcentrationofeconomic
sectoremploymentinNorway 155
6.3 Marginaleffectofmeandistrictmagnitudeonsubsidy
budgetsharesinopen-listPR 165
7.1 Averagesubsidyamountpermanufacturingemployee,
2005–2012 174
7.2 ElectoraldisproportionalityovertimeinNorway 178
7.3 Largestgovernmentparty’svotemarginandsubsidies
peremployee,bydistrict 195
viii
Tables
3.1 Illustrationofempiricalexpectations page51
4.1 Effectsofinstitutionsandgeographyonsubsidybudget
shares 84
4.2 Effectsofvariousfeaturesofcountries’electoralsystems
onsubsidybudgetshares 89
4.3 SecondstageresultsoftheeffectsofPRonsubsidy
budgetshares 94
5.1 EffectsofPRonnon-EUcompliantsubsidies 102
5.2 ParliamentaryquestionsabouttheFrenchCognacsubsidy 115
5.3 ElectoralcompetitivenessinCharentes 119
5.4 Austrianfarm-gatewinesalesasapercentageoftotalsales 121
6.1 Effectofopen-partylistsonsubsidybudgetshares 148
6.2 Second-stageresultsoftheeffectofopen-partylistson
subsidybudgetshares 153
6.3 Effectofgeographicconcentrationonsector-specific
subsidiesinaclosed-listPRsystem 160
6.4 Effectofmeandistrictmagnitudeonsubsidiesinopen-listPR 163
6.5 Effectofmeandistrictmagnitudeonsubsidiesinclosed-listPR 167
7.1 Explainingthevariationinmanufacturingsubsidiesper
employeebetweenelectoraldistricts 194
ix