Social Identification and Redistribution in Heterogeneous Federations: Evidence from Germany and Belgium

Recent evidence of increasing income heterogeneity within developed countries has reignited debates concerning the redistribution of income and wealth. In this article, we contribute to this debate by assessing the role of individuals' jurisdictional identification for their preferences towards intra-federation redistributive financial flows. Incorporating insights from social identity theory in a model of redistributive taxation, we show that federal, rather than local, identification can lead individuals to shift their redistribution preferences independent of their narrowly-defied personal economic interests. Moreover, contrary to conventional wisdom, welfare state support will sometimes be decreasing in national identification. We empirically assess these predictions using individual-level data from the 2008 German General Social Survey (ALLBUS) and a 2013-2014 survey among Belgian local politicians. Our findings provide strong support for the model's core predictions in both settings.