Swiss politics and political institutions: 2a) Federalism and Municipalities

1. Swiss politics and political institutions:2a) Federalism and Municipalities Prof. Dr. Andreas Ladner iMPA 2013

2. What is federalism all about? • Federalism is about organizing a territory • Federalism is about dealing with cultural differences • Federalism is about dealing with economic differences • Federalism is about organizing public services

3. Territorial Challenges

4. 26 cantons and 2596 municipalities

5. Inhabitants (7.8 Million) Quelle: www.badac.ch

6. A center (capital city)?

7. Cultural differences? The „Röschtigraben“ The „Spaghettigraben“

9. Source: Michael Hermann, Heiri Leutholt, sotomo

10. (Economic) Differences Zürich Paradeplatz (CS, UBS) Alp Furna (GR) Berner Seeland Basel

11. The rich and the poor

12. Who does what?

13. Program • Nation building without federalism would have been impossible in Switzerland. • Since then, however, things have changed considerably. The nation state has become much more powerful compared to the federal units, and complex patterns of cooperation emerged. • From the point of view of a political scientist we shall briefly analyze the functions and the functioning of Swiss federalism. • A special emphasis is put on the way Swiss federalism copes with challenges such as the increasing entanglement of the different layers of the state when it comes to the provision and funding of services, the growing disparities among the federal units, and the loss of sovereignty of the nation state due to globalization.

14. Further readings • Ladner, Andreas (2010). "Intergovernmental relations in Switzerland: towards a new concept for allocating tasks and balancing differences", in: Michael J. Goldsmith and Edward C. Page (eds.). Changing Government Relations in Europe: From Localism to Intergovernmentalism. Routledge/ECPR Studies in European Political Science. pp. 210-227. ISBN13 978-0-415-54846-5. • Ladner, Andreas (2009). "Local government and metropolitan regions in federal systems: Switzerland", in: Kincaid, John, Helen S. Meyner and Nico Steytler (eds.) A Global Dialogue on Federalism, Volume 6: Local Government and Metropolitan Regions in Federal Systems. McGill Queens University Press. p. 329-362. ISBN 978-0-773-5356-33.

15. Content Block 2: Part 1: Federalism • Preliminary remarks about Swiss Federalism • Comparative Federalism • Swiss Federalism: instruments and functioning • A successful reform of Swiss Federalism

16. 1. Preliminary remarks about Swiss Federalism

17. “We could get everything much cheaper”

19. Cantonal identities

20. My conclusion • If there are no differences there is no need for federalism. • Federalism means accepting diversity. Do you agree?

21. 2. Comparative Federalism

22. Confederations or unitarist states Quelle: Stalder, Kurt (1999). Föderalismus und Finanzausgleich. Schriftenreihe der Fachgruppe für kantonale Finanzfragen. Solothurn: Verlag FkF.

23. Federalism and devolved governments • In confederal systems, the central government is a legal creation of the constituent units (see the two oldest countries US and CH). Important here is the autonomous constitutional existence. • In unitary systems, any regional governments are legal creations of the central institutions (devolution). Some unitary countries are more decentralized that some federations. • Unitary countries such as Colombia, Italy and Japan have relatively strong regional governments. France and Peru are moving towards significant devolution to elected regional governments. In some countries such as the UK there are some regions asking for devolution.

24. Federalist countries

25. Importance of Federalism • 40 per cent of the world’s population • almost all democracies with large areas and/or populations are federal • democratization brings along federalism (Argentina, Brazil, Mexico) • with Belgium, Ethiopia and Spain formerly unitary countries become federalist • Federalism has been adopted in post-conflict democracies (Bosnia, Democratic republic of Congo, Iraq, Sudan, South Africa) • The EU has a number of federal characteristics Anderson (2008:1ff)

26. About 25 states

27. Saint Kitts and Nevis

28. India

29. La Belgique

30. Kanada

31. Common characteristics • At least two orders of government, one for the whole country and one for the regions with different elections • A written constitution with some parts which cannot be amended by the federal government alone • A constitution that formally allocates legislative and fiscal powers to the two orders of government ensuring some genuine autonomy for each order • Usually some special arrangements in the upper houses for the representation of the constituents units giving to smaller units greater weight than they would merit • An umpire procedure to rule on constitutional disputes between governments • A set of processes and institutions for facilitating or conducting relations between governments Anderson, George (2008). Federalism: an Introduction. Forum of Federations, Ontario: Oxford University Press.

32. Names of the constituent units • States: Australia, Brazil, Ethiopia, India, Malaysia, Mexico, Nigeria, US • Provices: Argentina, Canada, Pakistan, South Africa • Länder: Austria, Germany • Cantons: Switzerland • Regions, communities: Belgium • Autonomous communities: Spain • Regions, republics, autonomous areas, territories, cities: Russia

33. Distinctive characteristics • Territorial structure, disparities in terms of population and economy • Division of tasks and services between the different levels • Income and spending of the different levels • Tax autonomy, tax system, formal and material harmonisation • Role of the federal units in the decision making process of national level • Financial disparities between the federal units and mechanism of equalization Stalder 1999: 3

34. The Constituent Units • From 2 (St. Kitts and Nevis, Bosnia-Herzegowina) to 50 (USA) or 86 (Russia) • The largest unit may be bigger than many countries (Uttar Pradesh in India: 160 million people, California: 34 million) • Some units may be very tiny: Nevis has only 12,000 people, AI has 15,000. • In some countries one or two units encompass the majority of the population (St. Kitts 75 %, Flanders 58 %, Punjab in Pakistan 56 %) • In other countries the largest unit constitute a small part of the population (California 12 %, Moscow 7 %, Zurich 17.3 %) Anderson (2008:14ff.)

35. Important distinction • Symmetric federalism • All federal units have the same tasks, competences and resources • Asymmetric federalism • There are differences between the federal units, especially as far as their autonomy is concerned

36. Exemples • Federations typically divide their territory into one main class of unit • Some federations have special territorial units with lesser constitutional status usually making them subject to the central government (the national capital district -> Washington DC; remote and thinly populated territories -> Canada; special tribal areas, overseas territories, Québec) Anderson (2008:16)

37. Congruent versus incongruent federalism • Congruent: The federal units are ethnically and culturally similar to the state as a whole. • Incongruent: The federal units differ from each other. Each unit is more homogeneous than the state as a whole.

38. Examples • Argentina, Austria, Australia, Brazil, Germany, Mexico, the United States have a clearly dominant language and relatively low levels of religious or ethnic diversity • In Switzerland, India, Canada, Ethiopia, Spain, Belgium or Russia the diversity is reflected in the composition of the constituent units. Anderson (2008:17f.)

39. Who Does What and How? Basically two different approaches: • Dualist Models: Different jurisdictions are assigned to each order of government, which then delivers and administers its own programs (Canada, Brazil, US). • Integrated Models: Many shared competences and the constituent-unit governments often administer centrally legislated programs or laws (Germany, Austria, South Africa, Spain). • India and Switzerland have strong features of both. Australia is dualist in administrative arrangements, but has many areas of concurrency. Anderson (2008:21 ff.)

40. Integrated Models (-> co-operative federalism) • For most subjects central government sets framework legislation that constituent units can complement with their own legislation. • In these areas the government of the constituent units delivers programs -> small civil service for central government • Challenge: Restricting the detail of central government policy making • Sometimes there is also joint decision making. Federal law must be approved by all constituent units (Germany)

41. Dualist Models • Each order of government delivers programs in the area of its responsibility using its civil service and departments, the federal government is thus present throughout the country. • In all dualist constitutions there are some shared or concurrent powers (very few in Canada and Belgium, many in Australia). Where powers are concurrent, federal power is usually but not always paramount.

42. Patterns of distribution of power in different policy area • Defence: always federal sometimes constituent units (CU) • Treaty ratification: almost always federal, sometimes CU • Major physical infrastructure: usually federal, sometimes concurrent, joint or shared or CU • Primary and secondary school: usually CU, occasionally concurrent, rarely federal • Post secondary education and research: no clear pattern • Pensions: either concurrent, joint, shared or federal • Health care: usually CU, sometimes concurrent, joint or shared • Police: usually shared, occasionally concurrent or joint, rarely federal or CUjoint = to orders make concurrent decisions; concurrent = both make laws in defined areas; shared = different legal powers, decisions are made independently

43. Residual Power • In bottom-up federations residual power is in the hands of the constituent units • In federations that emerged from previously unitary regimes, residual power is in the hands of the federal state

44. Relationship between the federal units • Competitive federalism • There is competition between the different federal units to the benefit of the citizens (exit, voting by feet) • Solidary federalism • Compensation of disadvantages among the federal units, equalization systems, co-operation.

45. Competition • Many economist argue that a federation should minimize the extent to which constituent units use tax competition to influence companies and individuals to locate in a particular area (limited control over mobile taxpayers). Danger: downward spiral of tax rates, loss of revenues, focus on other taxes. • Some economist favour fairly extensive tax competition because they believe it can promote better services (Anderson 2008: 31).

46. Different revenue and spending arrangements • In some countries, the central government dominates the levying and collection of revenues as well as the delivery of programs. • In other countries, the constituent units play a more important role in the collection of revenues and their expenditures are larger.

47. Central-government revenues relative to total government revenues

48. Central-government direct spending relative to total government spending

49. Public expenditures in Switzerland

50. http://www.economics.uni-linz.ac.at/Schneider/Kompendiumf.PDFhttp://www.economics.uni-linz.ac.at/Schneider/Kompendiumf.PDF