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Gisela Färber (Hrsg.) Gisela Färber (Hrsg.) Governing from the Center: The Influence of the Federal/Central Government on Subnational Governments Papers Presented at the Conference of the IACFS September 29 – October 1, 2011 in Speyer Speyerer Forschungsberichte 269 Gisela Färber (Hrsg.) GOVERNING FROM THE CENTER: THE INFLUENCE OF THE FEDERAL/CENTRAL GOVERNMENT ON SUBNATIONAL GOVERNMENTS Papers Presented at the Conference of the IACFS September 29 – October 1, 2011 in Speyer DEUTSCHES FORSCHUNGSINSTITUT FÜR ÖFFENTLICHE VERWALTUNG SPEYER 2012 Gefördert durch die Bundesrepublik Deutschland Bibliografische Information der Deutschen Bibliothek Die Deutsche Bibliothek verzeichnet diese Publikation in der Deutschen Nationalbiblio- grafie; detaillierte bibliografische Daten sind im Internet über http://dnb.ddb.de abrufbar. (Speyerer Forschungsberichte ; 269) ISBN 978-3-941738-07-2 Herstellung: DEUTSCHES FORSCHUNGSINSTITUT FÜR ÖFFENTLICHE VERWALTUNG SPEYER Umschlagentwurf: © 8/97 TRIFTY ART Grafik Design • 67550 Worms • Hauptstr. 32 • Tel.: 0 62 41/95 15 38 V Preface In theory, federal states provide for a clear division of competences among the orders (or levels) of government. Federal constitutions determine the dis- tribution of the various tasks as well as the most important institutions and the rules of cooperation among them. Both vertical and horizontal divisions of powers limit the overall power of the state. From the economic point of view, federal constitutions safeguard the efficiency of the supply of public goods by establishing institutionally preset conditions for making political decisions when regional preferences differ and by instituting a horizontal competition among jurisdictions. In practice, however, federal arrangements in all countries depart from this clear separation of competences, with pervasive formal and informal coopera- tion in decision-making processes and in the production of public goods. The Federation or “central state” in particular routinely becomes involved in the provision of public goods by subnational governments, affecting their policy initiatives through a variety of federal institutions, measures, or processes. This may lead to a vertical imbalance within the federal system, because the subnational units do not have a similar influence on the policy initiatives of the Federation. The vertical influences tend to be rather indirect – for exam- ple, in the field of general economic policy affecting price level and inflation rate, interest rates, wages and the base of revenues and expenditures of the decentralised jurisdictions. They may also involve direct influences or even interventions when specific responsibilities are transferred and when the Fed- eration regulates in detail the conditions for the supply of those public goods that fall within the responsibility of states, provinces, and communities. In some federal states – for example, in Canada – interventions by the Federa- tion may affect local governments, overleaping the provincial/state level, with the Federation oftentimes using financial transfers to accomplish this. But in Germany, for example, the federal Constitution was amended to restrict such interventions by the Federation. Some federal constitutions expressly introduce contain vertical interven- tions into their basic construction. One may think, for example, of executive federalism under which the powers of legislation and execution are systemati- cally separated. These constitutional arrangements do not necessarily limit the advantages of the federal division of powers. Shifts in competencies that may be necessary as a result of changes in the economic and social environment are simpler to undertake than under other federal constitutions. But there is VI also an inherent danger of over-centralization depending on how the “vertical channels” between the orders of government are understood. Likewise important are unitary states that are involved in the process of regionalization or devolution. Here the long-standing vertical administrative structures remain alongside the new autonomous regional competences. Ad- ministrative tasks that are imposed by the central state “compete” with the re- gions’ own administrative and financial responsibilities. The sub-national or- ders here are hybrids, combining imposed responsibilities and autonomous re- sponsibilities in a single set of regional and local institutions. There has been little systematic research into the forms and extent of ver- tical “interventions” in federal systems, into the reasons for such interven- tions, their legal base, the institutional patterns they assume, and their positive and negative consequences. The in this research report presented papers of the IACFS conference in Speyer, Germany, from September 29 to October 1, 2011 aim to fill the gap of mainly empirical examination of the topic, both country-specific and comparative. The conference papers explore the direct and indirect influences of these vertical interventions and consider how such actions of the Federation affect the way in which subnational governments, regional and local, undertake their own responsibilities. The contributions come from various academic disci- plines, including constitutional law, political science, administrative science, and public finance/fiscal federalism. They cover various countries, some of them ‘real’ federal states, other unitary countries with a however considerable degree of decentralisation of power under the label of regionalisation and devolution. They deal with the political institutions and legal rules as well as with the intergovernmental financial relations and therefore provide a very broad insight into the vertical dimension of multi-level ‘game of political powers’. I owe many thanks to all the contributors of the conference, especially to those who helped to intensify the diffusion and the understanding of the very complex formal and informal arrangements in federal and regionalised multi- level states. I also thank Dr. Jürgen Kühl, Minister of Finance of Rhineland- Palatinate, and Dr. Günter Hoos, director of the state vineyard in Neustadt- Mußbach, for the inspiring evening of the wine tasting. And last but not least, I owe infinite gratitude to my secretary Mareke Schröder who was the ener- getic and stable centre of the organisational part of the conference, and now provided the format and layout of this research report. Speyer, July 2012 Gisela Färber VII Contents Michael Burgess and Frédéric Lépine What is the Federal Centre? .................................................................. 1 Mercè Corretja Torrens Cooperation in the Public Administration as a Mechanism of Centralisation in Spain ...................................................................... 21 Stelio Mangiameli Governing from the centre: the influence of the federal/central government on subnational governments. The Italian case. General report ........................................................................................ 47 John Kincaid State Challenges to Coercive Federalism in the United States .............. 65 Christian Leuprecht Governing from the Centre – Resisting from the Periphery: Constitutional, Institutional and Societal Conditions and Drivers of Federal Encroachment on the Autonomy of Constituent Units ........ 75 Hans-Peter Schneider The Berlin Republic – Germany: A Federal State without Federalists .............................................................................................. 105 Yonatan Tesfaye Fessha Governing from the centre: Federal-state relations in Ethiopia ............ 115 Nico Steytler, Jaap de Visser and Robert Williams Unfunded Mandates: Directing Subnational Governments ................... 135 Miguel Angel Asensio Constitution and Fiscal Constitution. Central Government Influence on the Federal System in Argentina ...................................... 157 VIII Nicolas Schmitt The Role of the Political Culture of Non-central Government for the vertical (lack of) influence of the Federation and how it affects cantons and communes in Switzerland ................................... 175 Giancarlo Pola Italy: Financial Implications of the Transition to Fiscal Federalism. Fears and Hopes .................................................................................... 201 Enrico Buglione Central Government Influence on Sub-Central Governments: The Case of Italy ................................................................................... 215 Index of Authors .................................................................................... 231 1 What is the Federal Centre? Michael Burgess and Frédéric Lépine 1. Introduction One of the most important questions often overlooked in scholarly discourses on federalism and federation is that of the so-called “federal centre”. Given the way that this subject is the victim of semantic confusion, it is hardly sur- prising if we tend to be somewhat complacent about its nature, purpose and meaning. Indeed, this is why we blithely assume that it is self-evident, requir- ing little explanation and no serious investigation. In general terms this over- sight is probably because it is regarded at the outset as synonymous with the national or central government of the federation. The unconscious assump- tion is that every state, whether federal or non-federal, has a “centre”, usually conceived as a singular political authority, which is usually legitimated by a written constitution and whose principal task is to govern, in different modes,
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