Catalonia lacks an important right that most devolved or federated polities around the world have: a definite and undeniable control over a fixed share of taxation with clear limits to the power of the central government to transfer out money for equalisation. Following the Spanish constitution and what the Constitutional Court of Spain ruled on June 28, 2010 in the sentence 31/2010 for the unconstitutionality of 14 articles of the Statute of Autonomy of Catalonia, they are even unlikely to get it under the existing framework.

Constrained transfers

Some of the most successful examples of autonomy in the world have two features: a limited and very constrained ability of either the federal level and the member polity level to take money one another outside previously agreed ways for agreed reasons, usually set in constitutional law. Under such principles, federalism in Germany, Switzerland, the US as well as the autonomous regions and provinces in Italy (such as South Tyrol) are built.

This is often stated in clear forms with very detailed and scrupulous constitutional laws. All the statutes of autonomy in Italy have long lists of taxes and for each tax how much is withdrawn by the autonomous region and how much is given to the central state, a long list of competencies the central state delegates and constrains about spending of the polity. The Swiss federal constitution, in title III chapter 3 has detailed articles concerning the amounts of taxes that at most the confederation may levy and the percentage limits to the share of taxes the confederation may transfer to equalise the Cantons’ wealth and services.

Positive feedback loops…

These methods are so successful because they start a positive feedback loop. The fact that the local communities keep a fixed share of their money and the equalisation system is constrain reassures the local community that they own the product of their work, in opposition to a sense of “enslaved nation” that is often found in many secessionist movements. But most importantly, this keeps bad ruling attitudes at bay. The first concern of a ruler is not how to rule wisely, but how to keep ruling. They have to keep a share of indispensable supporters loyal, and rewarding them more than the competition would do is essential. How to address that easily? An easy system is the redistribution of the money made by a productive minority – whether they are geographically a region as Catalonia or widespread little communities, like the Jews before WWII – to the key supporters that keep the ruler ruling. Precise limits to the powers of federal authorities are meant to prevent that at the federal level. This makes the difficult path the only viable way for the ruler who wants to keep ruling: these limits are an incentive directed towards the increase of value and development, i.e. to work to craft better policies that create more wealth, a tiny fraction of which is managed by the federal authorities who may distribute it to keep the supporters loyal. No robbery to minorities.

…and negative loops

When the constitutional laws do not regulate redistribution and the electoral law makes it convenient for the ruler to find support somewhere and not somewhere else, the logic is even more perverse: in a mechanism where equalisation is made through such political means, there is often the case that you receive money only if you are in a demographic group that the government thinks to be valuable to keep their political seats. If you are irrelevant, no money. Remember how the Irish Great famine was a relevant concern to the ears of the average British politician?

Vagueness at the root of the problem

Spain and Catalonia instead are very vague about how to split the money in constitutional law and in statutes of autonomy as well, they seldom mention numbers, but have vague multiple references to a sense of national solidarity.

Vagueness in constitutional laws is a tool for the greedy politician to twist the political meaning of otherwise unclear and void sentences. What is solidarity? To what extent shall it be followed? How much should the central state redistribute the money of the devolved administrations? A change in the judges of the Constitutional Court may change the whole interpretation. This is further helped by the fact that unlike Italy or the UK, the statutes regulating the devolved administration are not constitutional laws, but subject to the Constitution.


The recently acquired offices of the Catalonia tax agency

A polity cannot make an effective autonomy if there is not a budget they can firmly rely on. This is true for both the central and devolved administrations. Fixed shares of taxes help an even and stable split. But Spain empowers the central administration even more, in the name of solidarity, as it was shown by the sentence 31/2010 on June 28, 2010.

The betrayal

Before June 28, 2010, the art. 206 comma 3 of the Statute of Autonomy of Catalonia was the following, in the translation offered by the Catalan parliament:

The financial resources available to the Generalitat may be adjusted to enable the State financing system to have sufficient resources to ensure levelling and solidarity with other autonomous communities, so that the education, health, and other essential social services of the welfare state provided by the different autonomous governments can achieve similar levels throughout the State, provided that they also make a similar fiscal effort.

In name of solidarity, the Constitutional Court – among the other things they did, such as that the term “Catalan nation” has no legal standing – cut the last part: provided that they also make a similar fiscal effort. This, effectively, seems an enormous backlash and an assault to the idea to limit budget to constrain the administrations to development.

Nobody has constitutionally set the magnitude of such adjustment by the State, which then becomes up to the Spanish government, while the requirement to demand similar efforts to the other communities is dropped. This is therefore a permit to act a policy of redistribution of someone else’s (the Catalans’) wealth – the easy path to rule, as said before. Instead of having strong constrains to find structural improvements, the federal administration may just pass money from the best organised to the least, without any need to improve the poorer areas, just feed them. You cannot be free and self-standing if you have to rely on tax equalisation systems that pick the money of someone else and put it in your pocket.

But if they want to always control your money while the local administration is the one that works for your benefit, why should you support the central State a day more? It is not that foreign affairs and military budgets justify unbound adjustments by the central State, as the law implies.

From the constitutional court to referenda

After such a blow to budgetary control, the events unfold. If you assume every party would act rationally in order not to rule necessarily wisely but simply in order to maximise the odds they will keep ruling what they rule or expand it, the current one seems a very likely scenario we were bound to reach. The PP cannot contradict himself, so they push for more unitary state. The Catalan independentists would have pushed for more independence to stay afloat, no party would have interest in empowering the people allowing citizen issued referenda which are evidently the only possible form of self-determination. so instead, the Catalan independentist forces call for a government-issued one, where of course there is a false dichotomy – where is the option for more autonomy? nowhere, stay or secede – which citizen-issued ones would not have had – citizen-issued referenda have always two options, in the countries they exist. But if the electors know they can have a better proposal, they vote no and gather signatures for a better proposal, whereas in government-issued ones there is not such chance and the elector has to go for the least evil, which is precisely for many the option to send away such exploitative behaviour.

Illegitimate act

Is the referendum declared illegitimate and organising it a criminal act? This makes the disaster of a pro-secession vote only more likely. Secessionist movements and eurosceptic ones live essentially by the thrill of transgression. It is like banning Communism or other extremist organisations: “if you do that, they go underground and it gives them an excitement that they don’t get if they are allowed to pursue their policies openly. We’ll beat them into the ground on argument” (Margaret Thatcher) and the only way to do so, is making the argument possible, alias a real binding vote to leave. Possibly like the provision in the art. 4 of the constitution of Liechtenstein, citizen-issued with a second vote on the secession agreement. In this way, once people realise how bad it is, they will recede from day-dreaming positions.

Would they still leave? Well, farewell, it means the central government was a very terrible ruler for them. Democracy is not the system that always ensures the best choices, it never shouts “dear elector, the problem is you!”. It should be just the system where those who suffer the decisions are those who decide on them and as the law affects everybody in a given area where it is effective, the local population is entitled to be the one deciding. Responsibility comes first or nobody ever becomes responsible and clings to vague statements for political survival or out of naive (and vague and arbitrary and essentially failed) ideas of power and economics.