Fiscal redistribution is an essential step towards addressing inequalities

In this chapter, we sought to contribute to the literature on fiscal federalism focused specifically on cases of multinational (quasi-) federations. To do so, we first discussed the different concepts central to our argument. This then led us to defend the position according to which, in such (quasi-)federations, the stability of the constitutional pact depends on a dual equilibrium between a de jure and a de facto dimension. We then considered and compared the Canadian and Spanish redistribution systems to examine whether they create the necessary conditions for attaining and sustaining such a dual equilibrium. Finally, we proposed normative principles that should guide the construction and structure of an egalitarian fiscal equalization system, assuming it aims to provide and sustain a context of justice and fairness. The fiscal redistribution system of a multinational (quasi-)federation is a mechanism of fundamental importance. If it succeeds at creating an egalitarian fiscal equalization system, it is very likely to not only reduce economic inequalities between sub-state units, but, first and foremost, to create a context in which the partners of the political association are understood to be “equal in status,” which may lead to a reinforcement of the state’s stability and overall governance. Therefore, the fiscal redistribution system represents an essential constitutional pillar that any multinational (quasi-)federation ought to establish – just like recognition, linguistic rights, jurisdiction over immigration, internal and external self-determination rights, etc. – if it is to live by the core values and normative principles that drive multinational federalism.