Managing Interdependencies in Federal Systems

Intergovernmental Councils and the Making of Public Policy

Johanna Schnabel

• Publisher: Palgrave Macmillan
• Year: 2020
• Print ISBN:
  9783030354602
• eBook ISBN:
  9783030354619
• Topic: Politics & International Relations
• Subtopic: Comparative Politics
• Index: Politics & International Relations

Intergovernmental councils have emerged as the main structures through which the governments of a federation coordinate public policy making. In a globalized and complex world, federal actors are increasingly interdependent. This mutual dependence in the delivery of public services has important implications for the stability of a federal system: policy problems concerning more than one government can destabilize a federation, unless governments coordinate their policies. This book argues that intergovernmental councils enhance federal stability by incentivizing governments to coordinate, which makes them a federal safeguard. By comparing reforms of fiscal and education policy in Australia, Canada, Germany, and Switzerland, this book shows that councils' effectiveness as one of federalism's safeguards depends on their institutional design and the interplay with other political institutions and mechanisms. Federal stability is maintained if councils process contentious policy problems,are highly institutionalized, are not dominated by the federal government, and are embedded in a political system that facilitates intergovernmental compromising and consensus-building.

© The Author(s) 2020

J. SchnabelManaging Interdependencies in Federal SystemsComparative Territorial Politicshttps://doi.org/10.1007/978-3-030-35461-9_1

Begin Abstract

1. The Purpose of Intergovernmental Councils

Johanna Schnabel¹

(1)

School of Politics and International Relations, University of Kent, Canterbury, UK

Johanna Schnabel

Email: [email protected]

Keywords

FederalismMultilevel governancePublic policyComparative politicsIntergovernmental relationsSafeguards

End Abstract

In federal states, power is distributed between two levels of government (Elazar, 1987; Hueglin & Fenna, 2015; Riker, 1964; Watts, 2008). Each government has the right to collect its own taxes and to provide public services in specific areas (Watts, 2008). Nevertheless, this division of power is never neat, and governments are mutually dependent in many regards. Because responsibilities overlap and since many public issues cut across several policy areas, most policy problems concern several governments of a federation at the same time. Though being typically assigned to the constituent units, education, for example, has become relevant to the economic competitiveness of a federation, for which the federal government is generally responsible. These interdependencies have increased in the course of the twentieth century and they are often unavoidable (Watts, 2008, p. 122).

Policy problems that touch upon the responsibilities of several governments in a federation not only pose a challenge for the efficient delivery of public services, they also affect a federal system’s stability. One of the fundamental features of federalism is that changes to the distribution of power require the consent of both levels of government (Watts, 2008, p. 9). Governments’ autonomy builds on the division of authority and discretion on which federalism relies. Each government enjoys genuine powers that are not delegated from one government to another. Governments are only accountable to their electorate—from which they gain their legitimacy—rather than to each other.¹ Powers can therefore not be withdrawn unilaterally by another level of government—which is why they must jointly agree on the way power is distributed among them (Elazar, 1987; Riker, 1964).

Unilateral policy solutions in situations in which governments are mutually dependent, however, may limit the other governments’ autonomy, so that they lose power without giving their consent. Rating agencies, for instance, assign individual ratings in reference to ratings of other governments of the federation, especially the federal government’s (Eyraud & Gomez Sirera, 2015; Inman, 1996). If a government refuses to consolidate its budget, other governments may therefore not be able to fully access the credit markets, which limits their discretion to borrow to finance their policies (Braun, Ruiz-Palmero, & Schnabel, 2017). Yet, because they seek to maximize their benefits and minimize the costs, governments face incentives to enact policy solutions unilaterally (Bednar, 2009). A prominent example of such behavior is the fiscal indiscipline of the constituent units (Braun et al., 2017; Rodden, Eskeland, & Litvack, 2003). Constituent governments that expect to be bailed out by the federal government, should their solvency be at risk, are likely to run deficits without considering the implications their overborrowing has on the financial situation of the federation as a whole since they do not have to internalize the costs of a fiscal crisis. To enforce fiscal discipline and avoid bailouts, the federal government, in turn, might impose a fiscal rule on the constituent units even against their will. Another example of unilateral policy making is the decision of Canada’s federal government to fund research through the Canada Research Chair program that required the provinces to provide the necessary infrastructure to the holders of a Canada Research Chair at the universities they run. The provinces had no say in the establishment of the program.

Unilateral solutions to policy problems cutting across jurisdictions lead to changes in the distribution of power because they shift authority and discretion from one level to another without the consent of all governments—though the degree of such disruptive unilateralism may vary. Policy problems affecting more than one government (especially when they are salient and politically loaded) thus destabilize a federation—unless governments meet to develop joint policy solutions. Collaborative solutions can alter the distribution of power, but these changes are agreed upon by all federal actors. When governments jointly develop, adopt, and implement policy solutions to problems affecting all of them, they avoid the unwanted amendments of the distribution of power that may lead to federal instability.

As a consequence of their interdependent relationship, governments have indeed come to interact. Intergovernmental relations, that is the processes and institutions through which the governments of a federation coordinate public policy making, have become the “workhorse of any federal system” (Cameron, 2001, p. 121). Whereas many intergovernmental interactions occur informally, intergovernmental councils have been established in federations across the world, especially since the second half of the twentieth century, to give intergovernmental relations a formal structure. Most intergovernmental councils have been created by a political decision of the federal government and/or the constituent units. Some, however, even owe their existence to the federal constitution or the passage of legislation mandating their creation.

Intergovernmental councils are more or less regular meetings of the different governments of a federation. At these meetings, governments establish policy solutions to problems they are all confronted with (Behnke & Mueller, 2017; Cameron, 2001; Watts, 2003). Intergovernmental councils comprise high-level politicians such as prime ministers or cabinet ministers that “share information, discuss common problems, contemplate co-ordinated or even joint action and where appropriate establish joint bodies or agencies” (Watts, 2003, p. 4). Meetings of (senior) officials can also be part of an intergovernmental council in which case they serve the purpose of preparing or implementing decisions of a council’s plenary assembly, which consists of politicians.² Different types of intergovernmental councils exist (Bolleyer, 2009, pp. 17, 69–70; see also Cameron, 2001). Based on membership, one can distinguish between vertical councils comprising the federal government and the constituent units, and horizontal councils in which the federal government does not participate, as well as between national, multilateral, regional, and bilateral councils depending on the number of constituent units participating.³ Furthermore, while policy-specific councils focus on a specific area and consist of ministers, generalist councils discuss cross-sectoral policy issues and generally involve prime ministers or governors.

The literature on intergovernmental relations has long acknowledged that these councils boost federations’ policy making capacity (e.g., Bolleyer, 2009; Cameron & Simeon, 2002; León & Ferrín Pereira, 2011; Poirier & Saunders, 2015b; Simeon, 2006; Watts, 2003). This book argues that they fulfill yet another purpose. By avoiding that governments solve policy problems unilaterally when they concern several federal actors, intergovernmental councils can enhance a federal system’s stability. Therefore, intergovernmental councils constitute a safeguard of federalism. They are one of the political institutions that maintain federalism because they incentivize the governments of a federation to respect each other’s autonomy (Bednar, 2009). Federal safeguards prevent the federal government from encroaching on constituent units’ responsibilities and from shifting costs to them, and discourage the constituent units to shirk on their duties or shift burden on their part (see also Behnke & Mueller, 2017). As Bednar (2009) has argued, federalism is sustained by political institutions. Informal coordination processes are, therefore, not enough to ensure that governments coordinate public policy making in such a way that respects the federal balance of power. Intergovernmental councils, as the formal structures of intergovernmental relations, however, are able to shape governments’ decisions in this way. Put differently, only institutions can create the commitment of political actors that is necessary to uphold the federa...

Table of contents

• Cover
• Front Matter
• 1. The Purpose of Intergovernmental Councils
• 2. The Dynamic Stability of Federal Systems
• 3. The Intergovernmental Safeguard: Principles of Design
• 4. Making Fiscal Policy
• 5. Reforming Education
• 6. The Intergovernmental Safeguard: Taking Stock
• 7. Policy Making under Federal Influence
• Back Matter