Andreu Mas-Colell, one of the most well-known living microeconomists and current “counselor” to the Generalitat (Catalán parliament), recently advocated Catalán secession from Spain. His argument is that an independent Cataluña would see higher economic growth than otherwise, not just during depressed economic conditions, but generally. I don’t think it’d be farfetched to claim that Mas-Colell has other ideological concerns, as well.
I’m writing a short literature review on something to do with Catalán nationalism — I haven’t decided exactly what yet, because I’m not that familiar with the literature (which is pretty large, and I’m only looking at English-language academic journals). Are there any studies on the economic impact of secession?
I’m no expert on either Spanish or Catalán politics, but most of the costs and/or benefits are going to revolve around differences in economic policy. Spain suffers from great regulatory burden — I’m not sure if this is something Mas-Colell has in mind —, but would an independent Cataluña do much better? I think that, from the perspective of a free market advocate, Catalán economic policy is much more likely to burden the private sector. Cataluña has been facing a declining economic performance, and I think it’s a stretch to blame Spanish policy on it. Regions like the Basque Country, the Balearic Islands, and Madrid have been doing comparatively well, where if Mas-Colell were right then you’d expect Spain in her entirety to suffer somewhat proportionally (of course, this is before the crisis).
Tyler Cowen comments and asks a series of questions. Something that stands out is that people still think about the politics of secession as if the same actions that were permissible 60+ years ago are likely to occur today. He mentions Spain’s historical propensity to “send the troops.” When was the last time this occurred? (I’d say the 1936–39 civil war, but the war wasn’t fought over Cataluña) It’s true that, as usual, some media sources have forwarded the notion that the Spanish military has threatened to intervene, but how likely is this to really occur? The last time the military tried to intervene with Spanish democracy, in February 1981, the coup was over virtually hours after it was launched. Around 5–6 years ago, some might recall J.L. Zapatero sacking the chief of staff (of the Ejército, I believe) for making similar threats.
These are new days. Unless economic conditions deteriorate to the point where democracy only exists in name (not likely), the military dilemma is unlikely to be an issue at all.
Is secession likely? It’s unconstitutional, and the central government will continue to vehemently oppose it. Most people I’ve talked to see it as unlikely, but I really don’t know. This is one of those situations that, as a Spaniard, I’m embarrassed to acknowledge that my knowledge is pretty limited. But, this situation, as far as I know, is unprecedented in Spain’s post-war history. My guess is that if “worse comes to worse,” the Spanish government will formulate some type of political deal to (at least, temporarily) reduce income transfers from high-GDP to low-GDP communities and halfheartedly meet “autonomy” pleas.
What will be most interesting, I think, is how central fiscal policy will respond to these political pressures. “Austerity” is probably somewhat at fault, since the country has been subjected to a pretty gruesome economic contraction; tax increases are usually more acute, and the government hasn’t really taken strong steps towards real market reforms. Maybe most importantly, there hasn’t been much progress in improving the balance sheets of Spanish banks. If things continue like this, the dramatic change in Spain won’t revolve around sovereignty issues, but around changes in fiscal policy.