BACKGROUND

DEFINITIONS
The division between federal and decentralized states has become blurred:
– Germany, Switzerland, Austria, Belgium (1993) = federal, but they differ a lot from
Canada and USA
– UK (devolved) & Spain decentralized (Spain federal?)
FEDERALISM: A federal state is one in which sovereignty is constitutionally split between at
least two territorial levels so that independent governmental units at each level have final
authority in at least one policy realm. It is important to distinguish between “federalism in
structure” and “federalism in practice.”
HENCE, In spite huge variety of federal countries, there is a consensus in that:
-Federation implies an irrevocable entrenchment of some local or regional (state)
government in the national (federal) making process with significant powers that are
protected by the Constitution. There are guarantees that ensure that the basic federal
division of power will be preserved.
-In federal countries, shared sovereignty between a central authority and the units of
the federation
-Thus, separation of powers both in territorial and functional dimensions: units enjoy
rights and powers guaranteed by the federal Constitution

-Federalism as vertical separation of powers horizontal separation of powers among classic bodies (aka, legisl

TYPES OF COUNTRIES
REGIONAL AUTHORITY INDEX: The Regional Authority Index (RAI) is a measure of the
authority of regional governments in 81 democracies or quasi-democracies on an annual
basis over the period 1950-2010.
-Tendency to progressive decentralization.
1. FEDERALISM:
-Problems operationalizing the concept: What it is to be a federal state?
!!!Whether a state is federal or unitary is ultimately a constitutional issue
!!!Whether a state is decentralized or not is about where policy is actually made
-EXAMPLES OF TRUE FEDERAL COUNTRIES: USA, Germany, Argentina, Canada
-COUNTRIES WITH SOME TRACES OF FEDERALISM: Spain, China, Russia, India…
-FEDERAL COUNTRIES:
1. FEDERAL DE JURE (Structure)
+
2. FEDERAL DE FACTO (In practice)
1.1. FEDERALISM DE JURE (In Structure)
- Geopolitical division requires that the country be divided into mutually
exclusive regional governments that are recognized in the constitution and that
cannot be unilaterally abolished by the national government.
- Independence requires that the regional and national governments must
have independent bases of authority. This is typically ensured by having them
elected independently of one another.
- Direct Governance requires that authority be shared between the regional
governments and the national government such that each citizen is governed by at
least two authorities. Each level of government must have the authority to act
independently of the other in at least one policy realm, and this authority must be
protected by the constitution.
EXAMPLES: Regions (Belgium), States (Australia, USA…), Lander (Germany,
Austria), Cantons (Switzerland)
-2000: Only 10% of the countries.20% of the population.
-Usually huge countries or with a heterogeneous tradition.
 -Federalism can be both congruent or incongruent and symmetric or
asymmetric
-Congruent Federalism: Congruent federalism exists when the territorial units
of a federal state share a similar demographic (ethnic, cultural, linguistic, religious,
and so on) makeup. EXAMPLES: USA or Brazil.
-Incongruent federalism exists when the demographic makeup of the
territorial units differs among the units and the country as a whole. One of the
purported advantages of incongruent federalism is that it can transform highly diverse
and heterogeneous countries that have geographically concentrated social groups
into a federation of relatively homogeneous territorial units. EXAMPLES: Switzerland
or Belgium.
-Symmetric federalism exists when the territorial units of a federal state
possess equal powers relative to the central government. EXAMPLES: USA.
-Asymmetric federalism exists when some territorial units of a federal state
enjoy more extensive powers than others relative to the central government. On the
whole, asymmetries in the division of power are designed to satisfy the different
needs and demands that arise from ethnic, linguistic, demographic, or cultural
differences between the separate sub-national units.EXAMPLES: Canada, Russia,
Belgium…
HOW TO EXPLAIN THAT COUNTRIES THAT ARE PROGRESSIVELY
MORE DECENTRALIZED?
1. Bottom-up demand: – Reaction against perceived failures of the central
state – E.g. Post-communist Europe, Post-II WW Germany
2. Aspirations of nationalist movements: – E.g. Spain, Belgium, United
Kingdom, Canada, Indonesia, Nigeria, Russia
3. Post-war peace-building process: – E.g. Uganda, South Africa, Cambodia,
Iraq, Bosnia
4. Role of international development agencies: – Part of the neo-liberal
‘Washington consensus’ 12/4/2019 – E.g. World Bank intervention Comparative P
- Why Germany became federal in 1948?
-Influence of the allies.
EXAMPLE: The case of Spain and the evolution of “Estado Autonómico”
Spain is heavily decentralized politically speaking, but not federal, because of the
definition.
FEDERALISM DE FACTO: DECENTRALIZATION.
-The degree to which actual policy making power lies with the national or regional
governments in both federal and unitary states determines the extent to which
political scientists view these states as centralized or decentralized.
-Determining the extent to which a state is centralized or decentralized can be quite
difficult.
-Significant amounts of policy-making power can be devolved to regional
governments in unitary countries. (Navarra, Basque Country, Catalonia…)
-Oftentimes, the constitution of a federal country will delineate the specific
policy realms in which the central or regional governments can act. Although this is
somewhat informative, it is important to remember that having the authority to act in a
policy realm can be very different from having the practical ability to act in that area.
regional governments in a federal state may have a much weaker role in the
policymaking process than a reading of the state’s constitution might suggest,
because they do not have the financial wherewithal to implement their policy choices.
-CONCLUSION: The bottom line is that looking at a constitution, whether in a
federal or unitary country, can be misleading if one wants to know the extent to which
that country is centralized or decentralized in practice.
-In recognition of these difficulties, political scientists frequently use the percentage of
all tax revenue that is collected by the central government as a measure of state
centralization. the scope of policy making activities at any one level of government
will ultimately depend on the share of tax revenues that it collects. The higher the
share of all tax revenues collected central government, the more centralized the
state.
 (the average degree of revenue centralization is lower in federal states (74.6 percent)
than in unitary ones (87.95 percent). Federalism and decentralization tend to go
altogether) (Nevertheless For example, some unitary states (China, Denmark,
Finland, India, Japan, Sweden are more decentralized than the average federal
state. Indeed, China, where the central government collects only 48.6 percent of the
country’s tax revenue, is the most decentralized state in the whole sample and that
happens also vice-versa, see the case of Belgium or South Africa)
FEDERALISM SUMMARY:
TOP RIGHT QUADRANT: federal both in structure and in practice.
BOTTOM LEFT QUADRANT: Unitary both in structure and in practice.
TOP LEFT QUADRANT: are unitary in structure but federal in practice.
BOTTOM RIGHT QUADRANT: are federal in structure but unitary in practice.

(EXTRA) DEVOLUTION VS FEDERALISM:

(Italy, Spain, India…) On the whole, the criterion that most of these unitary countries
failed to meet was that of geopolitical division. Recall that this criterion requires that a
country be divided into mutually exclusive regional governments that are
constitutionally recognized and that cannot be unilaterally abolished by the national
government. Many of the aforementioned countries, like India, Spain, and the United
Kingdom, have transferred a considerable amount of power from the central
government to regional governments. In all of these countries, however, the central
government retains the right to unilaterally recall or reshape the powers given to the
regional governments. Ultimately, political power resides in the central government of
these countries; regional governments do not have a constitutional right to any of
their powers.

1.3 WHY FEDERALISM?

-COMING TOGETHER FEDERALISM.
Coming-together federalism results from a bottom-up bargaining process in which
previously sovereign polities come together and voluntarily agree to give up part of
their sovereignty in order to pool their resources in order to improve their collective
security and achieve other, typically economic, goals, such as a common currency
and increased trade. ex: USA.
-HOLDING TOGETHER FEDERALISM.
In contrast, holding-together federalism is the result of a top-down process in which
the central government of a polity chooses to decentralize its power to subnational
governments. This process typically occurs in multiethnic states in which the central
government fears that the continued existence of the state is threatened by one or
more territorially based “ethnic” groups that wish to secede. These federations are
incongruent because their whole reason for existing is to decentralize power to
territorially based ethnic groups; they tend to be asymmetric because they are trying
to satisfy the different needs and preferences of the various ethnic groups in the
country. ex: Belgium.

-PROS:
-Decentralized forms of government are best for satisfying popular
preferences in democratic countries in which individuals hold heterogeneous
preferences
-Another purported advantage of federalism is that it brings the
“government” closer to the people.
-Subnational governments in federal systems have a strong incentive
to perform well in office if citizens and investors have the ability to move from one
region to another. This competition is also at the heart of arguments suggesting that
federalism enhances market economies and produces higher economic growth.
-Ability to encourage policy experimentation and innovation. For
example, subnational governments in federal systems have the opportunity to
experiment with, and evaluate, different policies for tackling social, economic, and
political problems.
-Federalism as a bulwark against tyranny. For instance, many of the
Founding Fathers in the United States believed that the interlocking arrangements of
federalism reduced the risk of tyranny because the subnational governments could,
and would, check each other.
-CONS.
-Critics claim that the different layers of federalism can lead to the
unnecessary duplication of government and the inefficient overlapping of potentially
contradictory policies.
-Critics also argue that federalism exacerbates collective action
problems in the formulation and implementation of economic and other politics,
particularly in developing countries.
 -Because provincial politicians ultimately care about their own political
success, they face only weak incentives to make economic and other decisions in the
interests of the federal system as a whole.
-Regional governments also have incentives to spend beyond their
means if there is an expectation that the central government will come to their rescue
and bail them out.
-Although supporters of federalism regularly point to the benefits that
accrue from having competition between different subnational governments, critics
point to the possible deleterious consequences that such competition can have. For
example, in attempting to attract investment and retain their citizens, competition
between subnational governments may lead to “downward harmonization” or a “race
to the bottom” in which levels of regulation, welfare, taxes, and trade barriers are
continuously lowered.
-Competition, particularly in asymmetric federations in which some
regions enjoy more power and discretion than others, may also lead to the
amplification of preexisting inequalities in population, wealth, and political power.
-Far from enhancing government accountability, as its supporters
claim, critics argue that federalism is just as likely to undermine it. By adding layers of
government and expanding areas of shared responsibility, federalism facilitates
blame-shifting and credit claiming.