Inequality-Preserving Federalism? Territorial Institutional Designs in Developing Federations

What type of institutional designs are necessary to reconcile class and territorial barriers to redistribution? While federalism ostensibly promotes economic development and regional equality, it weakens national-level redistributive capacity by delegating fiscal and political authority to regional administrations. Such limitation becomes all the more detrimental in developing federations, where regional disparities juxtapose with interpersonal income gaps, compounding structural inequalities in the territorially larger nations of the Global South. This article contributes to this debate by discussing the unintended inequality-enhancing effects of the combination of two compensatory dimensions of federal institutional design. It zooms in on legislative overrepresentation and subnational constitutional explicitness of welfare rights to account for varying levels of interregional and interpersonal economic inequality, respectively. After outlining the predicted effects, we assess them with evidence of Argentina and Brazil, two high middle-income developing federations, whose subnational units have played, in similar yet varying degrees, a kingmaker’s role in redistributive territorial politics.