On Sub-nationalism

Pramit Bhattacharya has a nice piece in MintOnSunday about the positives of sub-nationalism, which fosters provision of public and common goods. He cites academic research to contrast Kerala and Uttar Pradesh, which were similar in the mid-19th century, but now have significantly differing levels of public goods.

The research Bhattacharya cites argues that the linguistic sub-nationalism that was formed in Kerala in the mid 19th century was responsible for the state’s high levels of public goods and development. The absence of such sub-nationalism has resulted in weak institutions and weak development in UP, he says.

He ends the piece saying that sub-nationalism is not always a good thing and can lead to secessionist tendencies. He cites the example of Assam, where sub-nationalism has actually hampered development rather than fostering it.

This discussion reminds me about last year’s “unofficial” referendum in Catalunya about whether to secede from Spain. The vote was unofficial since the Spanish Parliament didn’t authorise it, but there were strong signs of Catalan nationalism when I visited Barcelona last October. The Yellow, Red and Blue flag of Catalan nationalism hung from several windows. There was a clock in one of the main squares counting down to the referendum (which finally didn’t matter).

And while there were several emotional reasons for the demand for secessions, including repression at the hands of the “Castilians”, one of the main reasons was economic – the share of national spending on Catalunya was far less than the proportion of Catalunya’s contribution to the Spanish National Budget. The feeling of “why should we subsidise the rest of the country?” was rampant.

This little story illustrates both the positive and negative aspects of sub-nationalism. The negative is easy to see from the above – strong sub-nationalism leads to a strong “us and them” sentiment towards the rest of the country, and the region begins to resent the rest of the country, especially if the latter gets a larger share of the national pie. And this can lead to secessionist tendencies as is evident in Catalunya.

The positive thing about sub-nationalism, on the other hand, is that it subsumes groupism at smaller levels. A strong sub-nationalist feeling means that people think of themselves as members of that sub-nationalist group, and solidarity to any “lower level” groups weakens.

The problem with high solidarity among small groups is that it may lead to provision of private goods at the expense of public goods. When a place is strongly divided by caste, for example, each caste group wants to maximise the interest of the particular caste, and thus invests in a way that the caste gets a bigger share of the seemingly fixed pie.

When the solidarity is at the level of a state or region, on the other hand, the best way to develop the region or state is to provide for public goods or welfare schemes that span the entire state or region, and this leads to an expansion of the pie and the overall development of the region. In other words, when the “us” is a largish geographical area, it is more likely that investments happen in terms of public goods for the area rather than private goods.

Coming back to the example of Kerala, the strong Malayali subnationalism of the mid 19th century had the effect of pushing down casteism. Consequently, the groupism happened at a level (“Malayalis”) that was larger and more diverse than the caste-level groupism that happened elsewhere (like in UP) where there was no strong sub-nationlist movement. The lack of sub-nationalism in a place like UP has meant that casteist divisions in the region have remained strong, and solidarity at that level doesn’t lead to public goods or development.

Think of the nation as a hierarchy, of sub-nations and sub-sub-nations and so forth. And each person’s loyalty is divided in different extents up and down the person’s “chain”. And among these different layers, it is a zero sum game. Thus, strong loyalties at a particular level are resented both by levels higher and lower, and justifiably so. But the higher the level at which the loyalty remains, the better it is for the provision of public goods and development. Chew on it.

The Catalan Referendum

The results of the Catalan “informal referendum” are in, and show that over 80% of the respondents in the referendum have indicated a “Yes, Yes”, which means they want an independent Catalunyan nation. Of course, as pointed out here last weekend, this referendum doesn’t mean a thing, for there is significant selection bias in voting – for people in favour of secession would have had a much higher incentive to turn up on Sunday compared to those that were against.

So what does the Spanish PM Mariano Rajoy do now? Though this vote means nothing, one thing the “massive majority” does is to strengthen the case for the Catalans to press for a more formal referendum, one that is recognised by the Spanish Parliament. What this “massive majority” also does is to embolden the leaders of the Catalan independence movement towards becoming more hardline in their demands.

Spain can ill afford to lose Catalunya, for that is one part of the country whose economy isn’t as badly wrecked as that of the rest of the country. In fact, given complications in terms of membership of the EU, it may not actually be in Catalunya’s interest to be an independent nation – though that is another story. The best solution going forward would be what a referendum would have termed a “Yes, No”, that is to give Catalunya more autonomy as a “state” (right now it’s an “autonomous region”) within Spain.

Other regions of Spain such as the Basque Country have much more control over their finances than Catalunya does, and the Spanish government would do well to make such federalism uniform and give Catalunya similar powers. This would help maintain status quo over national identity, while conceding to the Catalans their biggest demand which is that too much of their tax money is going to fund the rest of Spain. Of course the rest of Spain will take a hit in terms of finances, but it can be worked out so that it is a gradual process and not sudden.

It is also worth examining the reasons behind the current wave of Catalan nationalism. There are two factors – firstly the Catalans resent that their tax money is being spent on the rest of Spain. When this combines with the fact that Catalunya is culturally different from the rest of Spain, and harbours an anger towards Madrid for what can be described as three centuries of “Castilian imperialism”, this leads to secessionist tendencies.

There are important lessons to be learnt from this for other countries which are also multicultural, and where one part (which represents a “different culture”) is significant superior to the other economically. There can be only one solution to keep such countries united – greater federalism, and to give the culturally-different-economically-superior regions belief that they are not being controlled by the “centre”. It is time for multicultural countries to embrace this rather than pretending to rule under the assumption that they are monocultural, and with an iron fist.

Selection bias in Catalunya?

Catalunya, where I spent two weeks last month, votes today in an “informal referendum” on whether to secede from Spain. This vote is non-binding after the Spanish Supreme Court declared an earlier “official referendum” called by the Catalan government as illegal. As I write this (11 pm IST; 6:30 in Catalunya), FT reports that there were “long lines to vote” in the informal referendum today. The same report in the opening paragraph mentions “with an overwhelming majority expected to back a proposal to break away from the rest of the country and form an independent state“.

Looking at it from a pure numbers perspective, this outcome is not to be unexpected. Consider two hypothetical voters and Barcelona residents Jordi and Jorge (the more observant reader might observe that these names have been chosen carefully) who are respectively for and against the secession. What are their incentives to come out and vote today, as against in a “real referendum”?

As far as Jorge is concerned, today’s vote doesn’t matter to him.¬†Given that today’s referendum is “informal”, which way it goes has, in Jorge’s opinion, absolutely no impact on his life. Thus, he will consider the time and energy he would have to expend in queueing up and voting today to be not worth it. And thus he will not bother. And get on with his life. If today’s referendum were “real”, though, Jorge would have every incentive to register his opposition in the hope that his vote would help tip the vote towards a “no”, and thus he would be voting.

What about Jordi? Even though Jordi knows that today’s vote is only “informal”, he wants to send out a statement that he is in favour of secession. The way he sees it, the larger the majority by which today’s vote will come out in support of secession, the stronger the message that will be sent to Madrid, which he hopes should sooner or later be forced to relent, and permit a real independence vote. As far as Jordi is concerned, today’s vote has tremendous signalling value, and to this end he has every incentive to expend his time and energy and queue up and vote!

Based on this more Jordis are likely to come out today to vote, while less Jorges are likely to do so. Which means that today’s vote, thanks to the selection bias of one side being much more disposed to vote than the other, is likely to throw up a skewed result! Thus, it makes sense to treat the results with some salt.

But what about higher order effects? It is not hard for Jordis and Jorges to see what I’ve written above. Knowledge of this is not likely to change Jordi’s stance – just “victory” in today’s referendum is not enough for him. He is using today’s vote to primarily make a statement and the larger the “majority” that can be shown in favour of a “Yes” vote, the better it is for him. So the second order effects will not affect Jordi.

What about Jorge? He understands that while his vote doesn’t really matter since today’s referendum is not real, he knows that most people in favour of the referendum are likely to be voting today. Thus, the referendum is going to show an inflated majority in favour of “Yes”. So should he vote today to balance things out? On the one hand the effort might be worth it in terms of reducing the majority for the “Yes” vote. But then again, Jorge will realise that the selection bias in today’s vote is very very apparent, and his effort in marginally reducing the majority in favour of “Yes” may not actually be worth it! And so he will not vote.

So it is clear that today’s vote will show a significant majority in favour of secession from Spain, but that this is likely to be vastly overstated and very different from what things would be like had today’s vote been real. In that sense, if Spanish Prime Minister Mariano Rajoy and his advisers are smart, and realise the selection bias that is inherent, they can render today’s “informal referendum” rather pointless.