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Home > International Relations in an Emerging Multi Lateral World > Conflict Resolution > Comparative Federalism
Conflict Resolution Comparative Federalism Draft Paper by Dr.Thomas O. Hueglin
When the twentieth century began, there were nine formally constituted federal states in the world: Argentina, Australia, Brazil, Canada, Germany, Mexico, Switzerland, the United States of America, and Venezuela. As the twentieth century comes to an end, this number has grown to twenty, with Austria, Belgium, Comoros, India, Malaysia, Nigeria, Pakistan, Russia, Tanzania, the United Arab Emirates and South Africa added to the club. Since these federations include some of the largest and most populous countries in the world, this means that more than half of the world’s space and almost half of its population is governed by federalism. A Federalist Revolution? So did Proudhon’s prediction about the twentieth century opening the age of federations turn out to be true after all? A lot of what has also been called this century’s ‘federalist revolution’ had to do with the break-down of colonial empires and the formation of a multitude of newly independent states after 1945. Most of these states were multicultural in nature due to the arbitrary way in which colonial powers had assembled their possessions. Federalism seemed to be the most promising way to accommodate this incongruence of national identity and colonial territory. However, only a few of these post-colonial federations endured as stable federal systems, many more ended in failure. Some broke apart, such as the United Arab States or the Federations of the West Indies. Others such as Libya or Indonesia were transformed into unitary and often autocratic systems of governance. The twentieth century also witnessed the rise and fall of communism. Among the communist states, only three were constituted as federations, the Soviet Union, Czechoslovakia and Yugoslavia. All three disintegrated after 1989, with only one new federation – Russia – emerging. In the Western world of industrialized democracies, on the other hand, at least two notoriously centralized unitary political systems have moved towards some form of federal order: Spain and, most recently, the United Kingdom. And there is the European Union as a novel type of supranational governance: with the European member states gradually, sometimes reluctantly, but nonetheless significantly ceding powers to Brussels, they increasingly come to look like the constituent units of an emerging European federal order. Understanding Federations How do we begin to make sense of such a rich diversity of federal experiences? Obviously, the basic organizational and normative principles that set federalism apart from unitary political systems cannot be sufficient to describe and explain this confusing array of federal systems in practice. In this chapter, therefore, we want to provide some analytical order. First, we shall introduce some basic criteria of analysis, or categories of federal organization. Secondly, these categories will be used to generate a framework of analysis, or typology of federations according to their geographic and historical place of origin. And finally, some contextual variables will explore further the stability of federal systems. Application of the criteria leads to the conclusion that there are four basic models of federalism: the American, the German, the British Colonial and the South American. In practice, these are all affected by three main contextual variables: the realities of country size; whether it is a federation of many constituent units or few; and how much of a problem is presented by demographic and/or economic imbalances between those constituent units.
1. Categories of Federal Organization Before the wide world of federalism can be sorted out and grouped together in a typology of federations, it is necessary to develop some broad comparative categories at least for the major similarities and differences. We suggest six such categories:
The Rationale for Federalization: cultural and territorial bases Federal states are the result of compromise among competing elites. In some federations, the compromise is about different cultural interests such as language, religion, or, more generally, distinct cultural histories. In these cases of cultural federalism, the motivation for federalization is the desire to build a strong union without giving up regional cultural autonomies. Switzerland, for instance, is subdivided into seventeen German, four French, one Italian and four plurilingual cantons. In Canada, the dividing line runs between nine Anglophone provinces and the Francophone province of Quebec. The Belgian constitution recognizes four linguistic regions: French, Dutch, German, and the bilingual capital region of Brussels. The rationale of cultural federalism is the establishment and maintenance of cultural peace. While most federations have initially been based on cultural compromise between modernizers seeking economic advantages in a national market economy, and traditionalists adamant about the retention of regional cultural autonomy ...., cultural differences have ceased to be the driving force of compromise in a number of federal systems. Instead, such federations have simply retained a territorial division of government. These are cases of territorial federalism. In Germany, for instance, traditional cultural cleavages between the Protestant north and Catholic south are no longer relevant political factors. The fifty states of the United States of America are culturally diverse, to be sure, but at least in comparative perspective, this diversity is not a prime factor in American federalism. The Australian federation may have been constructed on the basis of territorial rather than cultural principles of autonomy from the beginning. The rationale for the retention of territorial federalism is both democratic and pragmatic. Americans, for instance insist that the vertical separation of powers brings government closer to the people. They also simply accept federalism as a fact of political life. Dispersal of Power: presidential and parliamentary models Contrary to the concentration of power in the British parliamentary system, the American constitutional framers also believed strongly in the general idea of dispersing power among different branches of government according to the doctrine of the separation of powers. Constructing a system of checks and balances at the federal level of government in particular, they created a bicameral Congress with co-equal powers in the House of Representatives and the Senate, and a presidential system of separate executive power deriving its legitimacy from popular election as well. At the same time, they added to this horizontal separation of powers a vertical federal dimension. The American ‘compound republic’ therefore constitutes a case of plural federalism. Its general characteristics are a strong second chamber, and a pluralised system of intergovernmental relations among numerous and relatively autonomous agencies. Policy-making in the Congress depends on a large number of committees and subcommittees. Except for a few joint committees, these are kept separate for the House and Senate chambers. Decision making is not typically tied to partisan majority rule, instead relying on pluralised processes of bipartisan compromise. Federal public policy is based on plethora of mostly conditional grant programs the number of which can only be estimated. Federations embedded in the British parliamentary tradition, by comparison, continue to see parliamentary majority rule as the main source of democratic legitimacy. These are cases of parliamentary federalism. Executive power is vested in the cabinet sitting on the front benches of Parliament and supported by a party majority. Typically, as in the Canadian case in particular, the upper legislative chamber is weaker. All bills have to be passed by the Senate as well, but serious objections to a bill passed by the parliamentary majority in the lower House are considered as a violation of responsible government. There are fewer parliamentary committees with broader mandates roughly duplicating the cabinet structure. A few joint committees of both House and Senate are restricted to internal business of the legislature as a whole. Intergovernmental relations tend to become politicised and are conducted through high-level negotiations among executive leaders deriving their legitimacy from parliamentary majority power at both levels of government. Public policy is typically framed by fewer and more general agreements on transfer payments and cost sharing. Party discipline overrides compromise on regional policy preferences. Considerations of regional fairness are left to the political sensitivity of the Cabinet and Prime Minister. While the dual (horizontal and vertical) separation of powers in plural federal systems tends to disperse political conflict in a pluralised configuration of overlapping or cross-cutting interest cleavages, the adherence to majority rule and the need for intergovernmental cooperation more likely constitute conflicting operational principles in parliamentary federal systems. Coordination of Powers in the Legislative Process Federal systems vary significantly in the degree to which the lower-order governments participate in national decision-making. There are two distinct models of federalism pertaining to this question of regional participation in the federal legislative process. The American model is based on strict institutional division of powers. Congress and the States enjoy a formal independence from each other. Coordination can only occur through informal processes of intergovernmental relations. German federalism provides the other model. Here, the governments of the German Länder are direct participants in federal legislation because their representatives sit in the upper legislative chamber, the Bundesrat, which possesses co-equal powers with regard to all bills affecting constitutional Länder rights. German federalism therefore can be characterized as a system of interlocking powers. Coordination among the two levels of government is directly organized into the federal legislative process. Instead of relying exclusively on intergovernmental relations, this coordination takes place through mediation and compromise in a bicameral committee. Regional Representation: ‘Senate’ and ‘Council’ models. The comparison between the American Senate and the German Bundesrat leads to another and closely related distinction. One of the basic principles of federal governance is dual representation of the entire nation and its various territorial subunits, states, provinces, cantons or Länder, in a bicameral legislature at the federal level of government. But there are two very different ways of bicameral organization. One is based on the Senate principle. As in the American and Australian cases, for instance, Senators in the upper chamber are directly elected by the population living in these territorial subunits. There are, in other words, two forms of popular representation. The members of the lower house jointly represent the entire population of the federation. Senators in the upper house, on the other hand, represent regional populations. They have a mandate that is as free as the mandate of lower house members. In particular, they are not bound to instructions or any other form of guidance from regional governments. The principle of institutional power separation is maintained. The system of interlocking federalism in Germany follows an entirely different rationale based on the council principle. The members of the Bundesrat (literally: federal council) are instructed representatives of the Länder governments. In contrast to the American Senate, for example, where each state is represented by two senators, and each senator has one vote regardless of the size of the state she or he represents, the votes in the Bundesrat are weighted according to the size of the Land population, currently six, four or three. From its own ranks, each Land government appoints the same number of regular members to the Bundesrat as the number of votes it has. Because they are bound by the instructions of the Länder governments, the members of the Bundesrat cannot vote freely or individually. Each Land delegation must deliver its vote as a block vote. In fact, it is delivered by the leader of the delegation who often is the Prime Minister of the Land. The essence of the council principle is indirect representation of the regional population. It is not directly represented as in a senate but indirectly by its government. Most of the world’s federal systems have followed the American model of power separation and bicameral representation based on the senate principle. The German model of council representation and interlocking powers is unique — although it has found imitation more recently in the construction of governance in the European Union as well as in the new federal constitution of South Africa. Functional Division of Powers: legislative and administrative federalisms Interlocking federalism also leads to a functionally distinct division of powers. Following the institutional path of dividing powers, most federations construct a division of different legislative tasks. The responsibilities of the central government will typically include such ‘national’ concerns as monetary policy, trade and commerce, foreign and defence policies. The responsibilities of the regional governments typically include such ‘local’ concerns as culture, education and social policy. In these systems of legislative federalism, the legislative functions are divided among different levels of government. In their respective domains, each level of government is responsible for policy making in its entirety, from policy initiative and formulation, to legislation, implementation and administrative execution. Citizens are therefore confronted with two separate strands of public administration (or three in instances of local government jurisdiction). When dealing with a particular issue, unemployment insurance or driver license renewal, for example, Canadian citizens first need to know whether to go to a federal or provincial government office. German citizens need not consult the government pages of their telephone books in order to find out where to go. At least for the citizens, there is only one strand of public administration. Nearly all administrative tasks in the federation are carried out by the regional governments, or Länder. As in more orthodox federations, the Länder are autonomous in the administration of their own exclusive legislative power. However, they also are responsible for applying most federal laws and delivering most federal services. Depending on how a specific law has been stipulated, they do so autonomously in their own right, or on behalf of the federal government. In either case, they possess considerable discretion for implementation and execution. On the basis of what is for the most part general framework legislation at the federal level, they can pass specific laws of implementation and regulation. In cases of concurrent jurisdiction, they can also enact supplementary provisions. And it must not be forgotten, that most federal legislation, insofar as it affects constitutional Länder interests, can only be passed with majority Länder consent in the Bundesrat. In general terms, then, Germany has adopted a unique system of administrative federalism, functionally dividing the powers of both levels of government between framework legislation at the federal level and legislation concerning the implementation and execution of federal law at the regional level. Consistency and coherence are not upheld by centralized regulatory specification and supervision as is typical for Anglo-Saxon public law systems. Instead, German administrators rely on a tradition of extensive self-coordination ultimately overseen by the courts. All administrative acts are subject to challenge with regard to their constitutionality, conformity to superior statutes, equity and reasonableness. Style of Policy-Making: cooperative and competitive approaches The last category for a comparative inquiry into the institutional set-up and performance of federal systems pertains to the way in which federal and regional governments deal with one another. This is a question of cooperative federalism as compared to competitive federalism. In comparison to our other distinctions, the borderlines are more blurred here. There is cooperation and competition in all federal systems. All governments want to be successful. They will all use their powers to compete against one another on such matters and policy preferences seen as enhancing their respective electoral chances. They all understand perfectly well, however, that many policy initiatives in a complex and interdependent world will only be successful through cooperation. German federalism probably has gone farthest in this respect, by constitutionally prescribing cooperation for certain joint tasks such as post-secondary education and regional development. If there is a basic difference between cooperative and competitive federalism nevertheless, it can perhaps best be described as follows: In some federations such as Germany, Switzerland or the United States, there is a basic national vision both about the general direction of politics and policy, and about the underlying processes of achieving it, which is shared by both levels of government. Fundamental revisions of the constitution are rarely considered or undertaken. The rules of the game are accepted by all, at least in principle. A cooperative predisposition is at least the general norm of political conduct.
Often, and particularly so in federal systems following the parliamentary tradition, these differences are enhanced by party competition. If different majorities govern in lower and upper chambers of a federal legislature with co-equal powers, one may try to obstruct the political will of the other. Instances of such competitive partisanship have occurred in both Germany and Australia. Policy cooperation and intergovernmental relations can also be strained further when different party configurations tend to prevail at the different levels of government. In Canada, for instance, the electorate in almost every province shows distinct party preferences, and some parties only compete in provincial elections. In Belgium, even some of the major national parties have split up in regional-linguistic organizations. A final consideration must be given to interregional competition. In all federal systems, regional governments try to compete against one another for corporate investment by offering infrastructural and tax incentives, regulating union activities and so forth, or by allowing local governments under their supervision to pursue such strategies. They may also seek policy advantages for extraction and marketing of their natural resources. However, in large plural federations such as the United States of America, this is not seen as a violation of the federal spirit of cooperation. In federations with a relatively homogeneous tax, industrial and resource base such as Germany, at least before reunification, on the other hand, it is not typically an issue either. The situation is different in asymmetrical federations with significant socioeconomic as well as cultural cleavages such as Canada or Belgium again where competitive federalism can take on a highly divisive or even destabilizing character. Some of these cases will be discussed at the end of this chapter.
So far we have discussed some of the major distinctive institutional and operational features of federal systems, and we have called these distinctions categories because they are meant to demonstrate that the organization of federal systems follows a limited number of very basic classifications which are mutually exclusive in principle. In the real world, these classifications can combine in an almost infinite number of federal variations or types.
Following this line of argument, students of comparative federalism might as well throw up their arms and give up. It is possible, however, to cut through the maze by developing a typology of some major models. All federal systems have a specific geographic history.
In order to understand the nature of these federal systems, a few of our comparative categories need to be modified (see below). With a good deal of historical justification, but for purposes of simplification as well, all other federal systems can be treated as variations of these few basic models. How these basic models have been constructed on the basis of the comparative categories introduced in the previous section can be seen in a summarizing table. To begin this typology with American federalism as it developed in the United States of America poses some analytical danger. For obvious reasons, on the one hand, American federalism is the model of all federal models. As we shall see in chapter 3, federalist ideas and concepts had been developed well before the American invention of federalism as a modern form of government. But it was this invention nevertheless which gave the world a simple and practical blueprint to be followed in theory as well as in practice. On the other hand, and for just as obvious reasons, American federalism has remained an exceptional case. To treat it as the main model and principal yardstick, and to judge, as countless textbooks have done, all other federations as variations which either fulfill or fall short of the criteria established by the American model, bears the danger of shortchanging the significance of the other models in their own right. In no other federation is there such a strong ideological commitment to individual liberalism. In most other cases, the relationship between individualism and federalism is typically perceived as an ongoing tension between individual freedom and the regional identities and rights of provinces, cantons, states or Länder. In the United States, federalism is mainly seen as a governmental mechanism in which all powers play their constitutionally assigned part of promoting individual freedom. Territorial Federalism and Plural Power Dispersal. American federalism is therefore based on a territorial division of powers and not, or at least not primarily, on the retention of regional cultural identities. In the same vein, the emphasis of American federalism is on plural power dispersal and not on the balance of power among two different territorial constituencies, nation and states. The horizontal division of powers between the two Congressional chambers and the Presidency is more jealously watched than the balance of power between federal and state governments. The Senate is not only co-equal to the House of Representatives in matters of legislation, it also has additional powers such as confirming important Presidential nominations (including those of Supreme Court judges), ratifying treaties and, last not least, trying impeached officials including the President. The agenda of the American legislative process is primarily driven by virtually hundreds of committees and subcommittees which are in turn densely encircled by special interest lobbyists. Initiative often comes from caucuses such as the Black, Congress-women’s, Sunbelt or Conservative caucuses. These are informal networks of personal connections and mutual interest which shape the Congressional dynamic more than partisanship within or between the two legislative chambers... Because the American Constitution is constructed upon the principle of power separation, and the upper legislative chamber of the American Congress is based on the senate principle of popular representation by region, state interests have to rely on these pluralized agenda-setting channels of Congressional legislation as much as any other special interest organization. Moreover, it must be suspected that the influence of even the more important members among the so-called intergovernmental lobby in Washington, the Council of State Governments or the National Governors Conference, for instance, pales against the concerted pressure of corporate American on Congressional legislators. The same goes for the National Association of Counties, the National League of Cities or the U.S. Mayors conference. Intergovernmental relations, on the other hand, an expression often used coterminously with American federalism, permeate the American process of governance at all levels. They comprise all interactions between federal, state and local government. The main reason of this mostly cooperative form of American federalism (see the discussion below) are the hundreds of federal grant programs either based on shared cost financing, and/or embedded in federal guidelines, and requiring shared administration. The process remains based on a legislative division of powers, though: The Congress legislates, federal government departments set up the programs, states and local governments only participate in the implementation and administration of these programs. Given the efforts at all levels of government to reduce public spending and to balance budgets, the usually pragmatic and low key nature of intergovernmental relations has become somewhat politicized more recently. As the Congress seeks to reduce its grants commitments, state governors have gained a more prominent role in hearings and federal government offices, demanding that conditional strings attached to existing grants programs be removed and more autonomous policy power be given back to the states. This does not mean , however, that the end of the principle of power separation was in sight. The process remains informal and has been aided, at least during the Clinton years, by the personal connections between a majority of Republican governors and a Republican Congress. There is wide-spread consensus about the generally cooperative nature of American federalism. Some even invoke images of cowboys in the wild west as the beginning of a social tradition of shared partnership. Historically more accurate may be the view that American federalism evolved from nineteenth century dualism to twentieth century cooperation. Interpretations of early American federalism as dual federalism focus on the constitutional separation of legislative powers as well as on competition among the two levels of government in the use of their exclusive responsibilities. Twentieth century cooperative federalism is then seen as a pragmatic response to the realization that in a complex modern world policy making powers cannot be kept separate in watertight compartments. But even this interpretation of U.S. federalism as moving from duality to cooperative inter governmentalism is at least partly misleading. Cooperative federalism as it developed in particular since Roosevelt's New Deal legislation in the 1930s coincided with a process of centralization rather than cooperation of the basis of maintained structural balance. The Congress increasingly used the supremacy and commerce clauses of the Constitution in order to override the States Rights clause of the 10th Amendment (see chapter 6), and it was generally supported in doing so by the Supreme Court. As a consequence, states either had to comply with the centrally imposed regime of federal grants, and/or saw its authority bypassed altogether as the federal government began to deal directly with what it saw as the needs of local government. In other words, the allocation of all residual powers to the state level of government in the 10th Amendment - those powers not explicitly enumerated as federal powers, increasingly lost its meaning. The Congress today can legislate in almost any policy area it declares to be in the national interest. A further development has been a considerable judicialization of American federalism. The Supreme Court more than ever before has become the ultimate arbiter of what either level of government can or cannot do in order to regulate the lives of American citizens. Moreover, these decisions have not typically been rendered in consideration of the constitutional provisions regarding the vertical separation of powers. Instead, they were primarily meant to uphold civil liberties based on the Bill of Rights and the due process and equal protection clauses of the 14th Amendment (see chapter 7). More recently again, and again under the general political impact of a growing commitment to reduce the omnipresence of federal governance in American politics by a Republican-led Congress, the Supreme Court may have embarked, often on the basis of narrow majority decisions, upon a path of reversing the secular trend of centralization. However again, in line with the deregulatory spirit of neoliberalism, it would appear that this reversal is based on more limited interpretations of the federal government’s right to regulate trade and commerce rather than principled reconsiderations of the federal balance of power. In short, federalism in the United States of America appears to be in a flux at the outgoing twentieth century, and one might speculate whether the next century will reverse the secular trend of centralized cooperation. The overall impression of American federalism in the United States, however, at least as it evolved since the Civil War, is one of enormous continuity and stability. American politicians rarely raise fundamental questions about whether a constitutional document that is more than two hundred years old still serves the needs of its citizens in a world of rapid global change and interdependence. Glorifying incantations of the constitutional framers’ timeless wisdom abound instead. In particular and despite a growing trend of regional multicultural fragmentation, American federalism remains firmly embedded in its commitment both to the primacy of individual rights and a strictly territorial organization of politics. American citizens for the most part accept this state of affairs without much fanfare or enthusiasm. American political culture is driven by a unique degree of individualism, parochial nationalism, and extraordinary level of political cynicism and apathy. Judging by presidential elections, for instance, the rate of voter participation is among the lowest in the industrialized world. In part, that may be so because Americans instinctively know that the system of horizontal as well as vertical checks and balances works in protecting them against any excessive and lasting abuse of power. In part, it may also be so because — except in instances of a vibrant local political culture, they are rarely offered real choice.
The inclusion of such a unique country as Switzerland in this discussion of American federalism may appear absurd at first glance, and perhaps Swiss federalism should be treated as a model in its own right. However, an often-unrecognised number of fundamental similarities link the systems of the two countries. In the literature, Switzerland has always been treated as a paradigmatic case of cultural accommodation in a tiny plurilingual country. Its federal government is based on a permanent coalition of all major parties. Elected by parliament for possibly indefinite terms (because the coalition always remains the same), a cabinet of only seven members holds executive power. Among these, the presidency is shared on a rotation basis. At least outside the country, therefore, hardly anyone knows who the Swiss President actually is. And most importantly, the Swiss political system is more than any other based on direct democracy. Practically all important legislative decisions, up to 120 a year at all levels of government, are decided by referendums. However, in other important respects, Swiss federalism shows much affinity to the American model. First of all, Switzerland is an exceptional case in very much the same sense that the United States is. Since its own secessionist war in 1847 (see chapter 4), its political course has also been characterized by continuity and stability. Although the Swiss constitution is not as venerable a document as the American one, and is in fact changed frequently, these changes typically are pragmatic modifications to a working document and not radical departures from the treaded path of constitutional routine. Secondly, Swiss political culture is similarly parochial and nationalist. Neither politicians nor ordinary citizens like comparisons with other political systems. Voter participation is as notoriously low as in the United States. Swiss politics moves at a glacial pace of conformity. Thirdly and most significantly for a comparative assessment of modern Swiss federalism, the Constitution which essentially dates from 1848, was more closely modelled after the American Constitution than in any other federal system. Obviously at least at first glance, the Swiss political system is rooted in cultural rather than territorial federalism. Among the 26 cantons, 22 are strictly monolingual although three languages, German, French, and Italian, are recognized as official languages at the federal level. This means in practice that a French Swiss citizen moving to German speaking Zurich, for instance, must learn the language of that canton if she or he wants to communicate with cantonal or municipal offices. There are four plurilingual cantons, of which three are bilingual (German and French) and one trilingual (German, Italian and Romansh, a dying language spoken by less than one per cent of the Swiss population mostly living in remote Alpine regions). In these cantons, each municipal or rural commune decides on its official language. Yet at least two observations can be made pointing to a more territorial interpretation of Swiss federalism. One has to do with the territoriality principle of linguistic accommodation itself. As each subnational unit, canton or commune, decides for itself which official language will be used as the only one in offices and schools, there cannot be any recognition of cultural minorities within these units who are either unable or unwilling to move. The Anglophone minority in the Francophone Canadian province of Quebec, for instance, would hardly accept this as a satisfactory formula of cultural federalism. Indeed, one might argue that it is the strict adherence to territoriality which must be credited for Switzerland’s cultural and linguistic peace. The other observation focuses on elite accommodation. In culturally divided federal systems, most notably in Canada again, the cleavage typically runs through elites as well as the general population, and it is sometimes more driven by the former than the latter. A point can be made that the Swiss political and economic elites are uniquely unified across linguistic boundaries, in the system of multiparty coalition governance, in the federated boardrooms of the large Swiss banks and corporations, and in the militia system of national defence in which the officers’ corps is composed of the same political and economic elites coming together several times a year for military exercises. There is some tension between the dominant German Swiss (seventeen cantons and roughly 75 per cent of the population) and their French (four cantons; 20 per cent) and Italian counterparts (one canton; 5 per cent), but this tension is more about regional economic concentration than culture. Parliamentary or Plural Federalism? The distinction between parliamentary and plural federalism blurs as well. In principle, the executive branches at all levels of government are not elected separately by the people, receiving their mandates from parliaments instead. In the case of the federal executive, the seven members of the Bundesrat (Federal Council), this election takes place in the Bundesversammlung (Federal Assembly), a joint session of both legislative chambers, the lower Nationalrat (National Council) and the upper Ständerat (Council of the Cantons). In this respect, the Swiss political system clearly does not follow the American pattern of a horizontal power separation. But there are again several aspects of this system which liken it more to the American system of plural federalism than to the British parliamentary tradition. Switzerland relies on what has been called a system of consociational democracy. It is not governed by simple majority rule but by a grand coalition of all major parties representing more than two thirds of the members in both legislative chambers. The stability of this permanent grand coalition (without any chance for the electorate to vote for a different government) depends on its ability of finding compromise. Each participant effectively possesses a veto power that could bring the coalition to an end. In order to avoid this, the political process moves along the lines of strict proportionality and results in a pluralized regime of hearings, trade-offs among special interests, package deals etc. which, in other words, very much resembles the Congressional regime of policy making. An additional feature adding to the plural character of Swiss federalism is the constitutional recognition of the communes as a fully autonomous third level of government. As in the United States, local autonomy is not underwritten by a constitutional guarantee, and its range depends on cantonal law. Yet it is also more extensive than in most other federal systems: Cantons cannot merge municipalities of rural communes for administrative reasons as Canadian provinces and German Länder can. Any change of boundaries requires the consent of those affected. Communes also possess more far-reaching powers safeguarding their autonomy, including a right to impose taxes, including income taxes, and they can decide tax rates autonomously according to their needs. As in the United States, Swiss federalism is formally based on strict division of powers. Legislation at all levels of government is not tied to any co-determination requirement of any other level. The upper Ständerat is composed of two popularly elected members from each full canton of which there are twenty. The remaining six are half cantons represented by one member each. It is here, in the adoption of the American Senate principle that the Swiss constitution has followed the American model most closely. Also similar is the constitutional formula of legislative federalism which enumerates the powers for the federal and cantonal levels of government, leaving all unmentioned future powers as residual powers to the cantons. Centralization and Direct Democracy. There has also been a trend towards more centralization more recently. If it has been far less profound than in the United States, then this is so because all new powers assumed by the federal government require a formal constitutional change which in turn must be approved by a popular referendum on the basis of a national majority of voters, and a majority of voters in a majority of cantons. In the United States, by comparison, this assumption of federal powers has for the most part been accomplished without constitutional amendment, by judicial reinterpretations of the existing federal powers. In Switzerland, there is no judicial review by a Supreme Court. The constitutionality of all legislative acts is decided by the people in referendums alone, and the Swiss people appears far more reluctant to go along with secular trends as formulated by their federal governments. This centralizing trend in Swiss federalism has been accompanied by a feature more resembling administrative federalism: In most instances, after a new power has been assumed by the federal level through successful constitutional change, it is delegated back to the cantons for implementation and execution, leaving room for a wide range of differentiation. This leads to a final examination of Switzerland’s version of cooperative federalism. As in the American case, it developed incrementally and pragmatically from a more dual conception of federalism, and over the same questions of modern infrastructure, cost- and revenue-sharing, and social policy. Other than in the United States, it has neither brought forth a wild growth of federal grants programs nor the uncontrolled proliferation of intergovernmentalism. Federal powers are based on a limited number of broadly constructed constitutional provisions. On the basis of such framework legislation, the cantons implement policy without extensive supervision. A particularly peculiar feature again is that much of the cooperative tasks of policy coordination is accomplished through the cumulation of private and public office. The legislative chambers at both levels of government are filled with representatives of the country’s socioeconomic elites. As most of them are also and inevitably high-ranking officers in the militia system, they can and obviously will hold informal intergovernmental meetings during their military exercises. Moreover, the Swiss system also allows to serve at different levels of government simultaneously. Thus a considerable number of cantonal members of government are routinely elected to the Nationalrat at the federal level, for instance. One might say that Swiss federalism therefore constitutes a case of interlocking federalism through the back door. Summing up, Swiss federalism is both a variation of American federalism in some of its formally constituted features, and a unique blend of plebiscitarian democracy combined with elite accommodation. As its American counterpart from which its constitution was crafted, Switzerland is characterized by an exceptional degree of stability and continuity. As in the United States, the lack of clear political choice contributes to political disengagement among citizens, although the low voter turnout may also have to do with the relentless requirement to go to the polls in referendum after referendum. Swiss neutrality adds to a certain degree of nationalist smugness and free rider mentality. The management of Swiss politics is for the most part left to a small and highly integrated elite of economic, political and military leaders. Proportionality in public office and the federal balance of powers are jealously watched but the established path of political conduct is rarely challenged. Swiss federalism in this sense may be the victim of its own success.
Federalism in the British Dominions American federalism started with a bang, as a deliberate break with the political traditions of the British Empire. Political legitimacy was to result from a combination of popular election of each branch of government, and a system of checks and balances among them. Federalism added a vertical dimension of power separation meant to balance majority and minority interests Federalism in the British Dominions evolved more reluctantly and a century later. Most importantly, it did not break with the British parliamentary tradition. The battle cry for political legitimacy focused on ‘responsible government’: the executive branch was to be fully accountable to parliamentary majority rule. In Canada, federalism was meant to superimpose parliamentary majority rule in the provinces by a strong central government based itself on parliamentary majority rule. The majority of provinces only came into being as legal entities after Confederation in 1867. The purpose of federation was as much an attempt to achieve a political settlement between English Canada and Quebec, as it was to accomplish political incorporation of the vast western territories. By comparison, all the present states already existed as self-governing colonies when Australia became a federation in 1901. This federation was not occasioned by either domestic cultural conflict or territorial expansion. What the Australian colonies originally agreed to was a weak central government with few and limited powers in the common interest, leaving the self-governing powers of the colonies untouched in most matters. Retaining parliamentary rule at both levels of government, and spared the kind of cultural-regional conflicts prevalent in Canada, Australian federalism became overshadowed by party competition. Certainly, the most profound underlying rationale for federalization in Canada was cultural, and it still is. There are other serious regional issues and conflicts, over economic policy and representation, for instance, but they have been able to piggyback on Quebec as the driving force of decentralization and province-building. Other than in Switzerland, official bilingualism is not based on a territoriality principle. In particular, provinces and municipalities have to offer second language education services when the numbers warrant this. Within the last two decades, the Canadian polity had to live through three separatist referendums in Quebec, one major constitutional revision, and two failed attempts of reconciling Quebec with the outcome of this revision. In essence, one might say that the political cultures of English and French Canada are incompatible. English Canadians tend to put a greater emphasis on individual liberalism. Not unlike Americans, they tend to regard federalism as a structural device either promoting or inhibiting their individualist aspirations. Individual liberalism among French Canadians may be as strong as anywhere else but it is complemented, and by no means only among separatists, by a much stronger commitment to regional identity. Federalism would only be acceptable to them if it succeeded in the promotion of individual opportunity as well as collective identity. It is the accommodation of this ambivalence which has eluded Canadian cultural federalism thus far. A Model of Parliamentary Federalism. Canada is also the most indisputable case of parliamentary federalism. There is no horizontal separation of powers at either level of government. By contrast with the American States, which have bicameral legislatures (with one exception: Nebraska) and directly elected governors, Canadian provinces are governed by unicameral parliamentary majorities. The same is also true in principle for the federal level although there is a nominally-bicameral legislature with the House of Commons and the Senate. The Senate, however, is not popularly elected but government-appointed on the basis of near-equal regional representation. Moreover, Canadian senators are appointed for life with a mandatory retirement age of 75. Legally, in constitutional terms, the Canadian Senate possesses co-equal legislative powers. In practice, because it is clearly lacking political legitimacy, Canadian senators have seldom opposed bills approved by the House, wisely confining themselves to offering "sober second thought," and to the fine-tuning of the wording of bills as they pass through the Senate. Divided Powers Without a Senate? This oddity of incomplete bicameralism, clearly reminiscent of the British House of Lords, leaves the Canadian federation without any responsible form of regional representation (through either senate or council) at the federal level. Formally, the two levels of government operate entirely on the principle of divided powers. Informally, the gap has to be filled by intergovernmental relations, often in the form of highly politicised First Ministers Conferences. In contrast to the United States again, Canadian intergovernmentalism does not merely address pragmatically problems of joint governance within the given distribution of powers but more typically engaged in heated debates about the distribution of powers. Canada’s legislative division of powers could be called an oddity as well. All federal systems typically rely on a threefold division of powers: exclusive powers for the federal government, exclusive powers for the subnational units, and shared or concurrent powers. Typically, the list of shared powers is lengthy in recognition of the complexity and interdependence of modern political systems. In the Canadian constitution, there are two lengthy lists of exclusive powers for each level of government. The list of shared powers, on the other hand, is short. The only other case with a similarly short list of shared powers is Switzerland. But, as we already know, Switzerland is at least in part a case of administrative federalism where most powers are designated as federal yet commonly delegated back to the cantons for implementation and execution. This is not so in Canada where each level also administers the tasks for which it has exclusive legislative responsibility. Another oddity is the allocation of unspecified or residual powers at the federal rather than regional level (India appears to be the only other case). Most federal constitutions also stipulate residual powers without any qualification in need of interpretation. The Canadian formula, however, contains such a qualification: Parliament can make laws for the "peace, order and good government," and is only restricted in doing so with regard to "matters of a local or private nature." Inevitably, these provisions have added to confusion and conflict. It should not come as a surprise, therefore, that the style of policy-making in Canada has been rather competitive. There are not only two competing visions of federation, a federal and a regional one. Probably, there are at least four visions: a central Canadian vision of limited cooperation between Ottawa and the provinces at least traditionally shared by Ontario and the federal government; a Quebec vision of confederal disassociation; a vision of regional equality sustained by a strong central government in Atlantic Canada; and a vision of regional differentiation in the western provinces. These differences have contributed to the rise of a regionally fragmented party system. Many Canadians deplore that the three main parties in the national legislature now are a liberal party with overwhelming support from Ontario, a separatist party only contesting federal elections in Quebec, and a new conservative party with obvious western ideological overtones. In reality, one might also argue that this party configuration gives near-perfect representative expression to the fragmented state of the Canadian federation. There is also a good deal of pragmatic cooperation to be found in Canadian federalism. An indication is that Supreme Court rulings pertaining to the division of powers have not dominated political life in Canada, and that they have rarely been understood as one-sided victories. Typically, such decisions have served as a basis for further negotiations on a particular issue. It is fair to say that Canadians are generally not as litigious as their cousins south of the border. With the focus shifting from constitutional politics to social and economic policy under globalizing conditions more recently, the governments and societies of Canada (see chapter 12) might yet find a mutually agreeable formula of federal coordination and compromise, a union (see chapter 11) based on shared social values which may have been the linchpin of Canadian unity and identity all along.
At least according to one view, the Australians were pushed into federation by a British colonial administration tired of dealing with six colonies separately. In geopolitical terms, while most Canadians lived closely together in a small corner of a vast continental space at the time of federation, most Australians did not. While there was an apparent need of coordination and compromise in the Canadian case, such a need was at least far less obvious in Australia. There was a shared interest in a customs union, i.e. an internal free market sheltered by a common system of external tariffs, and in a common defence force. For these purposes only, the colonies agreed, there should be a common government jointly financed by no more than one quarter of the country’s overall revenue from customs and excise duties, the main source of colonial income at the time. Parliamentary Rule in a Territorial Federation. While studying the federal systems in Canada and the United States very closely, adopting a number of features from each, the founding colonies never wavered in their commitment to parliamentary rule as the main source of political legitimacy. Not without reason did they call their newly created joint polity the Commonwealth of Australia rather than the United States of Australia, and neither did they begin their constitutional document with the expression of their ‘desire to be federally united’ — as did the British North America Act of 1867. With a largely homogeneous founding population, Australia is a clear case of territorial federalism as well. Federalization was not driven by a need to accommodate interregional cultural differences (indeed few federations were as culturally homogeneous as Australia) but to make available the common advantages resulting from limited central governance. Legislative Power Division and Senate. For the institutional construction of their federal government, Australians indeed chose a mixture of Canadian and American federalism. Canadian is the combination of federalism (vertical power division) and British parliamentarism (horizontal power fusion). American is the adoption of a popularly elected upper house with equal state representation and co-equal powers based on the Senate principle. A constitutional commitment to both a legislative division of powers (each level remains responsible for most administrative tasks within its respective domain of legislative authority), and to the principle of division of powers (State governments do not participate formally in federal legislation), is shared with both the American and Canadian federal systems. Because of responsible cabinet governance at both levels, finally, intergovernmental relations more resemble the Canadian experience of politicised high level conferences than the pragmatic maze of American intergovernmentalism. If there is something uniquely Australian about Australian federalism — apart from the eclectic mix of institutional arrangements in particular — then it is unmitigated party competition as the main source of political conflict. Canada’s often conflictual policy style is carried by party competition as well, of course. Typically, however, these parties voice different visions about the nature of the federation among regions and between the two levels of government. In the context of Australia’s territorial system of federalism, the main conflict line runs between the major parties and their visions of federalism. Or, even more bluntly, while the competitive nature of Canadian federalism is focused on the question which kind of federal arrangement — if any — might preserve Canadian unity after all, federalism in whatever form seems to remain a contested concept in Australia. When the conservative parties (Liberal and Country) used their slim Senate majority to bring down a Labor government by refusing to pass the budget, for instance, this was widely perceived as a crisis of legitimate parliamentary majority rule brought about by party competition and not in any a problem of federalism. Also at stake was Labor’s determination to use the Commonwealth Government’s superior fiscal resources to engineer a more centralised federalism. Since then, and after Australians had come to grips with both the opportunity structures federalism offers to party competition, and its pitfalls, a certain consolidation seems to have taken place. In the end, Australians may abolish monarchy but not federalism.
The German Model of Federalism Mainly for historical reasons, German federalism evolved as a model in its own right, neither following the American plural nor the British parliamentary tradition. The most distinctive feature of federalism in Germany is the direct participation of regional governments in the federal process of legislation. This has also become the main characteristic of the European Union as an emerging federal system. The nineteenth century founding fathers of German federalism were the dynastic rulers of the German territories (see chapter 4). Because of their vested interests in the preservation of decentralized plurality, every major city in Germany still today has it own government-subsidized concert hall and opera house, for instance, some 95 altogether, and every Land still today develops its own school curriculum, making it somewhat difficult for a family with school-age children to move, say, from Munich to Hamburg. Territorial Federalism Reconstructed. If Germany, as it was reconstructed after 1945, constitutes a fairly clear case of territorial federalism nevertheless, then this is so mainly for two reasons: First, Bismarck’s federal state of 1871 was developed under the modernizing spell of Prussian hegemony, leaving little more than cultural self-indulgence to the other regions. Secondly, not much more than folklore and dialect remained of this cultural diversity after two world wars and twelve years of centralized dictatorship. The West German republic soon became very homogeneous, socially as well as economically. It was also cut off from most of the old Protestant Prussian heartland behind the iron curtain separating western and eastern Europe. The rationale for rebuilding West Germany as a federal state, while following an old tradition as well as unquestionable demands of the western Allied powers occupying the country, clearly was power separation as a structural tool of democratic reeducation. After reunification in 1990, some potentially conflictual diversity was reintroduced into German politics, but for the most part it remained tamed and contained by Germany’s peculiar system of interlocking and administrative federalism (see below). Party Governance and Council Principle. West Germany’s domestic founding fathers and Allied supervisors were united in the conviction that the process of democratization would only be successful if the new constitution, called the Basic Law, was crafted upon traditional elements of German political culture rather than importing an entirely alien concept, say, British parliamentarism or American style republican federalism. The result was a combination of parliamentary party governance taken from the brief experience with democracy in the Weimar Republic established at the end of First World War, and a bicameral federal system based on the council principle taken from the Bismarck state. Because of the way in which the Nazis had persecuted and destroyed political parties, the Basic Law of 1949 may be the only constitutional document explicitly recognizing the role political parties play in democratic governance. The linchpin of federalism in the Bismarck had been the Bundesrat (Federal Council), a dynastic upper chamber with co-equal legislative powers. In the West German Bundesrat, these dynastic rulers were replaced by democratically elected Länder governments. Likewise from the tradition of the Bismarck state stems Germany’s system of administrative federalism. From the very beginning, the Imperial Constitution had been more centralised than those of the other three federations at the time, the United States, Switzerland and Canada. Subsequently, under Prussian hegemonic pressure and Bismarck’s leadership, the territorial princes consented to an ever growing list of federal powers. They did so because of the compensations they received for this loss of legislative power. On the one hand, they received or retained nearly all powers of policy implementation, allowing them to establish impressively growing Land administrations which in turn sustained the respect and loyalty of their subjects. This separation of federal legislation and Land administration was restored in 1949, and it may at last in part explain why the addition of five new comparatively poor Länder after reunification in 1990 did not upset the federal system as at least some had feared. After all, these Länder had lived through a different history for nearly half a century. Their administrations had at least some leeway in implementing federal framework legislation according to regionally specific needs. On the other hand, of course, the dynastic leaders of the Bismarck era had gained a co-determining voice in all Imperial legislation. During the years of the Weimar Republic, the Länder right of co-determination at the federal level was reduced to those legislative acts particularly affecting their constitutionally protected interests, and that is how it was taken over into the postwar West German constitution. It is this system of interlocking powers in the federal legislative process which more than anything else distinguishes the German model from American- or British Dominion-style federalism. Still much like territorial princes, the Länder Prime Ministers - play a high profile role in federal politics. Again, this may explain the smoothness in the post-reunification transitional process by at least initially giving a feeling of political inclusion to the regional electorates. It lies in the nature of this construction of interlocking politics that, moreover on the basis of a strongly centralized national party system, the German Bundesrat has become much more a second chamber of national policy formation than one promoting regional issues and interests, and this is in fact one aspect of German federalism that may change as the country has become much more heterogeneous after reunification. The highly visible role of Länder Prime Ministers in federal politics may also explain the career patterns of German Federal Chancellors (this name for the head of government at the federal level also goes back to Bismarck whose title was Imperial Chancellor): Of the seven Chancellors since 1949, four had previously served as Land Prime Ministers. The combination of parliamentary federalism and interlocking powers also determines the nature of intergovernmental relations. The politicised nature of intergovernmental relations and First Ministers conferences typically for parliamentary federal systems, sometimes called "executive federalism" as in the Canadian case in particular (see chapter 5), is not reproduced in German federalism because of the formalised interlocking relationship between both levels of government. Overwhelmingly, the coordination of powers in Germany’s legislative process takes place in the Vermittlungsausschuss (Mediation Committee) between the two legislative chambers, Bundestag and Bundesrat. This does not mean, of course, that there are no informal contacts between the two levels of government. German Chancellors, for instance, have increasingly invited Länder Prime Ministers for purposes of dialogue and information exchange (in some instance, though, they have only invited those Prime Ministers belonging to their own party). The new Chancellor Schroeder has also begun informal rounds of dialogue with the governments of the former East German Länder since taking office in 1998. Similar to all other federations, the Länder governments also meet routinely for purposes of horizontal self-coordination, often in preparation for a meeting with the Chancellor. And in some instances, such as education policy, regular coordinative meetings have been institutionalised among the Land cabinet ministers. Cooperative Interlocking as a Decision Trap. For all practical purposes, finally, cooperation and interlocking politics are synonymous concepts in German federalism. There are no fundamentally conflicting visions about German federalism between the Länder and federal governments. The high level of centralised regulation with regard to taxation, social and environmental standards etc. also makes interregional competition less pronounced than in most other federations. A potential conflict between the two levels of government has been the federal government’s exclusive power of committing to binding regulations with potential impact on Länder interests in the European Union. It has been resolved by a constitutional change extending the Länder right of legislative co-determination to this part of the traditional federal prerogative of foreign policy making as well. If there has been criticism of Germany’s interlocking system of federalism over the years, then it has been that it requires too much cooperation, frequently resulting in deadlock and policy immobilism. In particular, this criticism of an interlocking decision trap has focused on the Bundesrat. Since it is dominated by party politics rather than regional issues and interests, it has at times been used for the obstruction of federal government policies when there was a different party majority than in the Bundestag . However, this has not generally been perceived as a crisis of responsible parliamentary governance by German voters who quite generally like to vote for different party or coalition governments at the two levels of government, knowing full well that this will result in different majorities in the two legislative chambers at the federal level as well. Other than in Australia, it seems that federalism has fully established itself as a legitimate and complementary dynamic of German policy making.
The European Union as an Emerging Federal System Among the growing number of international organizations and systems, the European Union stands out for two reasons: First of all, it is the most advanced transnational system of political integration, comparable in size and economic power only to the United States of America. It may indeed have model character for transnational governance in a globalizing world. Secondly, while the European Union must be considered as an altogether new form of transnationalized multilevel governance, it can be regarded as an emerging federal system nevertheless. It is included in this section because it has followed the German model in several important ways. Interlocking Powers in the European Council. At first glance, the institutional set-up of the European Union very much looks like that of a federal state. There is a directly elected European Parliament, a European Commission in charge of executive governance, and the Council of Ministers, a kind of superior legislative chamber with ultimate decision making power. It is the construction of this Council of Ministers which resembles German federalism most closely. First of all, its composition is based on the council principle. The members are instructed representatives of the European member-state governments. Their votes are similarly weighted as in the German Bundesrat. Secondly, given the superior if not exclusive law making powers of the Council (see below), the European system of governance is very much one characterized by political interlocking rather than a separation of powers. This is almost where the comparison ends. Obviously, since the European Union is currently composed of fifteen member states with different histories, large variations in their social, legal and economic systems, and eleven different language, it can only be regarded as a case of cultural federalism. Its formation almost literally repeats at the European level the history of federalization in nineteenth century nation-states (see chapter 4). Its rationale has been based on a historical compromise between a shared desire to build a large integrated market, and an equally strong commitment to the retention of cultural autonomy and self-governance. As in the case of nation-state federations the question is to what extent the homogenizing forces of the market will eventually transform the federal system from a predominantly cultural one into an increasingly territorial one. An Eclectic Mix of Plural Powers. The institutional framework of the European Union departs farthest from the German, or, for that matter, any other federal model. The European Parliament has only limited powers and certainly does not follow the tradition of responsible parliamentary governance. The executive Commission is appointed by the national governments and only partly accountable to the Parliament. It is responsible for most European policy initiatives, and it watches over their implementation by the member states once the Council has approved them. That Council , on the other hand, operates more like an institutionalised form of intergovernmentalism than a second legislative chamber. As in Canadian First Ministers Conferences, for instance, changes to the Union Treaties require unanimity. Only when setting up specific policies to be carried within the framework of the existing Treaties, the Council has increasingly adopted qualified majority voting. With this eclectic mix of institutional arrangements, European governance somehow falls into the category of plural power dispersal. As master of the Treaties, the Council remains autonomous from parliamentary control and accountability. The Commission acts as the main executive, and as a semi-autonomous political entrepreneur for the entire process of integration, coordinating communication and interaction among a large number of public and private actors, member state governments, subnational regional and local governments, interest organizations and social movements. The transnational lobby in Brussels very much begins to look like its counterpart in Washington. So does the large and growing number of direct financial support programs the Commission administers. Legislative Cooperation, Competitive Administration. A categorical classification of the European Union’s functional division of powers and policy making style is even more problematic. The Treaties have the character of binding European law, and a very efficient European Court of Justice watches over the member states’ adherence to them. Insofar as these member states continue to be governed predominantly by national law, one can discern a legislative division of powers. At the same time, however, the directives and regulations which are put into place by the Commission on the basis of this Treaty Law, have to be implemented and executed by the member states, and this would point more into the direction of an administrative system of federalism. Evidently, all this requires a high degree of cooperation. Within the stipulations of the Treaties, the member states have agreed on a common vision of integration. This process of integration has remained a partial one, though, focusing on a common market in particular. A good deal of competition remains with regard to both unregulated policy areas such as social policy, for instance, and the general direction of the process of further integration. In sum again, the European Union is both more than just another international organization, and less than a fully developed federal system. It is more than an international organization with specific and limited objectives because the achieved level of integration is unprecedented in quantitative as well as qualitative terms. It is less than a federation because the process is still ongoing and incomplete. Probably it always will be.
Catholic Federalism in the Americas Thus far, our comparative survey has focused on federalism in the world of Western-type industrialized nation-states. What makes this world comparable is not only a similar level of socioeconomic development but also a common heritage of decentralized administration. Britain, while a unitary state, has always relied on decentralized local government. It was the genius of the American constitutional framers to transform this tradition into a pluralised model of constitutionally guaranteed self-governance. Of particular importance for the anti-centralist predisposition in the United States as well as in the British Dominions was the escape from religious centralism after the Reformation, and this was also one of the contributing factors in the historical development of the German model (see chapter 4). Most post-colonial federalisms elsewhere were crafted from this common heritage as well as in recognition of the multicultural character of colonial societies. For reasons that have been too often overlooked, the story of federalization in the Hispanic part of the Americas is different. Of the four existing federations, Argentina, Brazil, Mexico and Venezuela, two will be examined briefly in order to understand these differences. The Mexican and Brazilian Cases Mexico and Brazil have been federations since 1857 and 1891 respectively. Formally, they appear to replicate the western industrialized models. Mexico is divided into 31 states and the federal district of Mexico City. Brazil is composed of 26 states and the federal capital district of Brasilia. Both federations have a popularly elected Senate with equal State representation. One might well think that these countries simply copied the American model, and, at least in formally institutional terms, they obviously did. Their rationale for federalization as well as their operational mode, however, reveal an altogether different picture. The Heritage of Colonial Administration. Both countries emerged from colonial rule by a Catholic monarchy in which the Reformation never took root, Spain in the case of Mexico, and Portugal in the case of Brazil. The Catholic tradition is one of centralized authoritarianism. The rationale for federalization in these Catholic colonies was not the accommodation of multiculturalism - although both are pluricultural nations. The federal constitutions of these countries evolved from their experience with territorially decentralized colonial administrations. Not unlike the Roman Empire from which the Papacy had once taken its cues, these colonial territories were governed by a prefectural system of administration which was as centralised in principle as it had to rely on loyal regional execution in practice. Both the coordination of powers and the mechanisms of regional representation were essentially clientelist. State governors were either appointed by the centre, or, if there were elections, these were likewise dominated by the ruling party, strongman, military junta, or a closely interconnected clique of central and local elites. Within these clientelist networks, the policy style was naturally cooperative unless one faction attempted to unseat another. Bicameralism neither served regional interests nor constituted a vertical separation of powers. The role of Senators amounted to little more than adding a voice of regional compliance to the central process of governance. Students of comparative federalism may ask why one would want to include these travesties of a federal order in this survey at all. We suggest a number of reasons. First, especially when looking at the past record, countries like Mexico or Brazil can serve as healthy reminders that the adoption of even the most perfected federal constitution does not necessarily account for much. In Switzerland, we have seen governance dominated by a fraternity of political, economic and military leaders. And in the cases of both the United States of America and Germany, at least some scholars have suggested that the degree of centralization in these federations amounts to a travesty of the original spirit of federalism as well. But more importantly and interestingly, with gradual modernization and democratization, change has come to the federal systems of Mexico and Brazil as well. In order to understand this change we need to know that there has been a distinct history and point of departure. Change has come from above and below. From above, it has been driven by the growing realization that bureaucratic centralism is inefficient. In Brazil, for instance, the centralist governing style during the years of forced industrialization at times resembled that of the Soviet Union. A recent constitutional reform has now provided the states with more real powers of self-governance. Similar processes of power redistribution have also been initiated in Mexico. In both instances, the problem is that the new decentralised powers are only insufficiently equipped with fiscal capacity. As long as states and municipalities continue to lack their own funding mechanisms, they find themselves responsible to carry out tasks for which they have no money. From a comparative perspective, however, it should at least be noted that similar processes of task down loading without equivalent fiscal transfers have also occurred in mature federal systems like the United States or Canada in recent times and there certainly exist other federations, notably Australia, characterised by fiscal centralisation (see chapter 11). From below, pressure for reforms has been mounting as well. A classical explanation would point to the decentralised rise of new if fragile middle classes. As central administrators had to rely on regional cooperation in their drive towards modernization, they transferred to these regions administrative and political know-how that had to be shared with more than just the handful of ruling families. Unwittingly, the seeds for the eventual assertion of self-governing rights were sown. In Mexico, for instance, the centrally ruling party coalition appears to be gradually losing control over the periphery. Seven of the 31 states, and some 400 municipalities with almost half of the state capitals among them, are now governed by opposition parties. For once, party competition seems to promote rather than obstruct federalism. The picture in Brazil is similar. As the rich southern states have pressed for a free trade agreement with Argentina, Paraguay and Uruguay, the mostly impoverished northern states are perhaps for the first time trying to make use of the existing federalist institutions in a combined effort of demanding increased fiscal transfers.
3. Contextual Variables: what other features affect the working of federations? The purpose of this chapter has been to identify the main institutional and organizational categories distinguishing modern federal systems, and to use these categories for the further distinction of some basic historical and geographic models. How these categories are combined and used in practice already tells us a lot about the stability or instability of these federal systems. A competitive style of policy making based on cultural difference and combined with a lack of regional participation in the federal legislative process as in Canada, for instance, may inevitably be a weak formula for stability. By comparison, the combination of interlocking legislative powers with a functionally divided system of administrative federalism in a culturally homogeneous such as Germany may produce too much of the opposite, a formula for creeping unitarism undermining the federal balance. But there are of course other factors that determine the stability or instability, success or failure, of federal systems. We call them additional contextual variables, and a few of them will be discussed briefly in this section as the size of a federation, the number of constituent units, and the degree of demographic and socioeconomic asymmetry. Geographic Size and Population Federations vary enormously is size, and there seems to be no general pattern which would make stability predictable . There are or have been large stable federations (United States, Australia), large unstable federations (Soviet Union, Pakistan), small stable federations (Switzerland, Austria), and small unstable federations (Czechoslovakia, Yugoslavia). An argument can be made, however, that large countries are more likely to adopt a federal form of governance. Most Large Countries are Federations Of the world’s eight largest states, Russia, Canada, China, the United States of America, Brazil, India, Australia and Argentina, seven are formally constituted as federations. Common sense alone would lead one to believe that countries of this magnitude cannot be governed, at least not democratically, without some form of federalism. Conversely, however, one might argue that for the very same reasons, size and diversity, federalism is not enough. Federalism is based on a balance of powers between two levels of government. Across vast distances and differences of continental dimensions, even the most perfect setup of a constitutional balance of powers would be upset by centrifugal forces. But what are the other means holding these federal systems together? In the case of the Hispanic federations in the Americas, we already know that the Catholic tradition of administrative centralism and clientelism provided the glue. A similar argument can be made for India. While closely following the Canadian model, the cohesion of Indian federalism has in no small part depended on corrupted and clientelist central party governance. In the old Soviet Union, formal federalism was superimposed by Marxist-Leninist party centralism. When communism collapsed, so did the Soviet Union. Whether the Russian successor federation will be able to break away from authoritarian centralism without a permanent loss of stability remains to be seen. Political Stability Requires more than Federalism It may come as a surprise that similar arguments can be — and must be — made with regard to two of the most indisputably democratic large federations, the United States of America and Canada. In the case of the United States, much of its political stability may be owed, just as the constitutional framers envisioned, to the plural character of the constitutional set-up, breaking the pattern of competing majority rule at both levels of government typical for federalism in the British Dominions. The establishment of a powerful and popularly elected national Presidency in particular has proven to be a unifying factor. In addition, however, the stability of the American polity rests on its exceptionally conformist ideological mix of liberal individualism, social parochialism and international superpower status sustained in no small part by corporate media power. Maybe it is because most if not all of these additional variables are weaker or missing in Canada, that its stability has been periodically threatened. However, as we shall see below, problems arising from its number of constituent units and socioeconomic asymmetry have probably been more profound. The number of constituent units ranges from two (former Czechoslovakia) to fifty (United States). Some of the largest federations are subdivided into only a few units (six states in Australia), some of the smallest federations contain a large number of units (26 cantons in Switzerland). Obviously again, there is no general correlation between size and number of units. But there may be one between number of units and stability. A Large Number of Units Increases Stability The main argument has been that a large number of units contributes to the overall stability of a federal system because it facilitates changing interest coalitions. The obvious example is the United States of America. At least since the Civil War, there neither have been deeply entrenched regional cleavages, nor have the fifty states ever challenged the federal government collectively. From the perspective of the federal government, it may be easier to play a game of divide-and-rule. The recent trend of devolution in American federalism does not necessarily contradict this argument as long as this devolution remains driven by Congressional calculations of power and expediency. By the same token, the argument has made that a small number of unit governments tends to strengthen their influence upon the overall system. They can gang up on the federal government more easily. A case may be Canada where the ten provinces have succeeded - against the original constitutional intention - in wrestling considerable amounts of power from the federal government. Another case may be the European Union. The original Community of Six had retained a rule of unanimity in most policy areas affecting vital member state interests. Subsequent rounds of enlargement forced the increased use of qualified majority decisions and consequently a more serious decline of nation-state sovereignty. Bicommunal Federalism as a Particular Problem A final and related argument pertains to so-called bicommunal federations in which the number of the constituent interest parties is essentially reduced to two. The number game cannot be used for cross-cutting coalitions and compromises at all. Czechoslovakia has been the most extreme case of this kind because there were indeed only two constituent units, the Czech and Slovak Socialist Republics, inhabited by two different cultural groups, Bohemian/Moravian and Slovak, who were moreover divided by different stages in their economic development. Soon after the end of forceful Communist rule over both parts, the federation broke up even though the bicommunal differences were by no means as extreme as , say, those in Northern Ireland or Cyprus. Belgium is a country similarly divided between the Dutch speaking Flemish and the French speaking Walloons. In this case, however, the development led from a unitary state on the brink of a break-up, to the creation of a bicommunal federation recognizing both linguistic regions and cultural communities. And finally, there is Canada again, not a bicommunal federation in terms of numbers, but deeply divided between the Anglophone Community mainly living in nine provinces, and the Francophone community predominantly living in Quebec. The fact that there are more than two constituent member units has not helped to disperse the bicommunal conflict, though. On the contrary, Quebec’s main grievance in the Canadian federation is that is permanently outnumbered. This, however, is as much a problem of asymmetry as of bicommunalism. Demographic and Socioeconomic Asymmetry. In most cases, the size and population of the constituent units in federal systems are very uneven. The size of the smallest Canadian province, Prince Edward Island, amounts to less than half a per cent of the largest province, Quebec. The population in the smallest German Land, Bremen, barely reaches four per cent of the most populous Land, Nordrhein–Westfalen. If such unevenness is the norm rather than the exception, it can hardly serve as a telling indicator of stability or instability. What does constitute a problem is the concentration of nearly or more than half of the population in one part or even one constituent unit of the federation. The overpowering role of Russia in the Soviet Union was the most extreme case of this kind, dominating all aspects of Communist party rule and deeply resented by all others. But asymmetrical demographic domination is by no means a problem unknown to democratic federations. The western provinces of Canada, for instance, routinely and rightly complain that federal elections are already decided before the polling stations in the westernmost province of British Columbia have even closed. This has to do with the time zone differences in a vast country, but also with the fact that more than sixty per cent of Canadians live in the two central Canadian provinces of Ontario and Quebec. The metropolitan areas of Toronto and Montreal alone have more inhabitants than the three prairie provinces of Manitoba, Saskatchewan and Alberta taken together. Quebec, of course, feels outnumbered both by demographic (some 25 per cent of the Canadian population) and cultural-provincial asymmetries (nine English against one French province). Equally significant are asymmetries of regional economic resources . Canada is the most conspicuous case again. Most of its industries are located in central Canada, the economies of the western and eastern provinces mainly rely on the extraction and the export of natural resources. Designing a national industrial or energy policy under such circumstances is virtually impossible. Economic disparities are affecting the stability of many federations, including such emerging federal systems as Spain or the European Union. In Spain, one of the seventeen so-called Autonomous Communities, Catalonia, produces nearly a quarter of the national GDP. Admired for its leadership role in the process of democratic federalization after the end of general Franco’s long-lasting dictatorship, Catalonia’s role in Spanish politics is now increasingly resented for its domineering and micro-nationalist overtones. The dominant economic position of Germany in the European Union is also watched jealously by other countries. But the real problem of asymmetry in the European Union is the widening disparity gap between north and south. It will be compounded by an east-west dimension when some or most of the central and eastern European states have gained access and membership. Without a serious commitment of fiscal redistribution and equalization, a standard feature in most federal systems the European project of market integration might yet fail. This last section has pointed to federal systems like Canada, Spain or the European Union as particularly problematic cases of federal stability and balance. Yet the argument can also be turned around and take on a more positive note. In an increasingly globalized and interdependent world, different size, uneven numbers and glaring asymmetries more than ever will be the contextual norm for the conduct of politics and the design of policy. If federalism can keep these polities together in cooperation or at least peaceful competition, they may indeed have model character for the next century.
Although federalism is conceptually based on a limited number of first principles there is an almost infinite variety of federal formations in practice. In this chapter, we have suggested three different yet interrelated ways of bringing order to this variety. First, we have introduced six categories distinguishing the institutional and operational or organizational setup of federal systems: The rationale for federalization is either cultural or territorial; the dispersal of power is either plural or parliamentary; the coordination of powers is either separate or interlocking; regional representation is either based on the senate or council principle; the functional division of powers is either legislative or administrative; and the style of policy making is either cooperative or competitive. Categories of this kind are analytical tools. In reality, federal systems will show these characteristics to varying degrees, more-or-less rather than either-or. Secondly, we have used these categories in order to distinguish four basic models: the American model of territorial, plural and cooperative federalism based on legislative power division and the senate principle for regional representation; a British Dominion model distinguished in its adherence to the parliamentary tradition and a more competitive style of policy making; and a German model of administrative federalism constructed on the principle of power interlocking. For the fourth and last model, Hispanic federalism based on the Catholic tradition in the Americas, some additional categories had to be introduced such as a prefectural system of regional governance, and a clientelist style of power coordination and representation. Thirdly, we have added three contextual variables to the discussion, arguing that the size of a federal system, the number of its constituent members, and the degree of asymmetry in its demographic and socioeconomic composition are important indicators for general stability or instability, success or failure. This discussion allowed to look beyond the small number of federal systems most directly and successfully constructed upon the four basic models. It also raised the question whether asymmetrical federal systems such as Canada, the European Union or Spain are deviant problem cases or whether they have indeed model character for the future.
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