Different Forms of Decentralization

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Different Forms of Decentralization

• Workshop for the Members of the Independent
  Federal Constitutional Commission of Somalia

Dr. Markus Boeckenfoerde, Verena Wiesner, 7 12
July 2007
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Introduction Different Forms of Decentralization
a) Broad concept
Confederation Federal System Decentralize
d Unitary System
Sub Unit
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Introduction Different Forms of Decentralization
b) (Administrative) Decentralization
Centralized Unitary State
Decentralized Unitary State
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Introduction Legal Characteristics of a
Confederation
Confederal System (Representation of States)
In a confederation, sovereignity rests with the
States. The center only exercises authority
delegated by them.
In a confederation, States not people are
represented. Hence, center decisions only bind
the states, but not the citizens directly.
The center lacks an independent fiscal or
electoral base.
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Introduction Legal Characteristics of a Federal
System
Federal System (Representation of people)
Two orders of government level, each in direct
contact with its citizens.
Both central government (the federal level) and
regional government (the state level) possess a
range of powers which the other cannot encroach
upon.
The sub-national level is represented within
federal decision-making institutions.
An arbitration mechanism is set in place to
resolve intergovernmental disputes.
The responsibilities and powers of each level of
government are defined in a codified or written
constitution that neither level can alter
unilaterally.
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Introduction Legal Characteristics of a Unitary
Decentralized System
Unitary Decentralized System
Forms
Delegation
Deconcentration
Devolution (might have some characteristics of a
federal system but only at the will of the
national level).
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Introduction Genesis of Federal Systems
a) Coming together federalism
Confederal System Federal
System (Representation of States) (Representatio
n of people)

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Introduction Genesis of Federal Systems
b) Holding together federalism
State
State
Sub Unit
Sub Unit  
People People
People People
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Dynamics in the organizational Form of States

• Example 1 USA
• - 1776 Confederation
• - 1787 Federation
• - 1791 Bill of Rights added to Constitution
• - 1819 SC judgement McCulloch v. Maryland
• - 1824 SC judgement Gibbons v. Ogden
• - 1861-1865 American Civil War

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• 1880s Revival of dual sovereignty
• 1933-1939 Roosevelt administration introduced
  "New Deal
• 1960s Johnson administration introduced "Great
  Society
• 1980s Reagan administration moved to define a
  "New Federalism"
• 1990s U.S. Congress enacts legislation shifting
  competences to states

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Dynamics in the development of a federal system
over time (USA)
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Dynamics in the organizational Form of States

• Example 2 Ethiopia/Eritrea
• 1936- 1951 Italian and British colonial rule
• 1952 1962 Federation (autonomous govt for
  Eritrea)
• 1962 Haile Selassie dissolved the federation
  Eritrea was declared a province.
• 1991 Military victory of Eritrean rebel
  movement.
• 1993 Secession of Eritrea after referendum.
• 1994 Federal Constitution for Ethiopia.
• 1993 1997 Constitutional process in Eritrea.

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Asymmetric Federalism

• Federalism
• Purpose vertical separation of powers
• Status of sub-units equal
• Territorial Autonomy
• Purpose protection and self-determination of a
  minority
• Status of sub-units Special rights for sub-unit
  of minority

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Asymmetric Federalism

• Mixture of Federalism and Autonomy Asymmetric
  Federalism

National level of government
Special /more competences
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Asymmetric Federalism

• Examples of asymmetric federal systems Belgium,
  Malaysia, Spain, Sudan
• Chart Sudan

National Government of Sudan (Government of
National Unity)
Government of Southern Sudan
10 states
13 states
2 states
Local administration (in itself organized on up
to three levels)
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Asymmetric Federalism

• Even more common asymetrically decentralized
  unitary States
• Examples France (Corsica) Denmark (Greenland)
  Tanzania (Zanzibar) United Kingdom (Northern
  Ireland, Scotland, Wales)

Unitary State
Autonomous region
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The Separation of Powers

• Horizontal separation of powers
• Vertical separation of powers

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The Separation of Powers

• The separation of powers in a federal State
• Example Germany

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The horizontal separation of powers The
Legislature

• Functions
• Representation of the population
• The making of laws
• Election and / or control of the cabinet
• Approval of the budget

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The horizontal separation of powers The
Legislature

• Potential interferences with the judiciary?
• Potential interferences with the executive?

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The horizontal separation of powers The Executive

• Option 1 Presidential system
• Name President
• Elected directly by the people, not by the
  legislature
• Functions often combines chief executive and
  head of state in one person
• Legitimacy strong, direct
• Removal difficult (impeachment process)

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The horizontal separation of powers The Executive

• Option 2 Parliamentary system
• Name Prime minister or chancellor
• Elected by parliament
• Function only head executive
• Legitimacy indirect, through parliament
• Removal through parliament

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The horizontal separation of powers The Executive

• Composition of the cabinet/the Council of
  Ministers
• Option 1 along party lines
• Examples India, Germany, USA
• Option 2 federally/regionally balanced
• Example Switzerland

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The horizontal separation of powers The Judiciary

• Role of the judiciary
• Interpretation of the law and application to the
  facts
• Independence
• Institutional and Individual Independence

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Electoral SystemsPossible Goals

• Representation
• Proportionality of seats and votes
• Accountability to constituents
• Stable and efficient governments
• Victory of the candidate most acceptable to all
• Strong Legislative Opposition and Oversight
• Incentives for Conciliation

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Electoral SystemsPossible Goals

• Minority Office Holding
• International standards
• Design according to the ICSS
• Easy administration of the elections
• Low cost of the election
• Making it easy to vote
• Encouragement of strong party system

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The Electoral System Families Figure by
International IDEA, Handbook on Electoral System
Design
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Electoral Systems First-Past-The-Post-System
(FPTP)
Voter
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Electoral SystemsAlternative Vote
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Electoral SystemsAlternative Vote
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Electoral SystemsAlternative Vote
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Electoral SystemsTwo-Round-System
First round
Second round
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Electoral SystemsList Proportional Representation

• Example Parliament consists of 100 seats, each
  political party presents a list of up to 100
  candidates
• Results the first 8 candidates on the list of
  Party A, the first 32 candidates on the list of
  Party B, etc. are elected to Parliament. All five
  parties are represented in Parliament.

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Electoral SystemsPros and Cons of Majority
Systems

• Advantages
• Clear results
• Stable governments
• Easy to handle
• Link betw MP and constituency
• Transparent

• Disadvantages
• Excludes minorities
• Disadvantages smaller parties
• Wasted votes
• Danger of vote splitting

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Electoral SystemsPros and Cons of Proportional
Systems

• Advantages
• Fair and representative results
• More inclusive
• Enhances consensus building/coalitions
• Strong political parties
• Representation of minorities/women

• Disadvantages
• Voter cannot vote for individual candidate
• Small parties potentially too powerful
• Extremist parties have chance

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Models of Democracy

• Majoritarian
• Majoritarian election laws
• Mostly a two party system
• Majority rule as most important rule of decision
  making

• Consociational or Consensual
• Often federal/decentralized systems
• Often other, rather independent institutions
• Multi-party system based on proportional
  representation
• Compromise and inclusion as main decision making
  rule

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Vertical Separation of Powers The Legislature

• Division of legislative competences between
  levels in the Constitution
• Exclusive Powers
• Concurrent Powers
• Framework Competences
• Residual Powers

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Vertical Separation of PowersThe Executive

• Which level is in charge of implementing the
  laws?
• Two concepts possible
• Dual Federalism
• Executive Federalism

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Vertical Separation of PowersJudiciary

• Court Systems in Federal States
• Option 1 Separated Model
• Option 2 Integrated Model

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Court Systems in Federal States
The Separated Model
applying national law only
applying state law only
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FEDERAL LEVEL
STATE
LEVEL ___________________________________
__________________________________________________
___________________
LOCAL LEVEL
The integrated model
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The Constitutional Court and its role in federal
disputes
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Participation of States at the National Level
National Legislative Power
National Executive Power
National Judicial Power
Second Chamber (represen-tation of States)
First Chamber (represen-tation of people)
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Composition of the 2nd Chamber
Forms of representation
2nd chamber Equal representation
2nd chamber Weighted representation
State
State
State
State
State
State
State
State
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Composition of the 2nd Chamber
Forms of representation
House of Federations (2nd chamber, Ethiopia)
State
State
State
NNP
NNP
NNP
NNP
NNP
NNP
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Comparative Chart on the Composition of 2nd
Chambers
Weighted states representation
Strict states representation
Canada
Switzerland
India
Ethiopia
Germany
USA, Nigeria, South Africa, Sudan, Mexico, Russia
Austria
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Different options of selecting the second chamber
(1) (2)
(3) (4)
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Comparative Chart on the Selection of 2nd
Chambers
Appointed by national government
Directly elected by the people of a state
Appointed / delegated by state government
Elected by state parliament
South Africa, Russia, India
Spain
Malaysia
Sudan, Austria, Ethiopia
USA, Switzerland, Mexico, Nigeria, Italy,
Australia, etc.
Germany
Canada
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Comparative Chart on the Legislative Involvement
of 2nd Chambers (excl. Const. Amendments)
Never involved
Always involved
Occasionally involved
South Africa, Nigeria, Germany, USA, Switzerland,
Mexico, Italy, Australia, Malaysia, Switzerland,
etc.
Sudan (INC)
Ethiopia
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Veto powers of 2nd Chambers
Equal participation (absolute veto)
Weighted participation (suspensive veto)
always USA, Italy, Australia, Canada, Nigeria,
Switzerland
if state interests are effected Germany, South
Africa
Austria
Spain, Malaysia
Russia
joint sitting India
Sudan
Exclusive legislative competence of 2nd Chamber
in specific areas Sudan, Germany
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The Wide Range of Federal Systems
Element of State Option to Representation Sw
itzerland Austria recall power
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Fiscal Federalism Structure

• The financial relationships between the different
  levels of government

National government
State A
State B
State C
State D
State E
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Fiscal FederalismQuestions to Answer

• Which level has to pay for the exercise of
  specific state functions?
• Which level disposes of which sources of income?
• Are there any transfers or grants from the
  federal level to the states?
• Are there any transfers between states?
• Is there a control of sub-national government
  borrowing?

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Fiscal FederalismGoals

• Efficient allocation of resources
• Equity
• Stabilization
• Economic growth
• Regional balance
• National integrity
• Political stability

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Fiscal FederalismThe assignment of expenditure
responsibility

• Criteria
• Link to beneficiaries of the service
• Efficiency of programme size
• Regional preferences
• Equity
• Economic stability

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Fiscal FederalismThe assignment of revenue
raising responsibility

• Criteria for distributing revenue sources
• Expenditure responsibilities of sub-levels
• Local taxes for local services
• Avoidance of tax-induced movements
• Stability for sub-level governments
• Equal distribution of national wealth

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Fiscal Federalism Intergovernmental transfers

• Reasons for horizontal imbalances
• Different capacities of the sub-levels to raise
  revenues.
• Different costs of services to be provided
  (expenditure responsibilities).

State A
State B
State C
State D




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Fiscal Federalism Intergovernmental transfers

• Reasons for vertical imbalances
• Revenue responsibilities lie with national level
  while expenditure responsibilities are with sub-
  level

National government




State A
State B
State C



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Fiscal Federalism Intergovernmental transfers

• Revenue sharing arrangements
• Option 1 sharing on tax-by-tax-basis
• Example 10 of the Personal Income Tax
  (collected by the national government) are passed
  on to the states ( 15 of the corporation tax,
  )

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Fiscal Federalism Intergovernmental transfers

• Revenue sharing arrangements
• Option 2 revenue pool

State A
Income tax
State B
Customs duties
State C
National revenue pool
e.g. 35 to states
Corporation tax
State D
Stamp duty
State E
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Fiscal FederalismControl of sub-level borrowing

• Possible approaches
• Market discipline
• Cooperation betw. levels in debt control
• Rule-based control
• Administrative control (only in decentralized
  unitary States possible)