Explaining Regional Autonomy Differences in Decentralized Countries

Why do groups want to secede and where is demand for self-determination most likely to arise? We argue self-determination demand is moderated by the projected economic costs of policy autonomy. The trade-off between income and sovereignty implies that, other things being equal, richer regions are more likely to demand more autonomy. This trade-off suggests that relative regional income is a key predictor of autonomy demands. We show evidence of this using new data collected at the level of second-tier administrative sub-divisions in 48 decentralized countries. Consistent with a demand-and-supply model of self-determination, we find that levels of policy autonomy are positively correlated with relative regional income, regional population share, natural resource endowment, and regional inter-personal inequality. Ethnically distinct regions have lower sovereignty, which could explain higher levels of conflict in these regions, but this association is conditional on controlling for the interactive effects between ethnic distinctiveness and regional inter-personal inequality.