Unveiling vertical state downscaling: identity and/or the economy?

State rescaling may take a variety of shapes although scant research has been carried out into the mechanisms and economic incentives that underpin rescaling processes. Recent literature in economics, economic sociology and political economy has identified at least two broad rescaling mechanisms, namely the development of regional identity - operating at the cultural level and proxing preference heterogeneity-, and the heterogeneity in levels of economic development, which influence the extent of regional redistribution. This paper empirically examines the mechanisms of vertical state rescaling by drawing upon empirical evidence from Catalonia and the Basque Country, to explore the evolution of sub-state identity and the rise of inter-territorial fiscal grievances - weakening intraregional economic solidarity. Findings corroborate the idea that the combination of widening sub-national identity raises the costs of managing heterogeneous spatial identities and strengthens support for vertical state downscaling. Similarly, ending regional fiscal solidarity it is found to increase the average income of Catalonia by 37% and even 17% in the Basque Country. However, the effect of regional identity exceeds that of regional redistribution in explaining state rescaling support in the magnitude of one to seven. These findings speak to the debate on the formation of Europe, in that they reveal limits to regional redistribution and highlight the importance of a common spatial identity

A better understanding of the behavioural constraints that people face will help policy makers to more effectively target public policy interventions that aim to change their actions

Government interventions often have very different outcomes to those desired by policy makers. Joan Costa Font argues that the development of behavioural economics offers a means to more thoroughly examine the behavioural constraints faced by those who are targeted by specific policies. Behavioural economics is not only better equipped to account for failures but if applied to public policy, it could also give rise to more effective public sector intervention

The hedonic placebo effect of traditional medicines

To date, the scientific evidence on traditional medicines is scant and under-developed, yet, paradoxically individuals continue to use it and claim high satisfaction levels. What can explain this effect? Using self-collected data from Ghana we argue that variations in satisfaction across individuals can be attributed to the hedonic placebo effect gained from using traditional medicines, in which processes involved with its consumption are as important, if not more important, than measures of self-reported health outcome. Findings suggest that individuals’ health seeking behaviour should be evaluated using procedural, as well as outcome, utility

Does culture matter at all in explaining why people still use traditional medicines?

Why do individuals still use traditional medicines when modern treatments are available? Economic explanations for an individual’s use of traditional instead of modern medicines are scarce and often fail to consider explanations beyond the conventional. This paper puts forward an economic explanation for the use of traditional medicine. First, traditional medicines were the default form of health care available in pre-colonial times where industry influence was yet to develop. Hence, both those individuals who exhibit lower incomes and are left out of health insurance coverage are more likely to use traditional medicines. Second, cultural attitudes and ethnic group controls explain variation in utilisation, even among those who have health insurance. Results are suggestive of the validity of cultural interpretations