Explaining the Demand for Sovereignty

Why do groups want to secede and where are we most likely to see demands for self-determination? We propose an economic explanation whereby a tradeoff between income and sovereignty implies that, other things being equal, richer regions are more likely to want more autonomy and conflict arises due to a disparity between desired and actual levels of sovereignty. We provide simple empirical tests using new data collected at the level of second-tier administrative subdivisions in forty eight decentralized countries. We find a positive association between, on the one hand, relative regional income, regional population share, natural resource endowment, and regional inter-personal inequality and, on the other hand, observed sovereignty levels. Ethnically distinct regions have lower sovereignty, but this association is only conditional on controlling for the interactive effects between ethnic distinctiveness and regional inter-personal inequality.