Pablo Beramendi has contributed a major new argument about how the fiscal structure of a polity relates to its income distribution. Against the usual story that federal or multilevel political union and egalitarian redistribution cannot coexist, Beramendi argues in his book that the quality and quantity of redistribution in a political union rests on its fiscal structure. Three fiscal structures are available to elites: 1) centralization, wherein the central government collects taxes and controls interpersonal as well as interregional redistribution, 2) decentralization, wherein the regional governments control taxation and interpersonal redistribution and limit interregional redistribution, and 3) hybridization, wherein decentralized interpersonal redistribution combines with centralized interregional redistribution. Elites choose one fiscal structure over another depending on the combination of a) regional economic specialization, b) regional economic inequality, c) cross-region labor mobility, and d) the configuration (centripetal or centrifugal) of political representation.

If it sounds as though the theory has lots of moving parts, that is because it does. It does not lend itself to a neat causal diagram or two-by-two table (although to Beramendi’s credit, Figures 2.1–2.5 and Table 2.1 do attempt schematization). Indeed, the empirical material in The Political Geography of Inequality leaves empty many of the 16 cells implied by the 2x2x2x2 theory, providing opportunities for new scholarship that would further test the many implications of Beramendi’s argument. After an introductory chapter that sketches the theory and frames the book as a contribution to scholarship on federalism and redistribution by welfare economists, public choice theorists, and political economists, the second chapter develops the rationalist microfoundations of the theory by expressing the utility functions of voters in various cells of the 2x2x2x2 table. Proceeding deductively, the author shows how the preferences of voters and policymakers are conditioned, in the case of voters, by whether they are rich or poor, and whether they are rich or poor and living in a relatively rich or relatively poor region within the union, and, in the case of policymakers, by the organization of representation, and whether they represent a relatively poor or relatively rich region.

The heart of the book is four case studies: the European Union, North America, Germany, and Spain. The EU is a case of centrifugal representation, high interregional economic inequality, and high (potential) labor mobility. The North American cases are Canada and the United States, both with centrifugal representation, but higher cross-region mobility of the poor in Canada. Germany is a case of centripetal representation, high interregional economic inequality, and high (actual) labor mobility. Spain is a case of centrifugal representation, high interregional economic inequality, and consequent fiscal decentralization.

It is interesting to consider what the theory would predict for the empty cells, and the fifth empirical chapter does this with pooled time-series cross-section models of data from dozens of political unions, starting with those in the Luxembourg Income Study, and then turning to a truly global set of as many political unions as have available data on the key variables. This analysis shows that cross-regional economic inequality in a wide variety of political unions observed over a relatively long time span is associated with the decentralization of redistribution, but only where representation is centrifugal. Interestingly, the association reverses in centripetal-representation unions: Here, cross-regional economic inequality is associated with the centralization of redistribution. This very interesting result should spur social scientists to take up Beramendi’s challenge and conduct quantitative studies that attempt to replicate these results using tax-return data, as well as historical studies that trace the evolution of fiscal structures in other cases with distinctive economic geography and notable “exogenous” shocks, such as Switzerland, Australia, Brazil, and South Africa.

Among the book’s many admirable qualities are its promiscuous use of heterogeneous data, its irreverence toward methodological nationalism, its conceptualization of fiscal structure as redistribution, its recognition that we live in an endogenous world (p. 207), its injunction to think about space and place in understanding institutions and inequality, its elegant deductive logic, its clear presentation and evaluation of necessary assumptions (p. 47), and its wariness of “the constraining charm of the median voter” (p. 20). This list gives a good indication of who and what Beramendi is arguing against. Prime among these are those who would endogenize politics to economics (p. 16); he convincingly shows how economistic arguments lack the realism of geography (as really existing markets locate in really existing places) and politics (voters are not exchangeable across regions, and neither are policy elites). Indeed, a leitmotif is the awkward relationship of the book to economics: drawing on economic assumptions like rationality and equilibrium, and using economistic methods like natural experiments and instrumental variables, while winking at the reader in a way that reveals (apt) skepticism toward the methods, if not the assumptions. It could be argued that political science will have a lot of this sort of reconstruction to do now that economists seem to be moving on to the greener pastures of brain science and epigenetics.

The book’s faults are fewer. Although parsimonious and elegant, every binary variable at play here shares the problem of blurry boundaries between categories. For example, the distinction between interregional and interpersonal redistribution is not as clear as it could be (e.g., the EU’s transfers to farmers; p. 71). To a sociologist, the simplistic definition of class as rich/poor is frustrating (indeed it would be very interesting to think about a modern conceptualization of class, such as Kim Weeden’s, alongside Beramendi’s theory about redistribution). Readers will also be surprised, I think, by the absence of culture from the argument (largely missing are nationalism in the EU, racism in the United States, language in Canada, citizenship in Germany, and separatism in Spain). I think we can chalk up most of these faults to the book’s forced friendliness to economistic political economy (thus, strange constructions like “many black families find it rational to migrate to urban areas either in the North or in the West” [p. 113], and southern paternalism described as a “peculiar internal equilibrium” [p. 116]). Finally, while Beramendi’s take on geographical mobility—that it can spur redistribution between regions when rich and poor voters in rich regions fear an invasion of the poor from poor regions—is interesting and provocative, the measurement seems highly problematic. Mobility within a political unit is used to proxy mobility between political units (pp. 80, 114–15, 161), but we know these are very different. The use of outward mobility from a political unit (p. 100) is not much better, since we do not know from the emigration rate the destination of the migrants. Surely mobility is better measured as relational (dyadic or triadic over short periods of time), not as an attribute of political unions.

Faults aside, this book has arrived at the right historical moment, as the debate over the future of the EU, the convulsive Arab Spring, and even the current ballot initiative to create six Californias seem to destabilize fiscal institutions, representative structures, and economic geography. EU egalitarians might infer that they should advance centripetal representation, if redistribution is to grow from its currently tiny (< 1%) share of EU GDP. EU antiegalitarians might infer that they should resist strongly any such advance and preserve the near irrelevance of the European Parliament. The strength of these inferences suggests how much The Political Geography of Inequality should change how we think about redistribution in complex political unions.