NOTE

Ten Lessons from the Scottish Referendum

by Jacob Funk Kirkegaard | September 23, 2014

The 55 percent majority that rejected Scottish independence was perhaps not so lopsided as to banish all Scottish nationalist dreams of another vote someday. But it was more decisive than many opinion polls had predicted. At least 10 lessons can be drawn from the process.

1. Risk aversion and fear of the unknown works among rich and aging populations.

Secessionists in Scotland and elsewhere face a powerful status quo preference among those most dependent on governmental services, especially women and the elderly, and especially in health care, child care, and old-age services. Alone in the ballot box, the “undecided” tend to break for the status quo, suggesting that polls are biased in favor of the separatists ahead of the election.

2. Incumbent governments should agree to as little as possible with separatists ahead of time.

Political and economic elites face difficulties in convincing voters about the risks associated with independence. They should refuse to negotiate with the separatists about the details of a potential breakup ahead of the vote, maximizing uncertainty about the risks and generating a negative market reaction, as occurred in the United Kingdom. Financial market volatility and market declines are a far more convincing conveyer of the risks of independence than any politician can be.

3. The emotional case for the status quo can be weak compared to the romantic adventure of founding an entirely new state.

Instead of a “yes” vote for independence, foes of independence should try to frame the question as: “Should Entity X (Scotland) remain part of Entity Y (the United Kingdom)?” This will make the case to stay together more positive.

4. Third options will often be appealing.

If incumbent governments are afraid of risks or are certain of a favorable outcome, a third “middle of the road” option between the status quo and independence will often be victorious. A marginal shift toward more regional autonomy will often appeal to dissatisfied but risk-averse voters. For Prime Minister David Cameron, such a third option might have eased the political pressure to promise additional decentralization at the last minute to avert a vote for independence. A majority for a third option may diminish popular support for outright separatist movements. As for a potential UK referendum on EU membership, Prime Minister David Cameron has promised to renegotiate Britain’s relationship with the European Union, effectively raising the possibility of a third option on the ballot.

5. The European Union has a powerful influence on European separatist referenda.

A referendum on independence is strictly a member-state issue. Other EU or euro area members have no direct say. But the European Union/euro area influences the outcome by raising the issue of the status in the European Union or the euro area of any new independent country. Unanimous backing of all EU members is required for any state to join, even if that state secedes from an existing member. (A series of objective political and economic criteria must also be met.) In theory the European Union could adopt grandfathering provisions for new members to smooth the process. But with other member states having their own separatist issues, region-wide political goodwill supporting such a step is hard to imagine. Thus a prolonged readmission period of five or more years seems likely for new independent countries. Another disincentive for potential secessionist entities like Catalonia is the risk that, not being a part of the European Union, they might lose access to the European Central Bank’s liquidity for their financial sectors.

6. Unsuccessful separatist movements will continue to be a political distraction and source of instability in Europe.

Formidable political obstacles remain for independence movements, and they look destined to fail. Yet other powerful structural changes suggest that more new movements will try. These factors include:

a. Functional emptying of the state: EU integration and euro membership are creating a shift in government from the national to the supranational level. Assuming that a new independent state can be grandfathered into EU/euro area membership, the institutional bar for establishing a new country is lowered because the European Union will be supplying a good deal of the needed governance and regulatory structures.

b. Rise of social media: Social media give separatist movements a powerful outlet to circumvent the antisecessionist bias of traditional national media.

c. Distance to existing and new elites: It is often more politically appealing to be governed by the distant devil of Brussels than one’s own elites. Thus separatist movements in Europe can campaign against their current governing rulers and advocate EU membership, despite Brussels being even further away. (An arguable exception to this argument would be the case of the Flemish region in Belgium.) Combined with globalization—which many voters see as shifting power too far away—the perception of distant elites being preferable to less distant elites could fan separatist sentiments.

7. Even if independence fails, the status quo will be altered.

National capitals will be forced to agree to more decentralization sanctioned by a third option on the ballot. Such a course seems likely with Catalonia and Spain.

8. A newly federalized United Kingdom looks more likely to stay in the European Union.

By agreeing to devolve more powers to Scotland, the UK government is heading toward a federal state. UK stability demands a settling of the so-called “West Lothian Question”—i.e., whether members of parliament from Scotland, Wales, and Northern Ireland can vote on matters that affect England only, while English members of parliament have no vote on similar matters that concern Scotland, Wales, and Northern Ireland. The design of a new federalized governing structure for the United Kingdom remains to be seen. If each region gets an equal allocation of votes on important issues (the minority protection inherent in federalist structures), as states in the US Senate have, the dominance of England in the United Kingdom’s external affairs might be greatly diminished. Scotland and Wales are unlikely to back departure from the European Union, as favored by many in England. Thus the English may have to pay the price of keeping the United Kingdom in the European Union in order to keep the United Kingdom together. A federalized United Kingdom would usher in more disputes over “states’ rights” between England and the rest of the nation than between England and the European Union. Belonging to a federal state—as is arguably the case with Germany—would thus make it more palatable for the English to stay in the European Union.

9. You can be a loser, even if you win a separatist referendum.

Alex Salmond, leader of the Scottish Nationalist Party, lost the referendum and has appropriately already resigned. Cameron won, but he has been politically weakened. Fellow Conservatives are asking why he gambled and refused the third option on the ballot and let his predecessor Gordon Brown make the referendum a choice between independence and greater autonomy, abandoning the status quo that he had pledged to preserve. The Labor Party and its leader, Ed Milliband, campaigned strongly for a no to Scottish independence but are also weakened. Many Labor members will not look favorably at a process leading to a federal United Kingdom. England’s powers in a federation might be diminished in such a process, but England still constitutes most of the UK population. With limited chances to win an election in England alone, Labor might lose its ability to win on most important issues in the United Kingdom. Tellingly, the only political winner in UK politics from the Scottish referendum seems to be former Prime Minister Brown, who in fighting Scottish independence found something to light his political firebrand again.

10. Sports stars should keep their mouths shut in referenda campaigns.

A sports star making a good living from his/her physical talents and ability to inspire fans and enjoy a home court advantage should keep quiet about separatist politics. The biggest loser is tennis star Andy Murray, who announced his support for independence on Twitter at the end of the campaign. Center-court crowds at Wimbledon are not likely to forget that, if he ever faces Roger Federer there again!

Copyright 2014 the Peterson Institute.