Federalism

12
Federalism
International IDEA
Constitution-Building Primer
Federalism
International IDEA Constitution-Building Primer 12
Elliot Bulmer
© 2017 International Institute for Democracy and Electoral Assistance (International IDEA)
Second edition
First published in 2015 by International IDEA
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Contents
1. Introduction ............................................................................................................. 3
Advantages and risks ................................................................................................ 3
2. What is the issue?................................................................................................... 4
3. Advantages and disadvantages of federalism..................................................... 6
The rationale for federalism...................................................................................... 6

Coming together and holding together..................................................................... 7
Other potential advantages of federalism .................................................................. 9
Potential disadvantages of federalism...................................................................... 10
4. Distribution of powers .......................................................................................... 13
Distribution of legislative powers ........................................................................... 13

Distribution of executive powers ............................................................................ 15
Which powers should be exercised at which level? .................................................. 16
Socio-economic effects of the distribution of powers .............................................. 18
Development and availability ................................................................................. 19
5. Asymmetrical federalism...................................................................................... 21
Symmetry and asymmetry ...................................................................................... 21

Government of territories and dependencies .......................................................... 22
6. The boundaries of constituent units................................................................... 24

How much discretion do constitution-builders have? ............................................. 24
Should boundaries reflect cultural communities?.................................................... 25
Should a constitution specify boundaries? .............................................................. 26
7. Institutions of government within constituent units......................................... 27
Subnational constitutions and institutional structures ............................................ 27
8. Fiscal federalism ................................................................................................... 30
Tax collection and revenue sharing......................................................................... 30

Institutionalizing flexibility: finance commissions .................................................. 32
9. Federalism and the constitution as a whole ...................................................... 33
Constitutional supremacy and constitutional amendment rules.............................. 33

Participation of subnational units in national legislation and policymaking............ 35
Executive and judicial institutions .......................................................................... 36
Scrutiny, oversight and fourth-branch institutions ................................................. 37
Emergency intervention by the federal government................................................ 37
10. Possible alternatives to federalism................................................................... 39
Other forms of macro-decentralization (quasi-federalism) ...................................... 39

Stronger micro-decentralization (local government) ............................................... 43
Non-territorial (cultural) autonomy, proportional representation and veto powers. 44
Secession ................................................................................................................ 46
11. Decision-making questions................................................................................ 48
References ................................................................................................................. 50
Annex.......................................................................................................................... 52
About the author.................................................................................................... 52

About International IDEA ..................................................................................... 52
About this series ..................................................................................................... 53
1. Introduction
1. Introduction
Federalism is a constitutional mechanism for dividing power between different

levels of government so that federated units can enjoy substantial, constitutionally
guaranteed autonomy over certain policy areas while sharing power in accordance
with agreed rules over other areas. Thus, federalism combines partial self-
government with partial shared government (Elazar 1987).
Federal systems are usually associated with culturally diverse or territorially
large countries. Notable examples of federal countries (or countries with federal-
like characteristics, sometimes referred to as ‘quasi-federations’) include
Argentina, Belgium, Brazil, Canada, Germany, India, Malaysia, Nigeria, Pakistan,
Spain, South Africa and the United States.
Advantages and risks
Federalism is a means of ensuring peace, stability and mutual accommodation in

countries that have territorially concentrated differences of identity, ethnicity,
religion or language. Federalism, especially in large or diverse countries, can also
improve service delivery and democratic resilience, ensure decisions are made at
the most appropriate level, protect against the over-concentration of power and
resources, and create more opportunities for democratic participation.
However, while federalism has helped some countries settle conflicts or
improve governance, it can also exacerbate existing differences, sometimes leading
to deeper conflicts or state failure. Federalism is also a complicated, often
legalistic, form of government, which can be expensive and can hinder the
coherent development and application of policies.
International IDEA 3

Federalism
2. What is the issue?
Federalism is a system of government that establishes a constitutionally specified

division of powers between different levels of government. There are usually two
main levels: (a) a national, central or federal level; and (b) a state, provincial or
regional level. In some cases, however, a federal system may prescribe a three-fold
distribution of power by recognizing the constitutional powers of local
government (e.g. South Africa) or by creating complex forms of overlapping
territorial and linguistic federalism (e.g. Belgium).
Federalism thereby allows distinct communities, defined by their territorial
boundaries, to exercise guaranteed autonomy over certain matters of particular
importance to them while being part of a larger federal union through which
shared powers and responsibilities are exercised over matters of common concern.
To achieve this, the components of a federal system include, in addition to
legislative and executive (and sometimes judicial) institutions at each level of
government, a relatively rigid constitution that sets out the distribution of powers
among the various levels of government and a supreme judicial body that is
responsible for adjudicating disputes between them.
There are two main contexts in which federalism may be considered.
Identity federalism occurs when two or more culturally, linguistically, religiously
or otherwise distinct national communities have enough commonality of interest
or identity to make them want to live together in one polity, but enough
distinctiveness of interest or identity to make them demand substantial autonomy
within that polity (e.g. Canada, Switzerland).
Efficiency federalism occurs when a culturally homogeneous but geographically
large nation wishes to improve democratic representation and accountability by
decentralizing power and giving greater control over resources and policies to
4 International IDEA
2. What is the issue?
local people while maintaining national unity and the ability to act coherently in
matters of national policy (e.g. Germany, Argentina).
Federalism attempts to reconcile a desire for unity and communality on
certain issues with a desire for diversity and autonomy on others (see Figure
2.1). The question of whether federalism is suitable for a given country (and, if
so, what form federal institutions should take and to what extent the federal
principle should be applied) therefore depends chiefly on the balance between
common interests or identities, on the one hand, and divergent interests or
identities, on the other.
Figure 2.1. Federalism as unity in diversity

Federalism
3. Advantages and
disadvantages of federalism
The rationale for federalism
Federalism is offered as an institutional solution to the problems associated with

scale and diversity.
Scale
The origins of democracy can be traced to ancient and medieval city states where
citizens were able to participate directly in political life. Historically, it was
thought that democracy was possible only in small states, where decisions were
made through face-to-face discussions in the town square. The development of
representative institutions enabled democracy to be practised on the scale of the
nation state, but the problem of scale still remained.
Increasing the size of the political unit has a number of consequences. As the
geographical distance between the government and the people grows, the more
difficult it becomes for the people to make their voices heard, the more elites at
the centre begin to dominate the political process and the less likely it becomes
that the rulers will understand the needs, aspirations and priorities of the people.
This can lead to unpopular, inappropriate and unworkable policies, as well as to a
sense of alienation and frustration that can damage the reputation of the political
system as a whole. Federalism can help resolve this problem, since it enables
substantial powers to be exercised at the state or provincial level, in order to give
people greater opportunities to exercise democratic control and to tailor policies
to their own needs, while entrusting to the centre only those powers that need to
be handled centrally.
3. Advantages and disadvantages of federalism
Diversity
One of the main benefits of federalism is that it provides a framework for the
recognition of ethnic, religious, linguistic or other cultural communities,
reflecting their desire to be recognized as a people with a distinct identity and
particular interests. By guaranteeing substantial autonomy to such groups,
federalism can allow them to exercise partial self-government through state,
provincial or regional institutions while still sharing certain functions with other
communities through federal or national institutions. By satisfying demands for
autonomy and recognition, a federal constitution may protect minorities, prevent
conflict, increase the legitimacy of democratic institutions and reduce pressure for
secession.
However, federalism (at least as it has traditionally been understood and
practiced) is appropriate only where these communities are territorially
concentrated; if ethnic, religious or linguistic communities are not concentrated
in particular geographical areas, other ways of combining self-rule with shared
rule might be preferable (see section 10 of this Primer on possible alternatives to
federalism).
Federalism is therefore ‘suitable for some countries, [but] not all’ (Anderson
2008: 12). Small and homogeneous countries, if viable as independent units, will
generally have little reason to consider federalism. In a large country, or one with
distinct territorially concentrated minorities, federalism is likely to be high on the
agenda.
Coming together and holding together

Historically, small states that were confronted by common enemies or existential
challenges would sometimes come together in unions, leagues or confederations
that were bound together by a treaty or founding agreement. This would enable
these states, without sacrificing autonomy in most aspects of domestic policy, to
share certain powers and functions, particularly in relation to foreign affairs,
defence and trade. In several respects, however, these early unions were more like
today’s intergovernmental organizations than modern federal countries. Their
confederal assemblies were conventions of delegates from the states, not truly
national parliaments.
The United States, under the Articles of Confederation (1781–89), was
initially such a loose union. Congress had no direct ability to levy taxes and was
dependent upon the state governments to execute its decisions. In response to
these shortcomings, the US Constitution created a new type of federation that
was able to produce a more cohesive union while still respecting the reserved
rights of the states in many domestic matters. Enacted in the name of ‘We the
people’ (not ‘We the peoples’), this new Constitution was not a treaty between

Federalism
sovereign states but the constituent act or fundamental law of a new, composite,
federal state. The federal government did not derive its powers from the states but
directly from the people of the United States as a whole. Under it, US citizens
would be subject to two overlapping authorities—the federal and the state
governments—each having direct legislative power in their respective
constitutionally prescribed spheres of competence. This created the model from
which all subsequent federal systems have been (directly or indirectly) derived.
Through successive waves of democratization, federalism has spread around the
world. Federal systems can now be found in emerging and consolidated
democracies; in common- and civil-law jurisdictions; in countries with
presidential, semi-presidential and parliamentary executives; and on every
inhabited continent. As federalism has spread, and as the number of names by
which federalism is known has grown (see Box 3.1), it has increasingly been used
as a means by which an existing state can decentralize power and, as such, has
become a tool for holding large or diverse countries together in the face of
autonomist or secessionist pressures. Thus we see two approaches to federalism: a
‘coming together’ federalism in which formerly independent countries unite into
a federal state, and a ‘holding together’ federalism in which a formerly unitary
state seeks a federal solution to the problems of scale and diversity.
Box 3.1. A note on terminology
Federal systems do not always use the term ‘federal’ to describe themselves. The federal level may
also be known as a ‘national’, ‘central’ or ‘union’ government. Constituent units may be known by a
variety of names, including ‘states’ (Australia, Malaysia, USA), ‘provinces’ (Argentina, Canada,
South Africa), ‘regions’ (Belgium, Italy), ‘cantons’ (Switzerland), ‘autonomous communities’ (Spain)
or ‘Länder’ (Austria, Germany). These differences in terminology do not necessarily correspond to
any particular formal models of federalism or to the substantive distribution of powers.
In this Primer, the terms ‘constituent unit’ and ‘subnational unit’ are used interchangeably as a
generic descriptor for such entities. Some such entities claim a distinct national identity or have a
recognized national status, and the use of the term ‘subnational’ is not to be read as implying a
denial of any such claim or recognition.
Other potential advantages of federalism

Federal government is rooted in constitutionalism and pluralism
Federalism requires power-sharing between federal institutions and those at the
subnational level, such that neither level of government has absolute power. A
well-functioning federal system is by definition constitutional and pluralist, since
it is based on discussion and negotiation between balanced centres of power and
the recognition of minorities under a broad framework of agreed constitutional
rules.
According to Filippov and Shvetsova:
. . . successful federalism requires all of its benefits: well functioning

democratic institutions, [a] judicial system, integrated national
political parties and appropriate electoral incentives created by
democratic political competition. The basic finding of the literature is
that only in well functioning democracies can federalism be a stable
and effective form of government. And conversely, outside of the
democratic context, federalism is ultimately an unstable form, which
logically progresses either to territorial disintegration or to becoming
a mere constitutional formality (2013: 167).
The power-sharing base is broadened

Federalism allows political groups that are minorities on the federal or national
level to hold office at the state or provincial level. This can have a beneficial effect
in promoting political inclusion and a balance of power in countries with a
dominant party at the national level. In South Africa, for example, the African
National Congress party has won large majorities at every national election since
the transition to democracy in the 1990s, but the opposition Democratic Alliance
has enjoyed power in the Western Cape Province. The broader base of office-
holding at subnational levels may also provide greater opportunities for women,
ethnic minorities, poor people and other traditionally under-represented
demographics to be elected to office.
Innovative and pragmatic approaches to policy development are encouraged

By allowing subnational units to develop their own policies to meet their own
needs, federalism can promote innovation and experimentation in policymaking,
enabling states or provinces to pioneer innovative policies that would not be
politically viable at the national level. In 2006, for example, the US state of
Massachusetts was able to establish a quasi-public health insurance system that

Federalism
greatly expanded access to medical care for low-income citizens despite the
absence of such a provision at the national level.
The burden on central authorities is reduced

Federalism frees the central government from having to handle much of domestic
administration and service delivery, enabling it to focus on strategic challenges
and national priorities.
Resources are shared across geographical space

Federalism is a way of ensuring the wider distribution of public resources through
revenue sharing and other forms of fiscal arrangements that guarantee an agreed
share of resources to all areas of a country. Federalism may also encourage more
geographically diverse economic and social development, in contrast to a unitary
state where everything—money, power, culture—gravitates to the capital.
Capacities and democratic responsibilities are developed

State, provincial or regional institutions provide a useful training ground for
citizens, representatives and public officials. In a centralized country, politics takes
places in the capital, and those who are far removed from the capital have few
opportunities to participate in holding office and making decisions; in a federal
country, many more people have the opportunity to participate in public life.
Potential disadvantages of federalism

Duplication of work and lack of coherence
Federalism can duplicate government functions and lead to the delivery of
overlapping or contradictory policies at different levels of government. Although
constitutions often attempt to specify which level of government has primacy in
each area of policy, many policies cut across these functional boundaries or can
affect other policies in unpredictable and undesirable ways. As a consequence, the
responsibility of each level of government for policy outcomes and service delivery
may be hindered by the actions or inactions of other levels of government. It can
become difficult for citizens to know where responsibility lies and to use this
information to hold public officials to account.
Additional operating costs

Maintaining multiple levels of government is expensive. More public institutions
means higher costs for offices, staff, salaries and allowances, and meeting these
costs may place a heavy burden on the treasury of a less economically developed
country.
Increasing regional discrepancies of wealth, resources and outcomes

Unless an effective mechanism for revenue sharing is in place (requiring richer
states or provinces to subsidize poorer ones), federalism can lead to increased
inequality between subnational units because of their different natural resources
or other revenues or levels of development. Federalism may also cause a widening
disparity of outcomes in terms of the provision and quality of public services.
Harmful economic competition between subnational units

A related point is that if the unit of social and economic regulation is smaller than
the unit of free trade and of capital movement (e.g. if working conditions or
environmental regulations are determined by subnational units), then a ‘race to
the bottom’ might result, as subunits compete to attract capital by lowering wages
and costs. This can undermine solidarity and make it more difficult to pursue
economically progressive policies.
Judicialization of politics
A strict constitutional division of power between levels of government may result
in an increased political role for the judiciary, as disputes between the
competences of national and subnational institutions are resolved in the courts
rather than through elected legislatures. In all democratic countries it is necessary
to maintain a careful balance between the independence and neutrality of the
judiciary, on the one hand, and the responsiveness and inclusivity of the judiciary
on the other, but in federal countries striking such a balance is particularly
important.
Potential exclusion of minorities

While federalism can provide opportunities for autonomy and recognition for
cultural minorities, it can also expose minorities within constituent units to
discrimination and oppression, particularly if states/provinces/regions are
established on ethnic, linguistic, cultural or religious lines but contain within
them minorities belonging to different groups. A strong central government, on
the other hand, may protect such locally concentrated minorities and ensure the
equal protection of the law.
The strengthening of local elites who misuse power

Powerful interests can misuse subnational governments for private gain at the
expense of the common good. Corruption, always difficult to eradicate, may be
especially hard to tackle at the state, provincial or regional level, where it may be
embedded in local networks and take place far from the eyes of national anti-
corruption authorities. In situations where many voters are economically or
socially dependent on local elites (for example, because those elites control access

Federalism
to employment, land or other goods), the greatest challenge is to ensure that

decentralized government is decentralized democracy, and not decentralized
oligarchy or autocracy.
Ineffective governance because of a lack of capacity

Subnational governments may be ineffective owing to a lack of the human and
financial resources necessary to fulfil their functions. Constitution-makers should
be aware of the risk of overburdening weak and newly established governing
institutions with demands that they cannot meet—to do so would risk
disillusionment, distrust and discontent.
Instability and threats to democracy

The multiple centres of power associated with federalism may have a destabilizing
effect and can, in the absence of a consolidated democracy, create additional risks
of conflict. While federalism may satisfy demands for autonomy and thereby
diminish the desire for secession, it may also provide an institutional platform for
secessionist demands. These demands, if not accommodated through a further
transfer of powers, could result in a destabilizing and potentially violent secession
or to anti-democratic measures in order to suppress secessionism.
Think Point 1
Considering the advantages and disadvantages of federalism, how can a federal constitution help
ensure that the advantages are maximized and the disadvantages minimized?

4. Distribution of powers
To address the substance (rather than the form) of federalism, it is necessary to

look at the way in which specific powers are assigned to, and exercised by,
different levels of government.
Distribution of legislative powers

Lists of legislative competences
In most federal systems, the federal constitution divides powers between the
federal institutions, on the one hand, and the constituent units of the federation,
on the other, according to one or more lists of legislative competences that are
specified in the constitution (either in the body of the constitutional text or in
schedules at the end of the text).
In some countries, such as Argentina, Australia, Pakistan (since the 18th
amendment) and the United States, there is only one list: a list that enumerates
the policy areas over which the federal institutions have authority. Everything not
explicitly granted to the federal authorities in this list remains, in principle, the
preserve of constituent units.
In other countries, such as Canada, there are two lists: a list of the powers
specifically vested in the provinces and a list of the powers explicitly granted to
the federation. In the Canadian case, residual power rests in the federation—in
other words, everything is in principle a federal matter, whether it appears on the
federal list or not, unless it is explicitly declared to be a provincial matter.

Federalism
There may also be list of concurrent powers, as found in India, Nigeria and
South Africa, over which both the federal and the state/provincial authorities may
legislate. In case of any conflict between them, the usual practice is for the federal
legislation to prevail over state/provincial legislation:
• South Africa has two lists: one (schedule 4) enumerating the exclusive
powers of the provincial authorities and the other (schedule 5)
enumerating the concurrent powers shared between the provincial and
national authorities.
• India has three lists: a Union List (schedule 7, list I) enumerating the
exclusive powers of the central legislature, a State List (schedule 7, list II)
enumerating the exclusive powers of the state legislatures and a
Concurrent List (schedule 7, list III) enumerating the areas of shared
authority.
In general, enumeration of concurrent powers represents a more integrated and

flexible model of federalism, in which there are shared competences. It allows for
pragmatic variation in the actual distribution of functions and powers between
different levels of government, since the federal or central government can
legislate for a particular area of policy without denying the right of the state or
provincial level to legislate in that area to the extent that it is practicable and
convenient to do so.
Supremacy
If a constitution makes provision for concurrent powers, it must also—to avoid
conflict or legal uncertainty—specify which level of government has supremacy in
the event of any incompatibility or conflict between them. If supremacy rests with
the national or federal level (e.g. as in Germany and India), then the area of
concurrent legislative authority is essentially that which the federal legislature
chooses, by non-intervention, to leave to the states; at any time, the federal level
can intervene to impose its will over concurrent matters. On the other hand, if
supremacy rests with the states, provinces or regions (which is rare, but was
found, for example, in the 2005 Constitution of Iraq), then concurrent authority
is that which the subnational legislatures choose to leave up to the federal or
national legislature; at any time, the subnational legislatures may reclaim power
from the centre and assert their own legislative authority over a concurrent
matter.
Residual powers
Since not every possible policy area can be provided for, a constitution must also
specify where residual, or unspecified, powers lie. In so-called ‘coming together’
federations, residual powers are typically retained by the constituent states or

provinces (e.g. US), while, in ‘holding together’ federations, they are usually
vested in the national or federal level (e.g. India) (Anderson 2008: 26).
Transfer of legislative competences

Lists of competences, even if provision is made for concurrent lists, are static. To
reflect the needs of changing societies and variable political circumstances, some
federal systems make provision for the limited transfer of powers by statutory
means between levels of government. The Indian Constitution furnishes several
examples of such provisions:
• Any two or more states may, by resolutions of their state legislatures,
confer powers that are on the State List to the central parliament, which is
thereby empowered, on a permanent basis, to regulate that matter, in
relation to those states, by means of national legislation (Constitution of
India, article 252).
• The upper house of parliament (which is indirectly elected by the state
legislatures) may, by a two-thirds majority, pass a resolution authorizing
the parliament to legislate with respect to matters on the state list, thereby
extending, almost without limits, the scope of central legislative power;
however, such a resolution remains in force for one year only (but may be
renewed indefinitely), and laws enacted under this provision lapse six
months after the end of the period during which the resolution is in effect
(Constitution of India, article 249).
Distribution of executive powers

It is usual for the distribution of executive powers to mirror the distribution of
legislative powers, such that the federal executive is responsible for administering
programmes and enforcing laws that are enacted by the federal legislature, while
subnational executives are responsible for administering and enforcing laws
enacted by subnational legislatures.
In some cases (e.g. Germany), however, federal executive powers are narrower
than federal legislative powers, such that state/provincial executives are
responsible for implementing and enforcing federal laws in some policy areas. If
well handled, this arrangement can provide unity in legislative frameworks while
allowing discretion to the states over priorities in implementing laws.

Federalism
Which powers should be exercised at which level?

In almost all cases, the federal authorities have sole responsibility for matters such
as defence, foreign policy, citizenship and immigration, and macro-economics
(such as currency and foreign trade). Beyond this, the extent to which powers are
distributed between different levels of government varies considerably (see Table
4.1). A general trend is for more recent federal constitutions to grant more powers
to the federal level, consistent with an expanding role for government in modern
societies (Irving 2008: 68). In some ‘holding together’ situations, however, a
reverse trend is evident, as divergent regions have sought to expand their powers
at the expense of federal or national authorities (e.g. Belgium, Spain). In practice,
much depends on the degree and intensity of demand for decentralized powers
and on the negotiating strengths of each side.
Aside from a struggle for power and resources, some criteria must be employed
to assess whether the constitutional distribution of powers between different levels
of government is acceptable and practicable. Subsidiarity is an orientating
principle that has been widely—although not universally—accepted as a guide to
finding a good balance. Subsidiarity requires that ‘a community of a higher order
should not interfere in the internal life of a community of a lower order,
depriving the latter of its functions, but rather should support it in case of need
and help to co-ordinate its activity with the activities of the rest of society, always
with a view to the common good’.
In other words, subsidiarity makes a presumption that powers should rest with
the state, provincial or regional bodies, which should be free to act autonomously.
However, simply acquiescing to every demand for autonomy would not
necessarily produce good government or sustainable outcomes. To avoid
economic instability, for example, the federal government might need to retain
certain expenditure responsibilities that particularly affect aggregate demand or
that fluctuate with the economic cycle, such as unemployment benefits. There are
also situations where the use of a power by one state, region or province could
seriously disadvantage or prejudice another (e.g. in the fields of environmental
protection or interstate water management), as well as situations where it makes
sense for cooperation to extend over internal boundaries in order to achieve
common goals (in the co-financing and maintenance of trunk roads and other
infrastructure projects). Likewise, a public expectation of minimum standards
throughout the country covering public services, such as health and education,
might lead to a reasonable call for national regulation of those services. In these
and similar cases, the principle of subsidiarity may justify allocating powers to the
federal level.
Table 4.1. Distribution of powers in selected federal (or quasi-federal) countries
Power Australia Canada Malaysia Nigeria Pakistan South Africa
General administration
Foreign affairs Federal Federal Federal Federal Federal Central
Defence Federal Federal Federal Federal Federal Central
Police Shared Shared Federal Federal Units Central
Fire and rescue Units Units Federal Shared Units Units
Criminal justice Shared Units Federal Shared Units Central
Civil justice Shared Shared Federal Units Units Central
Elections Shared Shared Federal Shared Federal Central
Education
Primary Units Units Federal Units Units Shared
Secondary Units Units Federal Shared Units Shared
Vocational Shared Units Federal Units Units Central
Universities Shared Units Federal Shared Units Central
Health and welfare
Family welfare Units Units Federal Unspecified Unspecified Central
Social security Federal Units Federal Unspecified Units Central
Primary care Shared Units Federal Units Units Shared
Hospitals Units Shared Federal Shared Units Shared
Public health Shared Shared Federal Units Shared Shared
Transport, infrastructure and facilities
Highways Shared Shared Shared Shared Units Shared
Urban roads Units Units Units Shared Units Units
Ports Units Federal Federal Federal Federal Central
Airports Federal Federal Federal Federal Federal Central
Electricity Units Units Units Federal Shared Units

Federalism
Power Australia Canada Malaysia Nigeria Pakistan South Africa
Environment and sanitation
Housing Units Units Shared Shared Units Shared
Town planning Units Units Shared Units Units Units
Water and sanitation Units Units Federal Units Units Units
Environmental protection Shared Shared Federal Units Shared Shared
Consumer protection Shared Shared Unspecified Shared Units Central
Economic powers
Agriculture, forests and Shared Shared Shared Federal Units Central

fishing
Trade and industry Shared Shared Shared Shared Shared Central
Tourism Shared Shared Shared Shared Shared Shared
Source: Adapted from Commonwealth Local Government Forum, Commonwealth Local Government
Handbook 2013/14 (London: Commonwealth Local Government Forum, 2014).
Notes: This table indicates the levels of government at which policy delivery is principally handled.
This may differ from the distribution of legislative power. Attribution of a power to the state/
provincial level does not necessarily exclude further decentralization to local authorities.
To make these choices wisely, it is necessary to consider the degree and types of
autonomy that the subnational units seek, and to understand the reasons why
they seek it. For example, where federalism is a response to cultural diversity,
there will usually be a demand for education, language laws, broadcasting and
matters of cultural policy to be handled by the states, provinces or regions, while
there might be a general willingness to allow aspects of economic, fiscal and
welfare policy to be centralized. Conversely, if, in a culturally homogeneous
society, federalism arises from the desire for more local control over the
distribution of resources, these positions are likely to be reversed.
Socio-economic effects of the distribution of powers

Constitutions vary in the extent to which powers over the economy, public
services and social security programmes are formally centralized. For example, the
US Constitution makes no provision for social security, poverty relief,
employment law, health care, public education, transportation or environmental
policy to be determined at the federal level; these are all the domain of the states.
To the extent that the US Government is involved in these policy areas at all, it is
usually through the elastic application of its power to ‘regulate interstate
commerce’ or through conditional fiscal transfers to the states. This is a clumsy

and inefficient arrangement which makes it difficult to adopt national policies or
ensure uniform outcomes. Moreover, although the courts have generally allowed
the federal government broad latitude to act in this way, it has resulted in some
policies and programmes being contested in the courts.
In Australia, in contrast, the Constitution was amended in 1946 to grant the
federal parliament the power to enact laws with respect to ‘invalid and old-age
pensions’; ‘the provision of maternity allowances, widows’ pensions, child
endowment, unemployment, pharmaceutical, sickness and hospital benefits,
medical and dental services . . . benefits to students and family allowances’ (art.
51, xxiii and xxiiiA). This means there are no constitutional obstacles to
developing national policies in these areas.
Because constitutions, in addition to defining legal rules, are political
documents that signal intent and express identity, the explicit recognition that the
federal government has responsibility for public services, social security and
welfare policies may strengthen the political case for the extensive exercise of
federal power in these policy areas in order to raise national standards.
Development and availability

Constitutional designers cannot always successfully prescribe or predict how the
distribution of powers will develop over time. For example, Canada was intended
to be a rather centralized federation, with all powers being exercised at the federal
level except for those few that were specifically reserved for the provinces. The
USA was intended to be a decentralized federation, with the bulk of power
reserved for the states. However, the histories of these two countries have diverged
from their framers’ intentions. The USA has become more centralized over time,
while Canada has developed stronger provincial autonomy. This variation is, in
part, due to judicial decisions, but it is also due to circumstantial considerations,
such as the fact that the USA had a civil war over the issue of secession while
Canada did not, that the USA became a military superpower while Canada did
not and the fact that Canada contains a major, territorially-concentrated cultural-
linguistic minority whereas the USA does not.
The party system—in terms of the number, relative strengths, ideological
polarization and internal organization of political parties—can also influence the
development of federalism in ways that are difficult for constitution-builders to
prescribe or predict. If parties are organized and led on a national/federal level,
such that regional/state/provincial parties act as branch offices of the national
party, and if the same set of parties are electorally competitive in different parts of
the country, then parties may act as important channels of unity, interest
aggregation and policy coordination. If, however, parties are loosely organized
and dominated by subnational leaders, or if the electoral strength of different

Federalism
parties varies widely between different parts of the country, then those in power at
the subnational level may seek to use their powers in order to restrain, counteract,
frustrate, or simply steer a different course from, the national government. Thus,
within the same institutional structures, subnational institutions may have
minimal or maximal approaches to the use of their powers, and may have
cooperative or conflictual relations with the national or federal government,
depending on the partisan composition of the majorities at each level.
This may seem discouraging, since no constitutional agreement can be
definitive, but it also means that (a) federal systems can respond to changing
needs; and (b) those who do not get everything they want from the
decentralization provisions of a constitution at the outset can still pursue their
goals through the constitution as it is applied and adjudicated in future. A federal
constitution, in other words, provides a secure basis for the negotiation of powers
between institutions over time.
Competitive versus cooperative federalism

A distinction is sometimes made between competitive and cooperative modes of
federalism. In competitive federal systems, national and subnational institutions
regard themselves as fundamentally distinct institutions, overlapping in territorial
jurisdiction but occupying separate legal spheres; in principle, each gets on with
its own business while ignoring the other. In cooperative federal systems, national
and subnational institutions regard themselves as partners in government, sharing
powers for the common good; the states or provinces have extensive involvement
in the formulation of federal policies, on the one hand, while the federal
government relies on the states for the implementation of its policies, on the
other. A typical instrument of cooperative federalism, for example, is the
framework law, whereby the federal legislature lays down basic goals and
principles for a policy area and then allows the states to implement these in their
own ways.
However, while there are important structural and constitutional differences
between these types, these differences should not be exaggerated. As shown above,
forms of informal cooperation exist even in competitive federal systems, while
competition over powers and resources is found even in cooperative federal
systems.
5. Asymmetrical federalism
Symmetry and asymmetry

Asymmetrical federalism is a form of federalism in which different parts of a
country’s territory have different degrees of autonomy. It can be contrasted with
symmetrical federalism, in which all subnational units have equal juridicial status
and powers. Asymmetry is usually—although not necessarily—a product of
‘holding together’ federalism. When independent states are coming together to
form a federation, they usually do so on equal terms, but when an existing
country is dividing itself into federalized components in order to accommodate
desires for autonomy, it often has to accommodate different parts of the country
to different extents, depending on the different intensities of separate identity or
interest, rooted in cultural, historical or geographic particularities.
• In Spain, a distinction was made between so-called ‘historical’ regions—
those with a history of self-government and, often, a distinct linguistic
identity—and other parts of the country, with additional powers being
granted to the historical regions but not to the other regions. For example,
the Basque Country and Navarra have particular rights in regard to the
levying and collection of their own taxes, while Catalonia has its own
police force, which has largely replaced the Spanish state’s national police
and Civil Guard forces. Some, but not all, of the regional autonomous
communities have their own co-official language.
• In Canada, the Constitution recognizes various small asymmetries, since ‘a
number of [constitutional] provisions apply only to one, or more
provinces, but not all. Many of these provisions address the

Federalism
accommodation of minority groups, linguistic minorities in general, and

the circumstances of Quebec in particular’ (Bodnar 2003).
Asymmetry may also be a response to differences in capacity for autonomy. A

poor or less developed area may have a lower capacity for self-government than a
prosperous one, and may be more heavily dependent on transfer payments from
other parts of the country via the central government.
Government of territories and dependencies

Another form of asymmetry occurs when a federal country has territories that
belong to the federation but are not constituent units of it.
• Canada consists of 10 provinces and three territories. The provinces are
full members of the federation. The territories belong to Canada, and are
governed as part of Canada, but they are not members of the federation.
Unlike provincial legislatures, the powers of territorial legislatures are not
regulated in the Constitution but rather in ordinary federal statutes, and
the consent of the territories is not required for the approval of
constitutional amendments.
• India consists of 29 states and seven Union Territories. The states are
members of the union (Constitution of India, article 1), while the Union
Territories are parts of India but not part of any state.
The distinction between the constituent units of a federation and the territories
of a federation usually arises because the territories are deemed unsuitable, in
some way, for full membership of the federation, usually because they have a very
small population, low governance capacity and a lack of fiscal resources (e.g. the
Cocos (Keeling) Islands in relation to Australia). Lands that have been obtained
by a federal country as a result of war might be governed as territories rather than
integrated as members of the federation (e.g. Puerto Rico in relation to the USA).
Although most territories belonging to democratic federations have some form
of representative government for local affairs, the citizens resident in territories
may have fewer political rights than their co-citizens resident in the constituent
units. In the USA, for example, representation is structured through the states, so
US citizens resident in a territory would not be represented in the US Congress
(except by a non-voting member). However, this is not an inevitability; in
Canada, voters in territories are in fact slightly over-represented in proportion to
their share of the total population in the lower house of the national parliament.
Capital territories
Many federations establish a separate capital territory where the federal capital is
located (e.g. Canberra, Australia; New Delhi, India; Abuja, Nigeria; the District
of Columbia, USA). The creation of a capital territory has several advantages.
First, it asserts the neutrality of the federal capital in relation to the constituent
units, thus helping, for example, to avoid allegations of favouritism in the
distribution of federal funds. Second, it protects the personnel and institutions of
the federal government from the potential risk of interference by any state
government under whose jurisdiction they might otherwise fall.
The establishment of a capital territory, distinct from the capital of any
constituent unit, and geographically removed from the capital of the former
unitary state, may also serve as a clear signal of the government’s commitment to
the (physical and geographical) decentralization of power. The degree of
autonomy granted to capital territories varies. In the District of Columbia, all
laws are directly made by the US Congress, while local administration is in the
hands of an elected mayor and city council. In contrast, Delhi, the Indian
National Capital Territory, has (since the 69th Amendment) a form of
government closely resembling an Indian state, with an elected legislative
assembly and chief minister exercising state-like powers.

Federalism
6. The boundaries of constituent

units
In defining the territorial boundaries of constituent units, it is necessary to

balance diverse and often contradictory needs, as shown in Table 6.1. Trying to
achieve this balance in a way that is broadly agreeable to all major political actors
can be one of the most difficult aspects of the constitution-building process.
How much discretion do constitution-builders have?

In some cases (particularly in ‘coming together’ federations where pre-existing
states wish to retain their existing boundaries or where territorial boundaries are
constrained by peace agreements after a conflict), constitution-makers will have
little discretion over the determination of boundaries; in such cases, constitution-
makers might have to accept boundaries that are not necessarily rational from an
economic or administrative point of view, and will have to accommodate these
realities in the design of the constitution. Such accommodation may include, for
example, a provision for fiscal transfers that support the economies of poorer
subnational units or a provision for the asymmetrical distribution of powers in
recognition of very different capacities and levels of development.
In other cases (such as when federalism arises in a relatively homogeneous
country as a response to the perceived over-centralization of power), there might
be an opportunity to redraw boundaries along lines that are more practical from
an economic or administrative point of view, e.g. to ensure broad equality of
wealth and population size among constituent units.
6. The boundaries of constituent units
Table 6.1. Factors to be considered in drawing the boundaries of constituent

units
Area Factors
Economic Efficiency, effectiveness, viability (an argument for avoiding many small or economically poor
affairs units) and grouping economic regions
Socio-cultural Nationality, ethnicity, language, religion, tribe and clan

affairs
Geographic Natural boundaries including rivers and mountains

features
Political May mean breaking up one or more dominant regions, or a region that may have separatist
balance tendencies, or avoiding a structure with just two or three units (that are often characterized
by divisive politics)
Public opinion May be assessed through elections, referendums or public consultations
Historic Which people often identify with, and which can serve as a useful reference point and obviate
boundaries the need for detailed consideration of other factors in drawing boundaries
Source: Anderson, G. and Choudhry, S., ‘Constitutional Transitions and Territorial Cleavages’,
International IDEA Working Paper, June 2015, <http://www.idea.int/publications/catalogue/
constitutional-transitions-and-territorial-cleavages>, accessed 28 July 2017
Should boundaries reflect cultural communities?
In some countries, the success of the constitutional process will depend on

granting autonomy and recognition to ethnic, linguistic, cultural or religious
communities, and, in such cases, there may be a strong presumption in favour of
drawing boundaries along lines that reflect these communal identities. However,
this approach may be difficult in practice: just about any attempt to draw
boundaries along strictly cultural lines will result in enclaves, exclaves and
incoherent boundaries, and the resulting units might vary widely in size, level of
development, access to resources and capacity for self-government. Moreover,
culturally determined boundaries might also reinforce communal identities,
inflame communal rivalries over access to power and resources, leave minorities
within minorities isolated and exposed and result in increased pressures for
secession. This is not to say that demands for territorial boundaries to be drawn
along communal lines should be rejected, only that (a) the difficulties of this
arrangement should not be ignored; and (b) these demands should be balanced
against other factors in the determination of boundaries.

Federalism
Should a constitution specify boundaries?

It is not always necessary for territorial boundaries to be specified in a
constitution. Instead, they can be determined by sub-constitutional means, such
as by ordinary legislation or by organic laws. This may be a solution to the
problems outlined above, or at least a way of postponing the resolution of such
problems so that they do not derail constitutional negotiations. It also allows for
future changes in population distribution or other demographic considerations to
be accommodated without needing a constitutional amendment.
For example, federalism in India was not the product of a compact between
previously independent states, but an attempt by the Constituent Assembly to
establish a system of multi-level government that would be effective and
responsive to the needs of a large country containing a plurality of ethnic,
linguistic, cultural and religious identities. In the Constituent Assembly, there was
a disagreement between those who wished to redefine state boundaries on
communal (mainly linguistic) grounds and those who wanted to retain the
existing colonial-era boundaries, which meant states would be linguistically
mixed. As a compromise, the existing boundaries were retained at the outset, but
the national parliament was empowered by the constitution to unilaterally alter
the boundaries of states. The state legislatures must be formally consulted, but
their consent is not required. This provision has since been used to mitigate
tensions by bringing state boundaries more closely into harmony with cultural
and linguistic boundaries (Anderson 2008: 20). In the Assam region, for example,
ethnic tensions have been eased—although not resolved—by the redrawing of
boundaries and the splitting of that state into several new, smaller states.
However, this substantially weakens the federal nature of such a system, since, if
the states cannot control their own borders, they will be highly dependent on the
goodwill of the central authorities for their very existence.
In Spain, the Constitution (article 143) allowed existing ‘bordering provinces
with common historical, cultural, and economic characteristics, the island
territories, and the provinces with a historical regional unity’ to accede to self-
government and constitute themselves as autonomous communities. This
approach, as in India, allowed for flexibility and prevented the constitution-
building process from stalling on the definition of boundaries. Unlike in India,
however, the localities themselves constitute the boundaries of autonomous
communities through their own voluntary and mutual actions, and these
boundaries cannot be unilaterally amended or imposed by the central legislature.
7. Institutions of government within constituent units
7. Institutions of government
within constituent units
Subnational constitutions and institutional structures
In a federal system, the constituent units need to have workable structures of

government through which the powers vested in them can be exercised. These
structures need to be established in their own subnational constitutions, in the
federal constitution or, in some cases, by special statutes.
Forms and structures of democracy at the subnational level

The institutions of constituent units usually replicate, on a smaller scale, national/
federal institutions. For example, provincial legislatures in South Africa are
proportionally elected, like the national parliament, whereas state legislatures in
the USA are elected by single-member plurality, like the federal Congress. Yet the
existence of subnational governments also allows scope for institutional
innovation: the US state of California and the German state of Bavaria, for
instance, rely heavily on direct democracy (referendums and legislative initiatives),
although direct democracy is absent at the national level in their respective
countries. In rare cases, subnational institutions may function very differently
from the national level: in Italy, for example, the national government is
parliamentary, but regional institutions are basically presidential in form, with
directly elected regional governors.

Federalism
Particular constitutions for each constitutent unit

In some federal systems, the constituent units have the authority to adopt their
own constitutions within specified (usually broad) parameters:
• The Constitution of Australia both protects and recognizes the existing
constitutions of the states, while allowing each state to modify its own
constitution according to its own procedures: ‘The Constitution of each
State of the Commonwealth shall, subject to this Constitution, continue as
at the establishment of the Commonwealth, or as at the admission or
establishment of the State, as the case may be, until altered in accordance
with the Constitution of the State’ (section 106).
• In Argentina, the national constitution specifies certain general democratic
conditions that the subnational constitutions must meet: ‘Each Province
shall adopt for itself a constitution under the republican, representative
system, in accordance with the principles, declarations, and guarantees of
the National Constitution, ensuring its administration of justice,
municipal government, and elementary education. Under these
conditions, the Federal Government guarantees to each Province the
enjoyment and exercise of its institutions’ (article 5).
The ability of each unit to adopt its own constitution means there can be
considerable variation between them. For example, provisions with regard to
electoral systems, terms of office, direct democracy, second legislative chambers
and other details can differ between subnational units in response to particular
needs and preferences.
National-level regulation of subnational institutions

In other cases, the institutions of subnational government may be prescribed by
the federal constitution:
• The 1999 Constitution of Nigeria, for example, describes the institutions
of the subnational governments in some detail, giving each unit an
identical system of government.
• The Constitution of India prescribes the mechanisms of government at the
subnational level, although it introduces some scope for local variation by
allowing states to choose between a unicameral and a bicameral legislature.
This prescriptive approach is most attractive in situations where there are no

pre-existing subnational institutions, and where these therefore have to be created
7. Institutions of government within constituent units
by the national constitution. It is also attractive in situations where democracy

and the rule of law are less well established, and where, as a consequence, it is
safer to prescribe its institutional forms than to rely on local initiative. In such
cases, the national constitution has an important role as a guarantor of democracy
at all levels.
Regulation of subnational institutions by special statutes

A third design option is for the institutions of constituent units to be regulated by
special laws, such as statutes of autonomy that are negotiated between the central
government and each state, province or region. This procedure allows constituent
units to be involved in the design of their own institutions, but it also gives the
federal government a voice in the process. It can be regarded as a middle course
between allowing each constituent unit to adopt its own constitution, on the one
hand, and prescribing one-size-fits-all institutions in the federal constitution, on
the other. This arrangement is more common in quasi- federal countries that use
regional decentralization (see section 9) than in truly federal systems.
• In Spain, ‘Statutes of Autonomy’, establishing the institutions of the
autonomous communities have a status below the constitution but above
ordinary law, and they can only be changed with the consent of both the
national parliament and the autonomous community concerned. In the
Spanish case, the constitution requires that statutes of autonomy conform
to certain basic principles of democracy, including the election of an
assembly by proportional representation and universal suffrage, the
election of a regional president by a vote of the assembly and the
establishment of an executive cabinet that is responsible to the assembly, as
well as rules concerning the independence of the judiciary (article 152).
• In Italy, regional institutions are defined by special statutes that ‘in
compliance with the Constitution, shall lay down the form of government
and basic principles for the organization of the Region and the conduct of
its business’ (article 123).

Federalism
8. Fiscal federalism
Tax collection and revenue sharing

The economic effects, advantages and disadvantages of different taxation systems
are beyond the scope of this Primer, but a key consideration for constitutional
designers is the extent to which subnational units should have their own tax base
and their own revenue-raising powers. Whatever the legal distribution of
legislative powers, the distribution of access to funds can be a major determinant
of the practical degree of centralization or decentralization. Therefore, robust
funding arrangements that give state, provincial or regional authorities sufficient
resources and sufficient autonomy in the allocation of those resources are
necessary if effective decentralization of power is to be a reality.
Full fiscal autonomy

Full fiscal autonomy is an arrangement whereby subnational legislatures raise all
of their own financial resources through their own taxes, charges, fees and loans,
and they each pay for their own administrative costs and public services out of
their own budgets. The federal government does not have its own tax-collecting
powers, but requires subnational governments to make payments to defray the
costs of shared services. These payments may be assessed on the basis of
population or by some other formula, as specified in the constitution or as agreed
from time to time between the federal government and the subnational units.
8. Fiscal federalism
This provides the subnational units with a maximum degree of fiscal freedom
and responsibility to their own citizens, as well as fiscal levers through which to
influence economic development, but it may have several adverse consequences,
including:
• economic efficiencies arising from different forms and rates of taxation;
• tax shopping (taxpayers relocating to the least burdensome area) and a
resulting race to the bottom (whereby subnational authorities race to cut
taxes in order to attract businesses, thereby eroding their revenue-raising
ability, with severe implications for public finances and the delivery of
public services);
• increased economic disparities between subnational units; and
• a weak federal government, which becomes overly dependent on the
goodwill of subnational units in order to meet its financial needs. For these
reasons, full fiscal autonomy is rare in federations and more common in
loose confederations or situations of special autonomy.
Division of revenue-raising powers

A common arrangement in federations is for some taxes to be levied by
subnational units and others to be levied by the federal government, and for this
assignment of tax-collecting powers to be constitutionally prescribed. As a general
rule, to avoid the risks of tax shopping and a race to the bottom, taxes on things
that are portable (such as income and capital-gains taxes) are usually better
handled by the federal government, while those on things that are less mobile
(such as sales and property taxes) are handled at the state or provincial level.
Borrowing powers
Borrowing is another potential source of revenue for subnational governments.
Federal systems vary in the extent to which they permit subnational governments
to incur debts and the extent to which they guarantee such debts. A federal
guarantee of debts can protect subnational governments from bankruptcy but
may also encourage a lax approach to borrowing and spending unless such
guarantees are accompanied by federal supervision of subnational budgets.
Mandated sharing of revenues

This is an arrangement whereby one level of government sets and levies taxes, but
where the revenues raised from those taxes are then distributed, according to
some prescribed or agreed formula, between two or more levels of government: a
constitution, for example, may prescribe that all income taxes are to be
determined federally (for the reasons set out above), but that part of the revenues

Federalism
raised from such taxes are to be reserved for use by subnational authorities.
Revenues may be divided on the basis of the location of derivation (i.e. each
subnational unit is entitled to a share of the revenues raised in that unit, meaning
that each unit has incentives to maximize its own tax base, even though this may
increase regional discrepancies) or on the basis of population or assessed fiscal
needs (which can have an equalizing effect between units).
Federal grants and loans

If subnational units do not generate sufficient revenue internally to support their
functions, they will be dependent on external sources of finance, most notably
from the federal government. Such dependence may limit their autonomy, since
federal grants or loans often come with binding conditions. In the USA, for
example, conditional grants (whereby the states receive money to support a
particular programme or policy only if they act in accordance with the legislative
framework laid down by the federal Congress) have been used by the federal
government to extend the range of federal control into areas such as education,
roads and health care, areas that are, by a strict reading, constitutionally reserved
for the states. In some cases, the right of the national legislature to provide for
spending through federal grants or loans is explicitly recognized in the
constitution (e.g. Nigeria); in others (e.g. Belgium), such spending is limited by
court decisions (Anderson 2008: 38).
Institutionalizing flexibility: finance commissions

Disagreements over the allocation of revenues or the distribution of taxation
powers may be a sticking point of constitutional negotiations. Part of the
difficulty is that these are, or appear to be, zero-sum negotiations: every penny or
cent granted to subnational authorities is directly lost to the federal authorities.
The long-term outcome of agreements reached during the constitution-building
process can also be unpredictable. For example, agreements might be reached on
the assumption that oil is abundant, and these agreements might be tenable as
long as oil revenues are steady, but if the price of oil drops, or the supply of oil
dries up, this could cause a fiscal crisis from which the constitution offers no easy
escape route.
One solution is to introduce a degree of flexibility into the fiscal arrangements
of the constitution, such that these negotiations, rather than being tied to the
constitution itself, can be revisited from time to time. In India, for example, there
is a Finance Commission (article 280), which is appointed at five-year intervals to
advise on the distribution of certain tax revenues between the Union Government
and the states. A similar National Finance Commission, consisting of national
and provincial finance ministers, exists in Pakistan (article 160).
9. Federalism and the constitution as a whole
9. Federalism and the

constitution as a whole
The decision to adopt a federal system will shape the rest of the constitutional
structure, with implications for the structure of the legislature, the constitutional
amendment process and other aspects of constitutional design.
In situations where federalism is adopted primarily as a response to the
diversity of a heterogeneous society, federalism’s commitment to territorial
decentralization cannot be considered in isolation but only in relation to the
whole package of constitutional provisions that form the bargain between
communities, including such matters as language, religion and minority
representation.
Constitutional supremacy and constitutional amendment

rules
Constitutional supremacy (the juridical superiority of a constitution over
ordinary laws) and constitutional entrenchment (the fact that it is more difficult
to amend a constitution compared to ordinary laws) are necessarily associated
with federalism.
The supremacy and entrenchment of the constitution provide guarantees to the
subnational units that their existence, status and powers will be recognized and
their autonomy respected. If these guarantees are breached, the subnational units
will usually have recourse to a supreme or constitutional court. Without such
protection there can be no truly federal sharing of sovereignty and no clear
guarantee of autonomy against majorities at the centre.

Federalism
In a federal country, the process for amending the constitution might have to
be designed so that it prevents any change to the distribution of powers without
the consent of the subnational units:
• Australian states have a constituent role: reflecting the federal nature of the
polity, sovereignty is shared, through the amendment procedure, between
the people of Australia as a whole and the people of each state as a unit.
Thus, an amendment to the Constitution of Australia must be approved
not only by a nationwide popular majority but also by a majority in at
least four out of the six states.
• In some countries, the role of the subnational units may be invoked only
when the proposed amendment concerns the powers or jurisdiction of
those units or other essential parts of the constitution integral to the
federal arrangement. In India, for example, the constitution can be
amended by a two-thirds majority of votes cast in both houses of the
central parliament, but amendments concerning the distribution of powers
between the central government and the states, the representation of the
states in the central parliament, and the judiciary, as well as certain other
provisions, must also be approved by a majority of the state legislatures.
• In some cases, a unanimity rule may apply. The Constitution of Canada
provides a general amending formula by which amendments must be
approved by the legislatures of two-thirds of the provinces, having between
them at least 50 per cent of the population. This rule was designed to
ensure that each of the two most populous provinces (Ontario and
Quebec) would, in most cases, have a veto over amendments. Certain
specified amendments, however (including those relating to the status of
English and French as official languages and the composition of the
Supreme Court), require unanimous approval by all provinces.
Amendments that specifically limit the powers and rights of provinces
apply only to those provinces adopting the amendment, giving each
province an opportunity to opt out to protect its rights.
• The principle of federalism may be an unamendable provision, protected
by a so-called eternity clause (e.g. Germany). Courts may also decide that
federalism is such an essential and defining feature of the basic structure of
the political system that it is, in principle, beyond the reach of the
amending power (e.g. India).
For more information, see International IDEA Constitution-Building Primer

No. 10, Constitutional Amendment Procedures.
Participation of subnational units in national legislation and

policymaking
As well as guaranteeing the autonomy of constituent units (self-government),
federalism also includes the establishment of institutions designed to promote the
recognition and inclusion of these units at the national or federal level (shared
government).
This typically takes place through the upper house of a bicameral legislature,
the members of which may be directly elected by the people of the states,
provinces or regions (Argentina, Australia, Kenya), indirectly appointed or elected
by subnational legislatures (Austria, Germany, Pakistan) or selected by some
combination of these means (Spain). A range of possibilities exist in terms of how
a second chamber can be constituted, and its role and powers. For more
information, see the International IDEA Constitution-Building Primer No. 2,
Bicameralism.
While second chambers can be a useful means of subnational representation,
they are rarely effective institutions of intergovernmental co-ordination (an
exception to this rule may apply in cases where subnational governments are
directly present in the second chamber, as in the German Bundesrat). Therefore,
to meet the need for better consultation and co-ordination between different
levels of government, other mechanisms have been developed:
• In Canada, for example, there is a First Ministers’ Conference, which
brings together the prime minister of Canada and the premiers of the
provinces. The First Ministers’ Conference has no basis in the written
constitution; it exists only as a matter of conventional practice.
• In Pakistan, in contrast, consultation and co-ordination mechanisms are
formalized in the Constitution. There is a Council of Common Interests
(article 153) that brings together the (federal) prime minister and the chief
ministers of the four provinces, which has a mandate to ‘formulate and
regulate policies’ in relation to a specified range of policy areas (article
154). The 18th Amendment attempted to strengthen the Council of
Common Interests by: (a) requiring the prime minister to constitute it
within 30 days of taking office; (b) extending the range of policy areas over
which it has jurisdiction; (c) requiring the Council to meet at least once
every 90 days; (d) allowing the chief ministers of provinces to request
meetings; and (e) requiring the Council to submit an annual report of its
activities to parliament.

Federalism
• South Africa places a constitutional obligation (articles 40 and 41) on the

national government, the provinces and local authorities to work
cooperatively in their ‘distinctive, interdependent and interrelated’ spheres
of authority, and requires all authorities, at all levels, to conform to certain
norms of cooperation, constitutionalism and good government.
Think Point 2
If federalism is primarily intended to provide recognition and autonomy for particular ethnic,
linguistic, cultural or religious groups, it is important for those engaged in constitutional
negotiations to consider how these objectives can be balanced and supported by provisions for
inclusion at the centre. What scope is there for trade-offs between autonomy and inclusion? What is
more important: decentralization of power to communities or the inclusion of those communities in
the central government?
Executive and judicial institutions

Executive institutions
Where federalism is a response to cleavages of culture or identity in society, other

forms of inclusion for the distinct subdivisions of society may be incorporated
into central institutions, and this can extend to both executive institutions and
legislatures:
• In Belgium, the cabinet must consist of an equal number of French-
speaking and Dutch-speaking members.
• In Switzerland, the presidency rotates around the seven-member executive
council, which, by convention (although not by any constitutional law),
always has a balance of members from French-speaking, German-speaking
and Italian-speaking cantons.
• In Nigeria, a presidential candidate must win not only a plurality of votes
cast but also at least 25 per cent of the votes in two-thirds of the 36 states
(article 133). This rule is designed to promote the inclusion of different
ethnic and religious communities in national politics by making it difficult
for a divisive candidate to be elected.
Judicial institutions
The judiciary in a federation is often called upon to resolve disputes between the
different levels of government and to make pronouncements on the powers and
responsibilities of each level. This places a special responsibility on the supreme or
constitutional court at the apex of the judicial system, which must have an
unassailable reputation for independence, neutrality and competence. In countries
where federalism is a response to cultural diversity, there might be a need to
ensure the representation of different communities on the court or their balanced
participation in the judicial appointments process. In Canada, for example, one-
third of the members of the Supreme Court must be appointed from Quebec. For
more information on the composition of supreme or constitutional courts, see
International IDEA Constitution-Building Primer No. 4, Judicial Appointments.
Scrutiny, oversight and fourth-branch institutions

To ensure effective democracy and clean, responsive governance, and to prevent
power from falling into the hands of local oligarchs and power brokers, an
effective federal system may, somewhat paradoxically, require the existence of
strong central institutions, such as the national civil service, the judiciary and an
electoral management body (electoral commission). Keeping these institutions on
the national or federal level can help uphold the rule of law, protect equality
between individuals, ensure that territorially concentrated majorities do not abuse
their power. Having these institutions operate on the federal level, rather than
creating separate institutions for each state, province or region, can also reduce
duplication and save money.
Emergency intervention by the federal government

Most federal systems allow the federal government to intervene in the internal
administration of the constituent states or provinces in order to ensure democratic
stability or to uphold human rights, the rule of law and basic standards of good
governance. The Constitution of India, for example, declares that, ‘It shall be the
duty of the Union to protect every State against external aggression and internal
disturbance and to ensure that the government of every State is carried on in
accordance with the provisions of this Constitution’ (article 355); if a state fails to
fulfil this duty, the president may make a proclamation to the effect that
legislative and executive powers in the state are transferred on a temporary basis to
the national parliament and to the national government, respectively (article 356).
There are two reasons for provisions of this type: (a) the failure of any part of a
federation to maintain an acceptable democratic standard has consequences for
the well-being of the whole federation (it would be untenable, for example, for a

Federalism
state governed by a dictator to participate fully as a member of an otherwise

democratic federation); and (b) the citizens of each constituent unit have certain
fundamental substantive and due-process rights that it is the duty of the federal
government to uphold, and the federal government could not uphold these rights
without having the power to intervene.
However, a federal power to intervene in the internal politics and
administration of constituent units could be abused in order to undermine the
federal distribution of power. The governments of constituent units would have
real little autonomy if they were in peril of being dissolved or being stripped of
their powers, at any time, for any reason, by an arbitrary act of the federal
government.
One way of preventing abuse of the power to intervene is to limit it in time
and to require explicit legislative approval. In India, a proclamation of ‘President’s
Rule’ in a state must be approved by the parliament within two months, and
thereafter at six-month intervals. In Brazil, the federal president has the authority
to ‘decree and enforce’ a federal intervention in a state (article 84), but the
Congress has the authority to ‘approve’ a federal intervention and to suspend it
(article 49). Additional safeguards in Brazil include the right of an advisory body
(the Council of the Republic) to give its opinion on federal interventions (article
90), the right of the president of the Senate to convene the Congress if a state of
federal intervention is in effect (article 57) and a prohibition of constitutional
amendments during an intervention (article 60).
10. Possible alternatives to federalism
10. Possible alternatives to

federalism
Other forms of macro-decentralization (quasi-federalism)
Federalism has many disadvantages. Even when some form of territorial power-
sharing is needed, federalism is not the only way (and not necessarily the best way
in all contexts) of achieving it. There are four major alternatives: confederation,
devolution, regionalism and special autonomy (federacy).
Confederation
In some cases, confederation may be an alternative to federalism. Confederalism
usually implies a looser form of union than is common in modern federalism.
Representation tends to be organized on an intergovernmental rather than elective
basis, with each state government or state legislature sending delegates to the
confederal assembly. States might have weighted votes, in proportion to their tax
base or population, but typically members of a confederal assembly vote en bloc
as state delegations. The powers of the confederal institutions are typically limited
to a very small range of policy areas such as foreign affairs, defence, trade and
possibly citizenship. The decisions of confederal institutions are typically binding
only on the states, which have to translate them into state law, rather than being
directly binding on the people.
This sort of confederal system is sometimes demanded by groups in federal
systems that are seeking greater autonomy than is permitted under the federal
constitution without the destabilizing effects of full independence. Confederal
solutions have historically been proposed, for example, in Belgium, Spain and
Canada.

Federalism
Devolution
Devolution is a mechanism for decentralizing power without sharing
sovereignty (see Box 10.1. for an example). The essence of devolution is that the
central level (e.g. a national parliament) establishes decentralized institutions (e.g.
a provincial parliament or assembly) and determines the nature and the scope of
the powers that are delegated to those institutions. In principle, if not always
easily in practice, the powers of devolved institutions can be revoked or
overturned, or their institutional arrangements changed, by a unilateral decision
of the central legislature. Devolution is a flexible arrangement that can overcome
some of the difficulties associated with federalism. It does not necessarily require a
rigid constitution or strong judicial review, since most disputes between the
centre and the devolved regions can ultimately be resolved by political
negotiations, not by judicial decisions.
However, this flexibility means that devolution depends on a high degree of
trust and goodwill. If subnational units cannot trust the national legislature to
protect their interests and autonomy by political means, then devolution may
provide insufficient guarantees to the devolved regions.
Box 10.1. Devolution in the United Kingdom: the case of Scotland
The United Kingdom consists of four nations: two kingdoms (England and Scotland), a principality
(Wales) and a province (Northern Ireland). Each has its own culture, political parties and
institutions. Previously, it was a unitary state with all parts of the United Kingdom being governed
directly by the British Parliament in Westminster.
Since 1997, a process of devolution of power to Scotland, Wales and Northern Ireland has been
taking place, based on specific arrangements for each country, such that each has a different
degree of autonomy. Because the UK has no written constitution, the autonomy of devolved bodies
depends on decisions of the British Parliament, and the balance of powers can in principle be
changed by a unilateral decision of the Parliament.
Regionalism
Regionalism blurs the distinction between federalism and devolution. For

example, a regionalist constitution may recognize the existence and perhaps
certain core functions of subnational units (as with federalism) while allowing the
central legislature to limit or extend the powers of these units (as with
devolution). Or it may provide for the representation of the subnational units in
the central legislature but permit the amendment of the constitution without the
consent of subnational units. Italy, for example, developed an innovative regional
structure following the restoration of democracy after the Second World War. In
those parts of Italy that had a notable linguistic minority, or that were
geographically removed from the centre by virtue of being an island, this created,
with immediate effect, five special regions (Aosta Valley, Friuli-Venezia Giulia,
Sardinia, Sicily and Trentino-Alto Adige), each with its own constitutionally
guaranteed autonomy. The rest of Italy was subsequently divided into a further
15 ordinary regions, with fewer powers, in a second wave of regionalization in the
1970s. This was mainly in response to demands for better governance. Thus, in
Italy two approaches to decentralization applied: in the special regions, extensive
decentralization was a means of accommodating cultural differences, while in the
ordinary regions decentralization was a means of improving governance.
However, the improvements in governance have been variable, with some regions
performing better than others (Putnam 1994). The constitutional amendment
process allows any five regional councils to demand a referendum on an
amendment unless the amendment is passed by a two-thirds majority in both
houses of parliament.
Special autonomy (also known as federacy or home rule)

These terms describe a form of asymmetrical autonomy that is usually applied
only to a small jurisdiction that enjoys a privileged semi-detached status in
relation to the larger country of which it is a part or to which it belongs. The
degree of autonomy enjoyed by the jurisdiction, in terms of the range of powers it
possesses and the control it has over its own finances, is usually extensive, but its
degree of integration into the central state is low (for example, it might have
autonomy over almost everything except foreign affairs and defence, but have no
representation, or minimal representation, in the legislature of the central state).
Examples of jurisdictions enjoying special autonomy of this type include the
Cook Islands (New Zealand), the Faroe Islands and Greenland (Denmark) and
Åland (Finland). Overseas Territories like Bermuda, the Cayman Islands and
Gibraltar, and Crown Dependencies like Jersey, Guernsey and the Isle of Man,
also possess a similar degree of special autonomy in relation to the UK; the UK
allows these jurisdictions almost complete self-rule while retaining responsibility
for foreign affairs and defence.
Form and substance

These forms of decentralization are shown in Table 10.1. In practice, these
distinctions are not always clear. Scholars may disagree about the terminology in
general and the classification of any particular constitution.

Federalism
Table 10.1. Federalism and alternative forms of macro-decentralization
Confederation Federation Regionalism Devolution
Locus of legal Ultimately remains Divided between In the country as a In the country as a
sovereignty in the several the several states whole, although whole (in central-
states and the some special level institutions)
federation regions may have a
more bilateral or
conditional status
Permanence of Powers of Permanent, Permanent, but the Powers of devolved

distribution of confederal subject to the distribution of areas can be
powers institutions may rules concerning powers may be revoked, or
be limited or federal negotiable without unilaterally changed,
revoked by the constitutional constitutional by the centre
decision of the amendments amendment
several states
Extent of Almost all aspects Variable: there is no necessary connection between the formal
decentralization of domestic policy constitutional type and the actual degree of decentralization (either
are determined by in terms of the rangeof legislative powers that are decentralized or
the several states; the fiscal arrangements supporting subnational governments)
confederation
mainly limited to
defence, foreign
affairs and trade
Constitutional Narrowly specified Specified in the General outlines Determined by the

basis of powers by treaty or federal may be specified in central legislature
articles of constitution the national and can, in principle,
confederation constitution, but be altered at will by
The constitution details of powers the central legislature
This has, at least will usually be in each region may
in part, the rigid, will be depend on Little or no
character of an upheld by judicial specifically constitutional basis
instrument of enforcement and negotiated or protection for
international law, will typically give regional devolved institutions
not a national the states a voice agreements (e.g.
constitution in the statutes of
constitutional autonomy)
amendment
process
Typical fiscal States raise all of Federal and state National and Varies: may be
arrangements their own legislatures each regional similar to
revenues and have their own legislatures each regionalism, or the
make payments to basis for raising have their own devolved legislatures
confederation to revenue; may be basis for raising may depend on bloc
pay for common some revenue; perhaps grants from the
services redistribution by some central authorities
the federal redistribution
government
between the Some regions may
states have special fiscal
powers
Confederation Federation Regionalism Devolution
Representation Confederal authority Typically (but not Varies: regions Varies, but typically
is a congress of always) two may have some devolved
delegates of the houses of a special institutions, being a
states, often with an federal legislature, representation in creation of ordinary
intergovernmental one elected by the the national statutes, have no
character people as a whole, legislature special
and one representation in
representing the central institutions
federal units
Examples Luxembourg in the Australian states, Regions of Italy, Scotland, Wales and
Benelux Union, US states, Indian autonomous Northern Ireland in
Hungary in the Austro- states, Canadian communities of the UK
Hungarian Empire provinces, Spain
Argentine states
Countries that are difficult to classify, such as Spain or South Africa, may be
considered by some as regionalist but by others as federal (or perhaps as quasi-
federal or as federal in all but name). Besides, these formal differences are not
always reflected in the degree of substantive decentralization. It is not necessarily
the case, for instance, that a formal federation is more decentralized, in substance,
than a regionalized or devolved state. Spain, for example, does not formally define
itself as a federation, but some of its autonomous communities (especially those
with special historical rights, such as the Basque Country) have extensive and
well-entrenched autonomy, while some formal federations, such as Austria and
Malaysia, are highly centralized.
Moreover, these labels may not be very helpful during the negotiations and
deliberations leading to the adoption or reform of a constitution. In a
constitution-building process, some participants may become symbolically
attached to labels like ‘federalism’ or ‘regionalism’. It would be wise, instead, to
first consider the practical needs of the country and of its particular subnational
units, and then to think about how these needs can best be met through a
constitutional design that is both workable and broadly acceptable without
getting too fixated on whether the resulting constitutional framework should be
classified as federal, regional or devolved.
Stronger micro-decentralization (local government)

In some circumstances, stronger micro-decentralization (e.g. devolution of
power to municipal-, county- or district-level authorities) might be an attractive
substitute for federalism or other forms of macro-decentralization. This approach
can be suitable in situations where (a) decentralization is desired to improve
governance, accountability and public participation, and to promote development
policies and services that are tailored to local needs, but where it does not need to

Federalism
accommodate territorially concentrated ethno-religious, linguistic or cultural

diversity; or (b) such communal groups are very locally concentrated, in particular
towns, villages or enclaves, rather than being present in large enough areas to
form viable territorial regions, provinces or states. In these cases, micro-
decentralization may also help protect minorities within minorities; it can be used
not only as an alternative to federalism but also as a complement to it.
However, this approach has also been used cynically to refuse demands for
macro-decentralization based on national or cultural identity. In such situations,
it is unlikely to be an adequate solution (see Box 10.2).
Non-territorial (cultural) autonomy, proportional

representation and veto powers
In some contexts, such as when there is a need for the autonomy and recognition
of particular communities in a relatively small state, or where these communities
are not territorially defined, a system of non-territorial autonomy may be
appropriate. This allows for distinct communities to express their identity and to
manage their interests without having to have separate territorial jurisdiction.
Box 10.2. Alternatives to macro-decentralization: Scotland in the UK, 1979–97
During the 1980s and 1990s, many in Scotland sought to establish a Scottish Parliament that would
have broad legislative powers over domestic affairs. This was, however, strongly opposed by the
British Government. Instead, the UK made use of a variety of alternatives to macro-decentralization.
These ranged from the symbolic (e.g. the return of ‘the Stone of Destiny’, a historical object of
cultural significance, to Scotland) to the institutional (e.g. allowing Scotland to be over-represented
in parliament, in proportion to its share of the British population, or strengthening the legislative
role of the Scottish Grand Committee).
One of the measures attempted was to reform local government in Scotland, creating a new
structure of 32 single-tier local authorities. It was hoped that such local devolution would outflank
demands for national devolution (to a Scottish parliament). These measures proved unsuccessful,
however, and by the time the question was put to the people in a second referendum, in 1997,
there was a broad public consensus in favour of creating a Scottish parliament.
Non-territorial autonomy
Examples of non-territorial autonomy can be found in the various systems of

personal-status law found in some multicultural or multi-religious societies. In
India, for example, Muslims, Hindus and Christians have their own law codes
governing matters such as marriage and divorce: a Muslim man in India may
lawfully enter into a polygamous marriage; a Hindu man may not. In this sense,
law is personal rather than territorial, and, for these purposes, two neighbours
may be subject to the jurisdiction of different laws. Such decentralization of the
law may be accompanied by the decentralization of the judiciary. In Kenya, for
example, there are special courts for Muslim citizens, with jurisdiction over
personal status, marriage, divorce and inheritance, and in which judges (kadhis)
must be practising Muslims trained in Islamic law (Constitution of Kenya 2010,
article 170).
Forms of non-territorial autonomy may be also applied on linguistic grounds,
particularly in the field of education. The Canadian province of Ontario, for
example, makes provision for separate English- and French-language school
boards, and for secular and Catholic school boards for each language. By this
means, the French-speaking and English-speaking communities, as well as both
Catholic and non-Catholic citizens, are able to exercise some cultural autonomy
over education.
Proportional representation
One way of encouraging such accommodation at the centre is to adopt a system
of proportional representation for legislative elections. Electoral systems that
award seats on the basis of a plurality or a majority of the votes cast in single-
member districts are likely to exaggerate any differences in voting patterns
between regions. If a majority of the people in a particular region tend to vote
against the party in power at the centre, this is likely to have two undesirable
consequences: first, the party in power at the centre will have little incentive to
pay attention to the needs and interests of the region in question—if it cannot
win a plurality of the votes, it matters little whether it alienates all voters or only
the majority of them; second, the parliamentary delegation of the party in power
at the centre is likely to have few or no members representing the region in
question and is therefore likely to become increasingly out of touch. This is a
recipe for alienation. Proportional representation can address these two problems.
The governing party at the centre might only win a minority of votes in the
region, but those votes will count in terms of winning seats, giving the party
(a) an incentive to pay attention to that region; and (b) a block of members of
parliament elected from that region who understand the region’s needs.
Minority veto powers

Another possibility is to grant cultural, religious, ethnic or linguistic minorities
veto powers at the centre. In Kosovo, 20 of the 120 parliamentary seats are
reserved for national minorities. The members representing these minorities have
the right to veto laws concerning their ‘vital interests’, including: municipal

Federalism
government, community rights, language laws, cultural heritage, freedom of

religion, education and public holidays (Constitution of Kosovo 2008, article 81).
The representatives of these minorities also have reserved ministerial portfolios
and reserved seats on the Judicial Council and the Central Election Commission.
In Cyprus, the Constitution of 1960 provided for the election of a Greek-
Christian president and a Turkish-Muslim vice president, elected by their
respective communities, who would each possess veto power over certain
governmental decisions and legislation. Neither of these solutions has worked
entirely as intended, but if there is enough goodwill and trust to make such
mechanisms workable, they might enable communal autonomy and recognition
to be realized even in a small state where territorial federalism would be
impractical.
Secession
In some cases, secession may be an attractive solution. Rather than being awkward
cohabitees of a tense and unwieldy federation, it may be better for two countries
to separate and to relate to one another as neighbours. This simplifies governance
arrangements, removing a whole layer of complex federal institutions. Secession
can also help create a smaller, more convenient public space in which democratic
participation can take place; the existence in each state of a more unified demos,
with greater homogeneity of culture, values and interests, may provide conditions
in which the solidarity and social cohesion necessary for effective democracy can
flourish.
A small number of constitutions contain explicit provisions giving the
constituent parts, or certain specified parts, a right to secession. In providing a
right to secession, the constitution can also limit that right or provide procedural
channels for its proper exercise. The 1994 Constitution of Ethiopia, for example,
recognizes the ‘unconditional right to self-determination, including the right to
secession’ of its constituent units, but this right can be exercised only at the
initiative of a two- thirds majority of the members of the legislature of that unit.
Similarly, Nevis, part of the Caribbean nation of St Kitts and Nevis, has a
constitutional right to declare itself independent by a two-thirds majority of the
votes cast in a secession referendum. While such a high procedural barrier may be
an effective guarantee of unity for members of substantial minorities in a
secessionist territory, it may also, depending on the demographics and the
political situation, render a constitutionally protected right to secession difficult
to claim in practice.
The disadvantages of secession may be mitigated when the seceding entities can
meet their needs for security and trade by belonging to a wider international bloc,
such as the European Union, the North Atlantic Treaty Organization (NATO) or
other intergovernmental organization. The short-lived Czechoslovak Federation,
for example, gave way relatively quickly and painlessly to the independent Czech
and Slovak republics, both of which are now members of the EU and NATO.
However, secession is usually only available if the seceding territory is
economically viable and has sufficient state capacity to make independence work;
it might not be a suitable alternative for very small or very poor territories, or
those without a history of stable governance. Moreover, this option is only
attractive if the process of secession can take place peacefully in a mutually agreed
manner; the secession of a territory without the agreement of the central
government may lead to violent conflict and perhaps to a humanitarian crisis that
may then require external intervention. The secession negotiations may need to
consider the rights of minorities in the seceding territory, the distribution of assets
and liabilities, the relocation of inhabitants, the establishment of new state
institutions (such as an army and a diplomatic service) for the territory and
transitional rules for matters such as currency or public pensions. These
arrangements may incur significant costs.

Federalism
11. Decision-making questions
1. Why is federalism being considered, and what is the problem to which

federalism is the proposed solution? Is it motivated by the need to
accommodate deep ethnic, religious, cultural and/or linguistic cleavages?
Or is it a response to demands for greater public involvement in decision-
making and an attempt to make service delivery more responsive to the
people concerned?
2. What are the consequences of the answers to Question 1? What effect will
these answers have on the range of possible options for federalism (e.g.
federalism as a response to cultural diversity might concentrate on the
decentralization of cultural, linguistic, educational and religious
authorities, whereas if federalism is a response to demands for
development and public services, there might be greater emphasis on the
decentralization of economic powers)?
3. Are there existing state or provincial institutions to which further powers
can be decentralized? Or would those institutions have to be created from
scratch? How can these institutions be made properly representative of,
and responsive to, the people?
4. What are the alternatives to federalism? Have regionalism and devolution
been considered? What about other alternatives, such as stronger local
democracy or non-territorial cultural autonomy? How effectively would
these alternatives meet the needs and desires of the people?
5. What is the country’s financial capacity? The institutions of federalism can
be expensive: has a preliminary costing been undertaken? Are these costs
sustainable? Have they been compared to the costs of alternatives?
11. Decision-making questions
6. What is the human capacity of the country? Is there a sufficient number of

educated, capable people to staff an extensive system of federalism? Does
this capacity exist in all parts of the country? If not, what steps can be
taken to develop that capacity?
7. Are demands for federalism uniform throughout the country or only
expressed in certain parts? If the latter is the case, could asymmetric
arrangements providing for the special autonomy of those areas be a better
solution than a one-size-fits-all model of federalism?
8. What fail-safes or guarantees are needed to ensure that decentralized
powers are not used in corrupt, partisan or ineffective ways? Should there
by a reserve power for the central/national/ federal authorities to intervene
in a region/state/province in cases of emergency or failures of governance?
If so, how can such mechanisms be protected against abuse by the centre?
9. Are there natural or historical boundaries that are clear and well
established between the subnational units? Are the areas of subnational
units practical from the point of view of efficiency and good government?
Should there be a mechanism for revising boundaries without needing to
amend the constitution?
10. How should autonomy for subnational units be balanced with the
involvement of those units in national decision-making? What
mechanisms of representation (e.g. inclusion in a second chamber) and
coordination (e.g. inter-executive cooperation) need to be put in place?
11. How can the fiscal arrangements of power-sharing be made flexible to
respond to changing needs and resources, while at the same time
protecting subnational units from undue financial dependence on the
central/national/federal government?
12. Does the amendment formula for the constitution reflect the role of
subnational units in the political system? What is the appropriate balance
between the sovereignty of those units and the sovereignty of the whole?
Are special vetoes necessary to uphold the constitutional bargain?
13. What is the political-party situation? How will the political parties shape
the working of the proposed institutions of macro-decentralization?
Would these institutions still be workable if the political-party situation
were to change radically in the future (e.g. if a dominant-party system were
to become more competitive, or if a two-party system were to fragment
into multiple parties)?

Federalism
References
Where to find constitutions referred to in this Primer
The constitutional texts referred to in this Primer, unless otherwise stated, are drawn from the
website of the Constitute Project, <https://www.constituteproject.org/>.
Anderson, G., Creation of Constituent Units in Federal Systems, Center for

Constitutional Transitions Law Working Paper, 2014
—, Federalism: An Introduction (Oxford: Oxford University Press, 2008)
Anderson, G. and Choudhry, S., ‘Constitutional Transitions and Territorial
Cleavages’, International IDEA Working Paper, June 2015, <http://
www.idea.int/publications/catalogue/constitutional-transitions-and-
territorial-cleavages>, accessed 28 July 2017
K. G. Banting and S. Corbett (eds), Health Policy and Federalism: A Comparative

Perspective on Multi-Level Governance (Kingston and Montreal: McGill
Queens University Press, 2002)
Bodnar, C. D., ‘Practice and Principle: Asymmetrical Federalism in Canada’,
Paper prepared for the Annual Meeting of the Canadian Political Science
Association, Dalhousie University, Halifax, Canada, 2003
Burgess, M., Comparative Federalism: Theory and Practice (London: Routledge,

2006)
References
Commonwealth Local Government Forum, Commonwealth Local Government

Handbook 2013/14 (London: Commonwealth Local Government Forum,
2014)
Elazar, D. J., Exploring Federalism (Tuscaloosa, AL: University of Alabama Press,

1987)
Filippov, M. and Shvetsova, O., ‘Federalism, Democracy and Decentralisation’,
in A. Benz and J. Broschek (eds), Federal Dynamics: Continuity, Change, and
the Varieties of Federalism (Oxford: Oxford University Press 2013)
Y. Ghai and S. Woodman (eds), Practising Self-Government: A Comparative Study

of Autonomous Regions (Cambridge: Cambridge University Press, 2013)
Irving, H., Gender and the Constitution: Equity and Agency in Comparative
Constitutional Design (Cambridge: Cambridge University Press, 2008)
John Paul II, Centesimus Annus [Encyclical Letter on the Hundredth Anniversary
of Rerum Novarum], 1991, <http://w2.vatican.va/content/john-paul-ii/en/
encyclicals/documents/hf_jp-ii_enc_01051991_centesimus-annus.html>,
accessed 28 July 2017
D. Karmis and W. Norman (eds), Theories of Federalism: A Reader (Basingstoke:

Palgrave MacMillan, 2005)
Putnam, R., Making Democracy Work: Civic Traditions in Modern Italy

(Princeton, NJ: Princeton University Press, 1994)

Federalism
Annex
About the author

Elliot Bulmer is a Programme Officer with International IDEA’s Constitution-
Building Processes Programme. He holds a PhD from the University of Glasgow
and an MA from the University of Edinburgh. He is the editor of International
IDEA’s Constitution-Building Primer series and specializes in comparative
approaches to constitutional and institutional design.
About International IDEA

The International Institute for Democracy and Electoral Assistance (International
IDEA) is an intergovernmental organization with a mission to support sustainable
democracy worldwide by providing comparative knowledge, assisting in
democratic reform, and influencing policies and politics.
Based in Stockholm, Sweden, it has offices in Africa, the Asia-Pacific, Europe,
and Latin America and the Caribbean. International IDEA is a Permanent
Observer to the United Nations.
<http://www.idea.int>
Annex
About this series

An ongoing series, International IDEA’s Constitution-Building Primers aim to
explain complex constitutional issues in a quick and easy way.
1. What is a Constitution? Principles and Concepts*
2. Bicameralism^
3. Direct Democracy*
4. Judicial Appointments*
5. Judicial Tenure, Removal, Immunity and Accountability
6. Non-Executive Presidents in Parliamentary Democracies*^
7. Constitutional Monarchs in Parliamentary Democracies^
8. Religion–State Relations^
9. Social and Economic Rights^
10. Constitutional Amendment Procedures
11. Limitation Clauses^
12. Federalism^*
13. Local Democracy^
14. Presidential Veto Powers^
15. Presidential Legislative Powers
16. Dissolution of Parliament
17. Government Formation and Removal Mechanisms
18. Emergency Powers
19. Fourth-Branch Institutions
20. Constitutional Recognition of Political Parties
^ Also available in Arabic

* Also available in Myanmar
Download the Primers from our website: <http://www.idea.int/publications>.

An updated list of Primers is available at <http://constitutionnet.org/primers>.

International IDEA’s Constitution-Building Primers are designed to assist
in-country constitution-building or constitutional-reform processes by
helping citizens, political parties, civil society organizations, public officials
and members of constituent assemblies make wise constitutional choices.
They also provide guidance for staff of intergovernmental organizations
and other external actors working to provide well-informed, context-
relevant support to local decision-makers.
Each Primer is written as an introduction for non-specialist readers, and as
a convenient aide-memoire for those with prior knowledge of, or experience
with, constitution-building. Arranged thematically around the practical
choices faced by constitution-builders, the Primers aim to explain complex
constitutional issues in a quick and easy way.
International Institute for Democracy and Electoral Assistance

(International IDEA)
Strömsborg, SE-103 34 Stockholm, Sweden
Telephone: +46 8 698 37 00
Email: publications@idea.int
Website: www.idea.int ISBN: 978-91-7671-117-0

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Federalism

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First published in 2015 by International IDEA

International IDEA publications are independent of specific national or political interests.

Cover design: International IDEA

Advantages and risks ................................................................................................ 3

2. What is the issue?................................................................................................... 4

3. Advantages and disadvantages of federalism..................................................... 6

The rationale for federalism...................................................................................... 6

4. Distribution of powers .......................................................................................... 13

Distribution of legislative powers ........................................................................... 13

Symmetry and asymmetry ...................................................................................... 21

6. The boundaries of constituent units................................................................... 24

7. Institutions of government within constituent units......................................... 27

Subnational constitutions and institutional structures ............................................ 27

8. Fiscal federalism ................................................................................................... 30

Tax collection and revenue sharing......................................................................... 30

9. Federalism and the constitution as a whole ...................................................... 33

Constitutional supremacy and constitutional amendment rules.............................. 33

10. Possible alternatives to federalism................................................................... 39

Other forms of macro-decentralization (quasi-federalism) ...................................... 39

11. Decision-making questions................................................................................ 48

About the author.................................................................................................... 52

Federalism is a constitutional mechanism for dividing power between different

Advantages and risks

Federalism is a means of ensuring peace, stability and mutual accommodation in

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2. What is the issue?

Federalism is a system of government that establishes a constitutionally specified

Figure 2.1. Federalism as unity in diversity

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The rationale for federalism

Federalism is offered as an institutional solution to the problems associated with

Coming together and holding together

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Box 3.1. A note on terminology

Other potential advantages of federalism

. . . successful federalism requires all of its benefits: well functioning

The power-sharing base is broadened

Innovative and pragmatic approaches to policy development are encouraged

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The burden on central authorities is reduced

Resources are shared across geographical space

Capacities and democratic responsibilities are developed

Potential disadvantages of federalism

Additional operating costs

Increasing regional discrepancies of wealth, resources and outcomes

Harmful economic competition between subnational units

Potential exclusion of minorities

The strengthening of local elites who misuse power

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to employment, land or other goods), the greatest challenge is to ensure that

Ineffective governance because of a lack of capacity

Instability and threats to democracy

To address the substance (rather than the form) of federalism, it is necessary to

Distribution of legislative powers

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In general, enumeration of concurrent powers represents a more integrated and

federations, residual powers are typically retained by the constituent states or

Transfer of legislative competences