What are the causes of widely different levels of democracy in the subnational units of national-level federal democracies? From Argentina to Brazil to India, democratic and less democratic states/provinces coexist side by side. Drawing on fiscal and rentier theories of democracy, I hypothesize that, by redistributing tax revenues disproportionally in favor of poorer or less populated subnational units, federal governments provide local incumbents in these districts with hefty rents that often are used to stifle democracy. Rents also make incumbents fiscally independent from, and consequently less accountable to, their constituencies. I assess this hypothesis using evidence from Argentina, a case of this type of "politically regressive fiscal federalism." The dependent variable, subnational democracy, will be measured through a survey of experts on the politics of each of the 24 Argentine provinces. The proposed survey draws on the tradition of national-level indices that code countries on the basis of expert assessments and secondary sources, extends it for the first time to subnational units, and improves on it by using multiple coders and by adopting a thick and multidimensional conceptualization of democracy. The experts to be interviewed are local, politically independent scholars and journalists. Each item in the questionnaire will be assessed by three to five experts per province. The results will be used to construct an index of democracy for each province. The explanatory power of the fiscal/rentier hypothesis and of alternative hypotheses will be assessed through a mixed-methods strategy, combining statistical analysis with qualitative case-studies. Regression analysis will estimate the relative strength of each explanatory factor and the goodness-of-fit of the theoretical model. This quantitative evidence will be used to select four qualitative case studies, which will permit to trace the causal processes at work and to refine the original theoretical model. Four innovations are contributed to the key but neglected subnational dimension of democracy: 1) the application of fiscal/rentier theories to subnational units, 2) the extension of the concept of rents from natural resources to fiscal federalism revenues, 3) the first thick measurement of democracy in all the subnational units of any country, and 4) an original operationalization through a survey of experts that improves on national-level indices. These innovations are generalizable to other federal democracies and to other policy-driven rentier situations. The broader impacts of this research include: 1) significant public policy implications, as the findings would point the way toward the design of economically and politically progressive institutions of fiscal federalism, 2) the fostering of partnership between scholars in the US and Argentina, and 3) the contribution to the discipline of a novel operationalization strategy, a new dataset, and hopefully original and correct substantive conclusions, all of which will be disseminated through publications and a web site. More generally, this research is expected to bring attention to and help redress less-than-democratic subnational situations in young federal democracies.
