Urban Spatial Layouts and the Decentralized Welfare State

• In Event: Geography and Political Preferences

Abstract

The vast literature on the ways in which inequality shapes voter preferences for redistribution has emphasized the placement of the median voter on the income distribution, the perception of unemployment risk and insurance, culture, religion, and altruism, among others. In this paper, I propose a new dimension that underpins voter preferences for the welfare state: physical proximity between income classes and localized risk from spatial spillovers. Constructing two district-level measures of "spatial distance" or heterogeneity in income classes, I examine the ways in which redistributive spending in Brazilian municipalities characterized by spatial homogeneity (i.e., segregation of the wealthy from the poor across districts) compare to that in ones that are spatially variegated in socioeconomic status. I pair these measures with municipal-level survey data from the Latin American Opinion Project (LAPOP) and original survey data collected on the spatial distribution of preferences for redistribution. The analysis tests two classic theories of welfare state formation: model of welfare as insurance against risk and that of welfare as redistribution characterized by "altruism" or affinity for the poor. I find that spatial proximity of income groups induces preferences for only certain categories of welfare spending, such as that on public security and pollution, yet has a strong negative effect on support for policies that directly target the poor, rejecting the "altruism" or social affinity hypothesis. In addition to the risk of income loss occasioned by shifts in employment structure or by increased trade integration featured in classical insurance models of redistribution, there are more localized forms of risk that stem from spatial spillovers or negative externalities across income classes. Using fine-grained municipal social expenditure for Brazil, I show that these localized preferences align with patterns in public spending.

Author

• Alice Z Xu, Harvard University