Essays/European Federalism

Essay contributed by /u/stefanof93.

What Is Federalism?
The following explanation for Wikipedia outlines the fundamentals of federalism very well.

Federalism is the mixed or compound mode of government, combining a general government (the central or 'federal' government) with regional governments (provincial, state, cantonal, territorial or other sub-unit governments) in a single political system. Its distinctive feature, exemplified in the founding example of modern federalism of the United States of America under the Constitution of 1787, is a relationship of parity between the two levels of government established. It can thus be defined as a form of government in which there is a division of powers between two levels of government of equal status.

Federalism differs from confederalism, in which the general level of government is subordinate to the regional level, and from devolution within a unitary state, in which the regional level of government is subordinate to the general level. It represents the central form in the pathway of regional integration or separation, bounded on the less integrated side by confederalism and on the more integrated side by devolution within a unitary state.

A more precise definition is provided by a peer reviewed paper called "How can we define federalism?" by John Law.

This paper says that for a form of government to be regarded federal there needs to be: "a division of powers between two levels of government of equal status".

Equal status is further defined as follows:

I propose that we define this critical sub-concept through reference to three attributes: (i) constitutional protection of the regional governments, (ii) the direct effect of law of the general government, and (iii) majority-voting in the decision making process of the general government. Taken together, these seem to represent the necessary and sufficient conditions for a relationship of parity among the levels of government of an intermediate political system. The first attribute determines the constitutional independence of the regional governments. The second and third determine the effectiveness of the general government.

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The first attribute firmly distinguishes the realm of equality of status from the more integrated side. It refers to constitutional entrenchment of the prerogatives of the regional governments; that is, to the absence of a right for the general government unilaterally either to abolish them or to reduce their powers. Such a right exists in a system of devolved government within a unitary state, but does not in a federal state.

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The second and third attributes mark out the zone of equality of status from the less integrated side. These two criteria would seem to be the requisite ones, from reference to the American and European cases of regional integration. The former instance, in the genesis of modern federalism under the move from the Articles of Confederation to the US Constitution in 1789, and in the corresponding creation of the first compound polity, established the direct application of the law of the general government as a critical feature [snip].

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It has now been shown, however, to be a necessary but insufficient condition for equality of status. For the European example has demonstrated the existence of a further requirement: the use of majority-voting in the process of legislation itself, attained with the Single European Act of 1987. This is needed in order to make the upper tier fully operative as a second level of government. In acquiring this element, the blocking or ‘veto’ power of individual regional governments is ended within the common sphere of action and a significant measure of regional autonomy is sacrificed for gains in the efficiency of the general government. It thus represents the point when the general government ceases to be a dependent or subordinate entity, an agent of the regional governments, and comes into an equal relationship with them; and when the territory of confederalism is exited and that of federalism is entered.

Types of Federalism
There are two main types of federalism that differ in the kind of relaionship that exists between the general and regional governments. The description from a paper by Tanja A. Börzel and Thomas Risse does a great job of explaining the differences.

"In principle, we can distinguish two federal models, which differ according to the distribution of competences between the two levels (shared versus divided), the representation of the states at the federal level (strong versus weak), and the fiscal system (joint versus separate)."

Co-Operative Federalism
"Co-operative or intra-state federalism, of which Germany is almost a prototype, is based on a functional division of labour between the different levels of government. While the federation makes the laws, the states are responsible for implementing them. The vast majority of competences are concurrent or shared. This functional division of labour requires a strong representation of the states at the federal level, not only to grant an efficient implementation of federal policies, but also to prevent the states from being reduced to mere administrative units. The reduced capacity for the self-determination of the states is compensated by their strong participation in federal decision-making through the second chamber of the national legislature. Major policy initiatives always require the consent of the Federation and the majority of the states. The chamber of territorial representation is organised according to the Bundesrat (Federal Council) principle: the states are represented by their governments in relation to their population, with smaller states usually enjoying over-representation. Representation is not only disproportionate but also indirect. The sharing of policy competences in terms of a functional distribution of labour is backed by a sharing of tax revenue in a joint tax system, which is usually complemented by financial equalisation. Federation and states share the most important taxes. The allocation of joint tax revenue also allows for a redistribution of financial resources between states with stronger and weaker spending power. The functional and fiscal interdependence of the two levels of government not only gives rise to a co-operative federalism, interlocking politics and joint decision-making, it also favours the emergence of a policy-making system in which policies are formulated and implemented by the administrations at both levels of government. Such executive federalism is counterbalanced by a strong and vertically integrated party system, which provides for an effective representation of non-territorial (functional) interests at federal level."

Dual Federalism
"Dual or inter-state federalism to which the US most closely corresponds, emphasises the institutional autonomy of the different levels of government, aiming at a clear vertical separation of powers (checks and balances). Each level should have an autonomous sphere of responsibilities. Competences are allocated according to policy sectors rather than policy functions. For each sector, one of the two levels of government has both legislative and executive powers. As a consequence, the entire machinery of government tends to be duplicated because each level should manage its own affairs autonomously. The sectoral or dual allocation of policy competences is complemented by a rather weak representation of the states at federal level. The second chamber of the federal legislature is usually organised according to the `Senate Principle'; the states are represented by an equal number of directly elected Senators, irrespective of their size and population. As a result, the Senate does not represent the interests of state executives, as the Bundesrat does, but the interests of the electorate or the parties within these states. The states articulate their interests through voluntary co-operation with the central state, usually in intergovernmental conferences. Consequently, there is no need for a strong, vertically integrated party system promoting functional interest representation in order to counterbalance executive dominance. The institutional autonomy of each level of government, in the final analysis, presupposes a fiscal system which grants the states sufficient resources to exercise their competences without the financial intervention of the central state. This should be ensured by a comprehensive fiscal autonomy of the states which allows them to levy their own taxes in order to have an independent source of revenue."