Territorial Politics in Hard Times: The Welfare State under Pressure in Germany, Spain, and the United Kingdom

Abstract

The author argues that the design of decentralized political institutions shapes the effect of economic crisis on the welfare state. He proposes a simple framework for understanding the effects of crisis on areas under the responsibility of regional governments: their responses and mediating effects will vary with the financial system, degree of regional input into central decisions, and legal framework. Further, the ways in which territorial political institutions channel economic pressures should lead to changing territorial politics as the relative resources and credibility of governments change. The author discusses the influence of territorial political institutions on responses to economic crisis in Germany, Spain, and the UK. It is concluded that Germany is most likely to proceed unchanged, Spain might see the hardest landing due to the difficult finances of many regional governments, and devolution in the UK is economically sustainable and limits negative welfare-state effects but might be politically unsustainable. The conclusion suggests that welfare-state analysis should take more account of specific territorial political institutions, that further analysis should include local government, and that economic pressure might reshape territorial politics in at least some countries.