Disentangling Decentralization from Federalism | Malcolm Feeley
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Disentangling Decentralization from Federalism | Malcolm Feeley


Thanks so much for having me here. I come back almost every year to canoe the Green River from Green River to the
confluence and to spend a few happy days in Moab and drive down the
the Escalante grade and love it. In his book, comparing the United States and Canada,
written many years ago, the great political scientist and sociologist
Seymour Martin Lipset, said that he who knows one country knows none. And so I
have taken that to heart and so when when representative Ivory says where
do we go from hair I suggest we go abroad for a while and then return
back to the United States. And while he mentioned the green paper, we didn’t get one up here, but he mentioned the green paper, let me suggest this, this document
is filled with platitudes. Now platitudes can be true or platitudes can be false
but the function of a University, among other things, is to take platitudes and
to work through them to offer empirical evidence and tough-minded analysis to
see whether they hold up or not or ought to me to be abridged or altered or
shaped or modified or reinforced and asserted with greater confidence. So
that’s the spirit in which I want to begin my talk today. Now
federalism is a… is one of several structures by which a government can be
organized. It’s often compared with unitary systems but it can be it can be
compared with consociational systems and and still still others so corporative
structures as well. So you have so so so so federalism is a structure for
organizing government and its one among many. And I what would like us to do is keep in mind Lipset’s argument that if we know only one we don’t know any, perhaps and
say that it’s really important to look at more than one place so we can
distinguish the characteristics of the structure of federalism from the
characteristics and many other characteristics of a country that might
happen to be federal. The mountains and valleys the peaks the liberty loving
quality of its inhabitants of whether peasants on land or don’t own land and
the nature of the political parties, whether there’s separation of powers and
so on. All of those things come together and looking only at one country it’s
very difficult to identify out, extract out, what is inherent in the structure of
federalism from any of a variety, the same thing could be said of unitary
system, consociatioal, and so on. So that’s that’s that’s what I that’s what
I’m trying to do. So that the central question I would ask is, is it seems to
me the most obvious question, how much how much characteristics how many
features of a country are due to the structure of federalism as opposed to a
variety of other features of that country? It’s a really hard and
challenging question and nobody I know has satisfactorily answered
it. But let me suggest this, if one looks abroad one can begin to ask the question
if not answer it very satisfactorily. So what I have done, and what I’ll hear you…I’ll
sound very much like a professor just giving lots of sources and so on but
I’ll try to get the hit the highlights. There is a large literature among
students of comparative politics that compare different countries along a
variety of dimensions. One of those dimensions they compare air is unitary, that is a single central
authority and federal, that is a that is a least two or more or horizontal
structures of sovereignty or entrenched to constitutional benefits
or rights. And so, and so they can… another thing another thing they look at
is the degree to which a country is centralized or decentralized. Now one of
my points I’ll get to and hammer back, and hammer home, is that we often confuse
features that are better described as decentralisation as federalism. Indeed a
great many people confuse decentralization and federalism and
so I will I will go through this. But let me identify a couple of scholars, comparative politics scholars, that have that have spoken to this
issue, and not quite the way I want to so, I’m not wrenching their arguments out of
context but I’m extracting some, some observations make from their own work that goes along. One of those is John Gehring the teaches at
at Boston University and the other is Erik Wibbels, now at Duke, I’m sorry that
my colleague from Duke as Ernie has left, but look at those two for
a minute. Here is what here’s what John Gehring did. John Gehring took a large end
study, seventy countries, and they were not divided equally but they were a lot
there were a lot of unitary countries and there were a lot of federal
countries and, seventy around the world they were good countries, bad countries
all the countries that he can get… could readily get data on. And and he began to
examine their characteristics, their structural characteristics the antecedents to those structural characteristics of the point he could
and then what he thought were some of the consequences are some of this some
of the features of those countries. And he correlated with, among other things
whether countries where were unitary or whether they’re or whether they were federal. And here it… so he asked the question, one of the questions
was pretty direct. How ca a state best govern a diverse community? And in many federal countries there are pretty diverse, but in many maybe one of the
most diverse European countries at least was postwar, was the Netherlands and it was governed not
by not by a federal system but by consociationalism, and is probably one of the most peaceful countries and stable countries and certainly the most democratic
countries in Europe during during that period. So at any rate, he looks at he
looks at the he looks at the seventy countries and trying to find out trying
to find out what’s related with it. Now correlation is not causation and he’s
very careful with that. And I want to emphasize I am too. But nevertheless his
findings are interesting He reports that unitary systems, single structure
governments, with proportional representation, not the single-member
districts that we have, fare better than federal systems that in achieving a
whole host of things that we would regard as beneficial that are included
in the list of the Green Paper. One would be include, one would be inclusion one
would be a strong and responsive bureaucracy and the like. More
specifically he finds that what he calls, doesn’t call them unitary, he calls them
centripetal because not only are they unitary but they have proportional
representation and a variety of other things. So he says, he says the
centripetal unity governments perform more effectively than federal
or a centrifugal government on a variety of things. In particular
he looks at, looks at, several points. One is bureaucratic… bureaucratic quality, effectiveness efficiency the degree of corruption to
the extent that these can be measured. Another, another is achieving a tax
revenues. another is investment ratings, which countries have
high investment which have lower investment, trade openness, gross domestic product per capita per capita infant mortality, life
expectancy and illiteracy. So in all those dimensions unitary government
fare better than, than, federal systems. Now he picked these
various measures because he thought they were good indicators of either
government effectiveness in a variety of ways, or quality of life indicators. And
if you don’t like those indicators he has a great many more that he would
argue are so highly correlated with them that he didn’t need to deal with all of them. Now look, he recognizes the limits of his analysis. He acknowledges that
he didn’t… that the data he selected weren’t random the country’s
weren’t random you can’t generalize the whole you take countries as you get
them and so it’s pretty, pretty hard, pretty hard to generalize it. But still
so you can’t prove that this is the case but on the other hand for you might be
able to do is disproved certain things. That is, scientists never prove anything so much as they, they disapprove the alternatives. And so if you don’t find a
correlation between something there’s a good chance that you can’t find
correlation either if you do find correlation causation if you do find let me repeat it, if you,if you don’t
find correlation there’s not likely to be causation, if you do find correlation
there may or may not be causation, it’s a matter of inference to determine. But if
you can show there’s no correlation it’s a pretty good… you can rest assured that there’s no causation. So he has that more modest goal. Now his his colleague in this enterprise Erik Wibbels, at Boston, does a similar sort of thing using
slightly different data, the one uses World Trade Organization, the other uses the
International Monetary Fund data.So in his ongoing project, he too finds that,
that, that unitary systems fare better on a variety of dimensions than federal
systems do. A federal systems are less able than unitary systems to distribute
resources proportionally, another quote, a federal…a central
weaknesses of federal systems is that they’re very structures over represent minority interests and this in turn contributes to civil unrest and
political instability and so on and so on. So Wibbels does something very interesting he… he’s, all these guys are methodologists of the first order. They do
to… they both use multiple methods and multiple techniques. They do these big end
studies looking at fifty, seventy, eighty countries using a data that are provided
by IMF and so on, then they also take, they also do individual case studies, in-depth case studies, of a handful of countries, and his argument is the findings, their
findings, reinforce each other and so he’s moderately confident in in the
correlations that he, he finds. And in making certain inferences
about the benefits of unitary governments over federal systems. So then he asked the question, the obvious question, if federal
systems… if a unitary systems are consistently better on this variety of measures that most of us would think are important to measures is, why are federal
systems created in the first place? So he asks the antecedent question. And his conclusion is that federal systems are created when there are inequalities among different
regions, the elites will favor a federalism because this weakens majority rule in the central government. And if you read some of the anti-federalist papers I think, that’s kind of what they suggest. We don’t read the anti-federalist, we only read the federalist now, and so so this leads him to claim that central
governments with federal systems have, one of the reasons, they have poor outcomes on these many, many dimensions. Now there are a couple of other, there’re a couple of
other people whose work bears on this and I’ll mention them very briefly and then I’ll make the few concluding remarks and then shut up. Aaron Liphart is perhaps one of the
leading, the leading comparative politics scholars of the of
the late the late 20th century. He wrote… he tried to find out why a country,
his country, a country riven, riven with conflict, deep conflict, was was so
peaceful and stable and if not fully democratic, pretty democratic, and that
was that was the Netherlands. And he developed his argument that, that
consociational governments, governments governing through grand coalitions, that
that, that draw in minority parties or parties on the out, are more stable
than, than, than simple clear full-fledged majoritarian parties. And that led him
then to expand to look at democracies more generally. And he’s written two or
three books that that look at, look at 36 democracies, and they’re roughly divided
between unitary and and federal, federal countries. And he argues
again that the the big three things for him are are unitary systems with with
with parliamentary democracy and proportional representation. In a more
recent book just published with colleagues last year he compares, he
compares federal and unitary governments and then highlights, it’s a text book in
American politics, and he highlights, he highlights the United States in the middle
of 31 countries and he looks at, And he finds that something like this, that
by and large, there is as much difference within unitary structures as is within
federal structures, so you cannot attribute any of these measures of a
political stability, democratic participation, social benefits and so on to one type of system or another. If any, if anything the unitary systems come out, come out, come out still better.
Two other scholars I looked at. and I looked at them not so much talk about
unitary or, or federal systems, but to look at
something, a kissing cousin of federalism, which is decentralization. And
John Loughlin, now at Cambridge, has looked at, has looked at local and
regional finance in a host of European countries over the past 20 years and two
of these studies, one on Sweden and one on France are instructive. In Sweden he
finds that a huge portion of taxing and spending authority rests in the local
government it may even be higher than the United States, if you contrast local, county, and state with the federal government. And he finds
something of the same in France. But he finds that both taxing authority and
spending authority are lodged in the local governments to a
huge extent, I don’t have the figures here, but it’s, it’s, it’s as it compares
or exceeds the relations within the United States. And… but he goes on to then point out that this is not federalism or doesn’t appear to be federalism quite
yet, because the national government caps the taxing right and
mandates the, the areas, health care and education in particular,
that the tax expenditure has to be, has to be for and then, and then
mandates standards for how it is to be expended. So on one hand you have you
have you have a national government setting setting a goal a set of goals
and mission and then and then it delegates to the local government the
taxing and spending authority to carry out to carry out to carry out those
mandates. Something of the same exists in France. Now France has to be, for those,
for those of us that are federalism junkies, we would know that France has to
be considered one of the quintessential unitary centralized states. You remember de Gaulle, “France is me” you know, he signifies… and on the other hand France has two to three times, in absolute
numbers, the number of local governments, than the United States does. I have the
figures here, let me just pull them out, but… yes France has 37,000 communes, municipalities 37,000, it has 100 departments, it has 2,700 and growing, public corporations or special
districts as it were, and in contrast the United States only has, think of it, the United States is what three times the size four times the size of France, the United
States has only about 18,000 cities another 3,000 counties fifty states and
a number uncounted number of special districts. In fact the literature on
France that looks in detail at France says we’re falling apart, we’re a fragmented
country. Sounds familiar, sounds like, it sounds like complaints about the United
States. So the United… so France is more decentralized than the United States.
Many of these units, the communes, existed well before, before the centralization of France under Napoleon, and… some of them were
created after, precisely to create districts that were, that were, that were
amenable to control from from Paris. But these, these various regions, that
is the communes, the, the departments and the region’s also, and a special
districts, also have vast taxing and spending authority. And again they are
controled to some extent because the the tax, the tax ceilings are set by
by Paris the national government and the and the areas in which these
expenditures are to take place are specified by the government and the end of course
standards are set by the standards are set by the by the national government.
Some have called these, some have called this the development, in both
Sweden and France, the, the federalization of these countries, and clearly the
decentralization. But it’s not clear it’s the federalization because in every case,
in every case, the powers, the ultimate powers are entrenched in the constitution, are designated as the national government and they, these, these, these authorities
are delegated to the state and the local and regional districts and one… and
they note a pendulum effect. In in good times there’s decentralization,
in bad times there’s more, there’s more centralization. So it’s,
so it’s not clear, it’s not clear that this is the emergence of federalism. Now
if these scholars are correct, if they’re correct, that is all these
that, I should emphasize, in terms of the measures of liberty, freedom, that we
normally think of, the country’s scored highest on these scales tend to be the
northern European unitary countries so it’s not clear that liberty is something
distinctive to federal systems, But maybe it maybe related. I’m not suggesting it’s not but, but again, I want to emphasize that on these many different indicators
of quality of government and quality of life, there, there, there’s no great
distinction between unitary and and and and federal systems. So then the question, the question is, if this is right why are we so preoccupied with
federalism? Well I have two answers and they’re both pretty good. One is we are
Americans and we live in a federal system of sorts and we have to as a
member of the legislature he has to deal with the problem tomorrow and the day
after do that after tomorrow, and the courses…
the cases come to the courts and the courts have to answer. So it’s a
practical matter as, as, as citizens we’re found in the situation we are… you
know, God placed us in and we have to do the best we can and that’s living with
the conditions that surround us and at best marginally making a difference. So
that’s that’s a good reason enough to be good citizens to pay attention to to to
to the political conditions under which we live in. But I think there is another
reason as well and here I will blame the economists and whoever organized the
conference was what was… I don’t know whether you remiss or whether it was a good thing but there’re not… I didn’t notice any economists here, I noted my political science and law school colleagues around you, but the second one is this, I think, I think we
have been seduced by the economist. Because there are a lot of powerful
economic models that deal with federalism or a lot of economists have
taken some of the bromides that are captured here and elsewhere, and turn
them into economic models. And because they are powerful and because they are
parsimonious we like them and we think they’re right. But let me suggest almost
every one of these models is not a model of federalism, but is a model of
decentralization. And maybe at times even centralization let me just take a few and
I’ll pick them off quickly maybe we can elaborate. One fiscal federalism the name
is there, fiscal federalism is a theory that says we ought to have special
districts to deal with with the production of public goods. We want a
district that has fiscal equivalencies so that they the beneficiaries are the
ones that pay for the public good. That makes a lot of sense. If you have a, if you
have a water catchment area you want to water district, if you have a track… if
you ever have a problem with transportation you want to
transportation district, if you have air pollution you want to air pollution
district in which the beneficiaries of clean air are going
to be the ones that pay for the costs of correcting the problem. That makes sense. But this is not federalism at all. This is decentralization, this is central
government saying we have a problem and the problem involves Southern Utah and
Northern Arizona and so we’ll create a special district and we’ll make sure we
will deal with the with the coal pollution from the, from the, from the
from the energy plants down near the near the Grand Canyon or what have you.
Or you live in Washington… you live in New York City and you, and you
have the Metropolitan Transportation Authority that, that deals with transportation problems in New Jersey, New York, Connecticut and,
and Pennsylvania. The surrounding country, the surrounding
states. So you create, you create a district that, the port authority that will
deal with it. That makes a lot of sense. This is not federalism this is, this is
central administrators saying we’ve got a problem and so we’re going to create a
special problem. But it’s called fiscal federalism, now I’ve been lamenting this misnomer a long time until I came across an article by the dean of the school of fiscal
federalism Wally Oats, who says, oops, we used the
wrong name, this isn’t really federalism in the way the political scientists or
constitutional lawyers use it. This is, this is decentralization, of course, but
we’re stuck with the name we used, just like libertarians are now stuck is being
called conservatives and that sort of thing that you’re familiar with. So fiscal
federalism is one problem. Let me identify a couple of others. There are a variety of people, and I’m sorry that Mi… Michael Greaves, not here because he’s
one of one of them that talks about market enhancing federalism. And devices that,
devices… institutional arrangements that enhance markets and you got a little
bit of that this morning. this is not federalism. Federalism is a historic compromise
between various part, parties in which they agree to share power. It’s an
economist talking about a political scientist adopting an economist model. Economist talk about
the firm wanting to maximize this. Economists are always identifying the
purposes of an organization or person, we want to make maximize our interest. In
this case, in this case Michael and others have asserted market enhancing
maximization and they attributed it to federalism. Federalism is a division of
power, and there could be all sorts of reasons for the division of power, and it
would be a happy coincidence if one of them is doing it. Indeed the people that use market
enhancing federalism almost all come up with examples that are not federal but
are instances of a central government creating, creating a central bank,
creating a limited government and guaranteeing property rights. Well a
central government that guarantees a central bank and limited government is not
federal. It could be the British parliamentary system, as indeed one of
the examples comes from. So I could go through the same thing I could talk
about, I could talk about, I can talk about competitive federalism a variation
of that, I could talk I could talk about liberty enhancing federalism, I could
talk about experiment inducing federalism. Each of those metaphors, each
of these adjectives, if taken seriously, implies a clear objective goal, That is part and parcel of the term federalism, that may or may not be there. Since
federalism is basically a deal in which power is split and the reason it
is split is because no single party could dominate the others and they
agreed the compromise for what would would satisfy them all, be a second best
solution for all of them. And they have a variety of different
interests so what looks like federalism even in the United States, is often not
federalism but decentralization. Thank you.

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