Spending to Win: Political Institutions, Economic Geography, and Government Subsidies, and reported the following:By chance, page 99 begins with a nice summary of the argument I make in Spending to Win. Discussing two subsidies funded by governments in France and Austria in violation of European Union rules that regulate state aid, I conclude that leaders implemented these subsidies because the benefits of doing so outweighed the costs.Learn more about Spending to Win at the Cambridge University Press website.The domestic benefits of these subsidies were large precisely because of the constellation of economic geography and electoral institutions. Together, electoral institutions and economic geography robustly predict the likelihood that a government will violate EU state aid rules – illustrating that domestic politics shape not only national economic policy but also international economic relations.This paragraph from page 99 nicely illustrates the main argument in Spending to Win. I argue that politicians’ willingness to selectively target economic benefits, like subsidies to businesses, depends on the way politicians are elected and the geographic distribution of economic activities. Based on interviews with government ministers and bureaucrats, as well as new quantitative data, I demonstrate that government policy-making can be explained by the combination of electoral institutions and economic geography. Political institutions interact with economic geography to influence countries’ economic policies and international economic relations. As a result, identical political institutions can have wide-ranging policy effects depending on the context in which they operate.
In the chapter that includes page 99, I explore the politics behind two subsidy programs in France and Austria. I use parliamentary records, industry publications, and local media coverage to elucidate the politics behind these two subsidy programs. Why focus on these two particular programs? As I write on page 99,Myriad subsidy programs exist. Given the ubiquity of government subsidies, it would be far too easy to cherry pick cases that best fit my theory. To guard against this, I use a methodical, multistep selection criterion.I go on to describe my selection criterion. I aim to convince readers that I did not cherry pick these two cases but instead investigate the universe of cases that meet the detailed selection criterion. Both subsidies provide evidence in support of my argument and illustrate the importance of electoral incentives and economic geography for economic policy-making. The two cases involve government subsidies to wine makers. Perhaps this is a chapter best enjoyed with a cold glass of Austrian Grüner Veltliner!
--Marshal Zeringue
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