Federalism: Key Features, Issues and Considerationscpbrd.congress.gov.ph/images/events materials/Forum_August_16_2018/Learning_Sessions...Manila, Philippines Amanda Cats-Baril, Constitution

Constitution Building Processes

International IDEA u Manila, Philippines

Amanda Cats-Baril, Constitution Building Advisor, Asia Pacific

Federalism: Key Features, Issues and

Considerations


Overview •  Introduction and key features •  Division of Powers

–  Symmetry v. Asymmetry

•  Fiscal Federalism •  Constitutional Protection of Autonomy •  Representation at the Center •  Intergovernmental Relations •  Dispute Resolution •  Transition Challenges •  Conclusions


Introduction

•  Close to 40% of the world population lives in ‘federal’ countries –  Appx 25 federalist countries around

the world

•  As many models of federalism as there are countries

•  Any comparative ideas merely serve to trigger thought: –  Context-specific adaptation

common, necessary and desirable.


What is federalism?

Federalism involves organising a state so that: •  There are at least two levels of government: a Union government and States/Regions •  Each level deals directly with the people, or a section of the people, on matters assigned to it by the Constitution •  Each level has autonomy in the exercise of the powers and responsibilities assigned to it by the Constitution • Each of the levels of government is accountable to the people for the exercise of its constitutional powers and responsibilities

Federalism thus combines self-rule and shared-rule


Key Features of Federalism • A Constitution, which typically cannot be changed by one level of government alone • Two or more levels of government protected by the Constitution, each with own governing institutions • A constitutional division of legislative, fiscal, executive and (sometimes) judicial power between the levels of government • Participation by the states/regions or their people in central decision making (typically through a second chamber of the central legislature) • Provision for resolving disputes through an independent body


(Other) Features of Federalism

• The design and operation of a federation can give all groups a sense of ownership of the state as a whole • A properly functioning federation requires a culture of mutual respect, trust and co-operation between the levels of government • Federal Constitutions generally provide for revenue redistribution to the states/regions and for fiscal equalisation between them. • Freedom of movement within the federation • Protection of minorities within states/regions • State/regional Constitutions • Local government


Other Systems in Comparison

• In a unitary state a single, central government has final authority in all matters (even if it also decentralises some power). Eg. Thailand, Sri Lanka • A confederation is a union of otherwise sovereign states. Typically the centre is weak and does not deal directly with the people. Eg. US Articles of Confederation; European Union • Devolution or regionalism offer varying degrees of decentralisation within an otherwise unitary state. Eg. the United Kingdom, Spain, Papua New Guinea • Special autonomy arrangements give autonomy to a part of the country that otherwise operates as a unitary state. Eg. Aceh in Indonesia is an example.


Division of Powers •  At least two constitutionally protected

spheres of government: federal/central government and the regions/provinces/states –  Some constitutions also recognize and

regulate local government •  Categories of powers: Exclusive, concurrent,

residual •  Two levels of government necessitates

cooperation, •  Principle of subsidiarity: power should be

granted to the lowest level that can most effectively implement it


Division of Powers

Factors influencing assignment of powers to the center • “National’ character of power (eg, treaty ratification) • Cross-border effects of exercise of a power (eg river pollution) • Need for uniformity (eg weights and measures; copyright law) • Efficiency • Others?

Factors influencing assignment of powers to states/regions: • Can a power effectively be exercised within state/regional borders? (eg town planning) • Responsiveness (eg local infrastructure) • Power relates to local conditions/issues (eg culture, local transport) • Efficiency • Others?


Division of Powers Notes

•  Local government authority –  Challenges of resource transfers

(Nigeria) –  “Alliances” (Nepal)

•  Need for clarity – potential overlap = potential conflict

•  Principles for resolving inconsistency or overlaps

•  Accountability


Distribution of Executive Powers

• A federal distribution of powers involves executive as well as legislative power • States/regions administer their own legislation in all federations • Subject to any arrangements for intergovernmental co-operation

• In many federations, the Union also administers its own legislation (eg US, Canada) • In some federations, the states/regions administer much/some Union legislation (eg Germany, India, South Africa) • This requires • A decision about what kinds of Union legislation is administered by the states/regions • Trust and co-operation between the levels of government • A decision about the extent of Union control over the administration of its legislation

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Symmetric v Asymmetric Federations

•  The regions may have the same or varying degrees of autonomy

•  Asymmetry allows a level of flexibility cognizant of the intensity of demands for decentralization and the unique capacity and social, economic and political features of regions;

•  Even when a federation is formally symmetric, in practice, political power relations lead to de facto asymmetry;

•  Asymmetry in the distribution of powers and responsibilities may require equivalent asymmetry in the distribution of resources.


Benefits and Challenges of Asymmetry

•  Benefits –  Autonomy –  Conflict resolution –  Recognition of historic

sovereignty –  Can decrease secessionist

claims (external self-determination)

•  Challenges –  Regions with ‘lower’ levels of

autonomy may want more leading to a sense of competition and sometimes political crisis.

•  Spain, Catalonia wants to secure as much autonomy as the Basque region.

- Representation in the Center?


Fiscal Federalism •  Division of powers and responsibilities requires

accompanying resource allocation to enable effective discharge of functions

•  Fiscal imbalances between the center and regions, as well as among regions almost unavoidable

•  Federations, increasingly through the constitution, provide for ‘equalization’ mechanisms –  Whether best administered by independent body

debated •  Whenever it exists, asymmetrical power and resource

distribution may be taken into account in determining equalization goals and formulas


Distribution of Tax Powers

• Practice varies between federations • Each level of government imposes taxes for its own purposes (in US both levels of government can impose income tax and sales tax) • One level of government (usually the centre) imposes all or most taxes– though taxes can be collected by other level (Germany)

• Where one level of government imposes more of the taxes, it is necessary to consider arrangements for revenue sharing

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Revenue Sharing and Fiscal Equalisation

• Even where tax powers are distributed between the levels of government, there is usually an imbalance in favour of the centre • Revenue sharing therefore takes place in every federation, whether the Constitution provides a framework for it or not. • Revenue sharing distributes funds to other levels of government for general purposes • They may be distributed for specific purposes as well

• Most federations also make arrangements to equalise revenue between units, to enable similar standards to be achieved • This is sometimes described in terms of ‘solidarity’

• One important issue is the extent to which these decisions should be made politically or on the advice on an independent/expert/intergovernmental body

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South Africa as a Case Study

XXVI: Each level of government shall have a constitutional right to an equitable share of revenue collected nationally so as to ensure that the provinces…are able to provide basic services and execute the functions allocated to them. XXVII: A Financial and Fiscal Commission, in which each province shall be represented, shall recommend equitable….allocations to the provincial…governments from revenue collected nationally, after taking into account the national interest, economic disparities between the provinces as well as the population and developmental needs, administrative responsibilities and other legitimate interests of each of the provinces

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Regional Representation at the Center •  The shared-rule in federations takes the form of a

government representing the entire country •  It also includes delegates dedicated to representing the

government and/or parliament, or people of the regions •  This is often done through a second chamber (senate or

federal council) •  The representation in the senate could be based on equality

of states (US), or be weighted considering factors such as population size (India, Germany) –  Regions with smaller populations tend to be overrepresented

•  Shared rule may also take the form of representation in the executive, the judiciary and other institutions, such as independent commissions

•  Consider powers of Senate or Federal Council


Intergovernmental Relations

•  Cooperative institutions and practices: e.g. consultation, co-decision and coordination

•  Conflictual phenomena of tension, collusion, competition, control, and even coercion.

•  Both affected by history; culture; geography; ethnic, religious, and linguistic diversity, etc.


Intergovernmental Relations

•  Vary from country to country •  Evolve over time •  Can be formal or informal •  Horizonal or vertical •  Multilateral or bilateral •  Mechanisms can exist in different

sectors (i.e. executive, judicial, parliamentary, etc.)


Dispute Resolution •  The implementation of division of powers often

leads to misunderstandings and at times disputes

•  Intergovernmental relations platforms (as well as political party structures) can help

•  But some disputes may require authoritative constitutional interpretation –  Federal constitutions empower their highest courts to

resolve intergovernmental (both vertical and horizontal) disputes

•  The composition of the constitutional arbiter may therefore be controversial in federal countries, particularly in term of allowing the influence of the region


Challenges of Transition •  Implementation is a common

challenge in all cases of new constitutional arrangements

•  The central government must learn to respect the new constitutional boundaries, while the new regions must learn to claim their acquired authority, without awaiting central guidance

•  A ‘spirit’ of federalism, mutual respect and cooperation, and continuous interaction would have to be grown and nurtured


Considerations from Nepal


Conclusion

•  All federations have some common features, but often operate in different ways depending on context

•  The critical matter is ensuring that the division of powers and responsibilities is matched by appropriate divisions in resources

•  The importance of understanding, coordination and collaboration cannot be overstated

•  Mechanisms for dispute resolution intergovernmental relations are critical •  Implementing a federal arrangement is complex

–  Shifts in mentality and practices, legislative change, etc. •  Devil is in the details Federalism can both resolve and create conflict

Federalism: Key Features, Issues and Considerationscpbrd.congress.gov.ph/images/events materials/Forum_August_16_2018/Learning_Sessions...Manila, Philippines Amanda Cats-Baril, Constitution

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