Fiscal federalism, social identity and place-based resentment

We highlight the importance of social identity and place-based resentment rather than economic positions to explain preferences for interregional fiscal redistribution. We use the 2019 Confederation of Tomorrow survey to study the equalization programme in Canada, the main vehicle for interregional fiscal redistribution in the country. We find that among respondents living in richer provinces, support for equalization depends on identification towards the province (relative to Canada) and on the perception of Quebec, the province seen as an 'out-group' benefiting from the programme. Among recipient provinces, support for interregional fiscal redistribution is high, regardless of identity.