INTERGOVERNMENTAL RELATIONS

The field of intergovernmental relations has been strongly affected by the considerable processes of upheaval and change that have been experienced within the British system of central-local relations. Researchers have tried to understand these changes both at an empirical and theoretical level. This article reviews four of the main perspectives on the changing nature of intergovernmental relations. The first perspective provides a historical and institutional analysis within the tradition of public administration. The second perspective draws on organizational theory. The third develops insights through rational choice analysis. The final perspective draws on neo-Marxist influenced state theory. It can be concluded that in a search to understand the turmoil of recent years, students of intergovernmental relations have ranged far and wide in their theoretical concerns. The article closes with an assessment of the advantages and disadvantages of this approach.     

Intergovernmental Agreements in Contemporary Russia

ABSTRACT

The paper discusses the evolution and current forms of agreements between federal, regional and municipal governments, as well as between the constituent units of the Russian Federation and municipalities. It analyses the problems and prospects of using these regulatory instruments. The purposes of this paper are to examine the current context of making intergovernmental agreements in Russia, to provide a comprehensive vision of contemporary state of this instrument of shaping intergovernmental relations, and to assess the prospects for their further practical use in the Russian Federation.     

FISCAL FEDERALISM, PROFESSIONALISM AND THE TRANSFORMATION OF AMERICAN STATE GOVERNMENT

A combination of political and economic forces have helped to return the states to the centre of the political stage. Whether measured by objective indicators (employment, share of government expenditure, elasticity of state revenues) or political institutional changes (the rise of career governors, the increasing influence of the intergovernmental lobby and the spread of state responsibilities), the states have become increasingly important in the formulation and implementation of American domestic policies. However, these changes have by no means reduced the level of intergovernmental conflict. On the contrary, cuts in federal expenditure, the introduction of block grants and public opposition to increases in state and local taxation are likely to intensify debate on distributional questions at the state level.     

The challenge of design of intergovernmental relations in economies in transition

The governments of Eastern Europe and the former Soviet Union are at a crucial juncture in their movement from highly centralized command economies to more decentralized market economies. While there is a belief in these countries that decentralization brings greater economic efficiency, the reality is that such a transition is a difficult process. This paper examines what types of administrative reforms are needed for the decentralization process, how far along the countries are with respect to these reforms, and what reforms are missing. As we discuss, many of the necessary administration reforms are missing and we argue that more attention must be paid to these elements for successful decentralization of these governments.

This paper examines the recent experience and reform needs of the key administrative aspects of the design of intergovernmental relations in countries in transition in Eastern Europe and in the former Soviet Union. There is a widespread realization in all of these countries that decentralizing government will help increase efficiency in the public sector just as privatization will improve efficiency in their economies. Decentralization of government operations is also attractive as a way to cement a democratic form of government. Despite the appearances of the existence of an already decentralized system, such as in the case of the Soviet Union, this experiment started in practically all cases with a lack of institutions and experience on how decentralized government operations should be organized.

As different as these countries are, there are many similarities in the reform process they are following in order to decentralize government structure. While the basic components of a decentralized system of government are emerging in many of these countries the structure of government has not fully evolved in a manner that can support such a decentralized system. Often, governments remain structured along a vertical hierarchy: information, budgetary authority, and revenue pass from the central government down to subnational levels of government while little communication or interaction exists at a horizontal level. In general, the assignment of revenue and expenditure has not been clearly defined among the two or three levels of government, central government transfers continue to occur in a relatively ad hoc manner, and the entire budgeting system still rests in many cases on more or less formal system of negotiations and bargaining among the different levels of government. There has been some change in this structure in certain countries. Over the last three years, both Poland and Hungary have legally increased the automony of subnational governments. In 1994 in Russia a new and more transparent system of intergovernmental grants has been established between the federal government and the regions. In 1994 also, Latvia introduced a more transparent formula-driven, transfer formula for the regional and municipal governments.

The focus of this paper is to develop a “blue print” for necessary changes in organization and administration of intergovernmental relations in countries in transition. While many experts have recently been discussing the public finance policy components of this new, evolving relationship among levels of government, less attention has been paid to the structural and administrative challenges and the information design issues that must be met in order to develop and support a system of intergovernmental relations.

The paper is organized as follows: First we review the major responsibilities and their allocation among levels of government, the assignment of revenue sources, and the system of transfers. We then turn to a discussion of the current experience of Eastern European and NIS countries in the context of the structural components of an intergovernmental fiscal system. Next, we analyze the organizational reforms that are necessary for the efficient functioning of a decentralized system of government in the economies in transition. Finally we “rate” the transition economies in relation to their current design of the system of intergovernmental relations and support mechanisms.     

REFORM OF INTERGOVERNMENTAL RELATIONS IN AUSTRALIA: THE POLITICS OF FEDERALISM AND THE NON-POLITICS OF MANAGERIALISM

A remarkable process of reform of intergovernmental arrangements was initiated in Australia in 1990 designed, according to its proponents, 'to improve our national efficiency and international competitiveness and to improve the delivery and quality of services governments provide'. Unlike previous 'new federalisms' in Australia (and elsewhere) the reform process on this occasion was neither totally unilateral, nor top-down in design and implementation. Rather, while reflecting the commonwealth (federal) government's frustrations at the limits imposed by the federal system on its political power and administrative capacity, the process intentionally was cooperative, incorporating all state and temtory government leaders, and including representatives of local government. In the context of a review of the origins, nature and objectives of the reform initiative, this article points both to the valuable innovations embodied in its processes, and to the risks of reduced political access and citizen participation created by its attempts to apply 'single-government' managerialist principles to the redesign of intergovernmental arrangements in federal systems. Political and bureaucratic objectives, combined with a lack of adequate appreciation of federal principles, led, in our view, to an attempt to supplant participatory politics with relatively less accessible and responsive managerial structures.     

Toward the year 2000: Issues and strategies for federal labor-management relations

The 1990s are bringing new challenges to the federal labor-management relations process. Unions and management alike are being forced to confront changes in the demographics of the workforce, fiscal constraints and a conservative political climate. This article reports the results of a survey of federal labor relations professionals. The survey was designed to gauge their perceptions of the strategies and structures of the labor relations program in the 1990s. It revealed marked agreement about the issues that are emerging, and optimism about the program's ability to adapt, but showed some disagreement in strategies needed to meet these challenges.     

Federal-employee unions and workforce 2000

Federal-employee unions face many challenges, including coping with the changes implied by Workforce 2000. These changes, coupled with economic and budgetary constraints, should raise the demand for federal sector unionism per se, but unions are hamstrung in their ability to take advantage of the situation. The law regulating labor relations among federal employees weakens the power and hence appeal of unions. The principal federal unions may employ several strategies to take advantage of Workforce 2000, including political activism, but their relative capacities to do so are limited. The American Federation of Government Employees and the National Federation of Federal Employees in particular have massive free-riding problems which strain their ability to serve represented employees.     

Public hospitals as competitors for medicaid revenue: the case study of St. Louis regional medical center

Medicaid revenues may determine whether public hospitals will survive. Public hospitals participate aggressively in the public market competition for their states’ Medicaid dollars. States must decide whether the survival of public hospitals, as providers of last resort to both Medicaid and uninsured patients, is of continuing importance to their Medicaid programs. Cities, if the states were willing, alternatively could voucher uninsured patients and direct Medicaid patients to the private hospitals that would outlive closed public hospitals. In fact, Medicaid's managed care programs already have heightened this competition, by organizing sufficiently large populations of prepaid Medicaid patients to attract networks of private providers to offer discounted prices, in competition with public hospitals for this market.

Although Medicaid has been a comparatively poor payer, nationally, almost half of public hospitals⁷ funding comes from this source of revenue. Urban public hospitals can barely live with Medicaid revenues, but the extent to which they can live without Medicaid revenues is being determined by surprising new turns in market competition for the revenue. A period of expansive and expensive new congressional mandates for the joint federal-state program was followed in the early 1990s by the introduction by the states of Medicaid revenue maximization strategies. The states’ funding levels, the bases for matching federal contributions, were artificially elevated by provider taxes, provider donations, and intergovernmental transfers. The revenue from all these sources was returned to these providers through the Disproportionate Share Hospital subsidy program for Medicaid-dependent hospitals, as soon as the federal revenue match was calculated, based upon the inflated figures. These practices currently are being stymied, and states simultaneously have escalated competitive bidding by private market managed care providers for Medicaid patients. Missouri has been in the forefront of states moving to maximize the federal Medicaid revenue match and to return Disproportionate Share Hospital funds to providers. St. Louis's public hospital, Regional Medical Center, has been weaned off its local government subsidies, as the intergovernmental transfer and DSH enticements compromised the stability of that hospital's revenue picture. Now, unprotected by an integrated healthcare system or other major role in a regional hospital network, this urban public hospital must struggle to survive within its Medicaid managed care competitive market. The question for the state of Missouri is whether perpetuating a future for Regional will ensure its Medicaid patients a traditional caring public medicine alternative as a fallback position, if Medicaid's present foray into the private market goes awry. For Regional and the city of St. Louis, the question is whether they can any longer count upon traditional state Medicaid revenue and financial support.     

A decade of decline: a longitudinal look at big city and big county strategies to cope with declining revenues

Many local governments have now endured a decade of fiscal decline due to periodic reductions in external funding (federal and state and slowdowns in the rate of growth of the state and local government sector. This research examines the extent to which six large jurisdictions (three cities, three counties) under fiscal duress avoided political conflict and prevented further fragmentation of their authority between 1978 and 1987. The results showed that local officials generally chose retrenchment strategies (revenue, expenditure, and borrowing) with the least anticipated political opposition; but where hard choices had to be made (personnel reductions), they were made without hesitation. The timing of politically unpopular choices to coincide with downward trends in the private sector reduced the level of political fallout, even in heavily unionized, socioeconomically diverse communities. The results also showed that local officials strongly endorsed, rather than opposed, strategies that further fragmented their authority (privatization, intergovernmental cooperative agreements), because these approaches produce significant personnel and capital savings in the short term. Finally, the results indicated that the long-term cumulative effects of short-term decremental decisionmaking on the quality of life (as measured by drops in bond ratings) were negative in only one-third of the jurisdictions.     

Governance,federalism and organizing institutions to manage complex problems

In managing complex policy problems in the federal system, state and local governments are organized into different arrangements for translating policy goals into policy outcomes. Air quality management is used as a test case to understand these variations and their impact on policy outcomes. With data from Clean Air Act implementation plans and a survey of state and local air quality managers, five separate institutional designs are identified: (1) central agencies; (2) top-down; (3) donor–recipient; (4) regional agencies; and (5) emergent governance. Findings indicate that some arrangements (donor–recipient and emergent governance) result in notably better air quality than others (central agencies, top-down). Specifically, when designed to allow bargaining between state and local officials, intergovernmental management is still the most effective approach to complex policy problems; but, in absence of this, conventional federalism arrangements are less effective than public agencies self-organizing around shared policy goals.     

Changes in the Scandinavian Model. From Bureaucratic Command to Interorganizational Negotiation

Scandinavian local government is increasingly changing its organizational pattern away from the principles of local centralized bureaucratic control that were held sacred after the reforms of the 1960s and 1970s - reforms that made local government the building block for the welfare 'state'. Organizational fragmentation is taking place, making room for both new managerial styles similar to those of the New Public Management, featuring contracting out and similar market-like arrangements, and for democratic initiatives which place service users in command of service institutions. Such developments call for new approaches to the study of local government, approaches that take interorganizational relations more directly into account. Suggestions about such an approach are made, based on studies of intergovernmental relations. Distinctions are made between intergovernmental politics which is concerned with symbolic values linked to the status of an organization, and intergovernmental management where processes of making do are seen as most important. In spite of the managerial fashion for strategic goal-setting, it is expected that the new political actors are more interested in day-to-day results and thus challenge politicians, moving them away from the abstract goals in favour of advancing and monitoring actual accomplishments. This increases the need to understand network relations and, in turn, may yield better understanding on the part of citizens of how local politics and management works.     

Public official associations and public administration: A shared history

This essay focuses on the development of public official associations—those organizations that represent the interests of incumbent public officials in public affairs and their sense of the public interest—as a way to illustrate major issues of professionalism and intergovernmental management. Associations are seen as vehicles for linking an otherwise fragmented federal system and profession. Concentrating on the groups representing general government officials, efforts to make public official associations financially secure, intellectually stimulating, and influential in policy formulation will be reviewed from 1891 to 1940. An understanding of the history of Public Administration is incomplete without recognizing that the early development of the field was based on the logic of reform, a central feature of which was an alliance of nongovernmental associations dedicated to the public good.     

THE UNITARY STATE AS A SYSTEM OF CO-GOVERNANCE: THE CASE OF THE NETHERLANDS

The original institutional design of Dutch administration and intergovernmental relations is commonly referred to as the 'decentralized unitary state'. However, the views of traditional administrative theorists have been misrepresented. Hierarchy, uniformity and the separation and delimitation of layers of government are not, as often alleged, the theoretical underpinnings of the Dutch unitary state. Rather, classical theory emphasized interdependence, diversity and the dynamic interaction of relatively independent layers of government. This image suggests that Dutch administration does not need a greater separation of layers of government but better means for regulating conflict. It also suggests that the unitary state comes in several guises and cannot be equated with a monocentric system of government.     

Remapping the State: Inter-Municipal Cooperation through Corporatisation and Public-Private Governance Structures

The institutional setting of regional and local government in Italy appears to be characterised by an ongoing process of reform and adjustment ever since Regions were created in 1970. More recently, provinces and Municipalities gained wide autonomy in 1990, and the constitution itself was revised in 2001 to set up what is sometimes referred to as a ‘quasi-federal’ system of intergovernmental relations. In this context, inter-municipal cooperation also has witnessed several phases and dynamics, ranging from (very rare) fusions, through single-purpose cooperation, to integrated service management (Public-public partnership, and consortia for the management and/or regulation of public utilities). More recently, and most notably over the past decade, inter-municipal cooperation has taken on a new form, consisting in the shared ownership in joint-stock companies. The so-called ‘corporatisation’ of public bodies, i.e. the creation of public-owned (or mixed public-private), private-law companies and corporations for the fulfilment of public-interest activities, has come to constitute a network of inter-municipal cooperation that appears to represent a shift from an institutional intergovernmental structure of cooperation, to one that is pre-eminently played out in the arenas of public-private forms of governance. The article analyses the literature and overarching trends in inter-municipal cooperation in Italy, and draws on very rich original data on the companies owned by Municipalities in six Italian regions to show how these companies represent the locus of inter-municipal (and multi-level) relations that go well beyond the formal boundaries of local administrations, and are often brokered by powerful private partners.     

Budgetary politics in the Russian federation:(1) the case: of sakha (yakutia)

This article traces the evolution of center-periphery relations between the Russian federal government and the Republic of Sakha (Yakutia) using an institutional framework. During each of three stages the author identifies a distinct set of institutional parameters that, to varying degrees, determined the powers of federal and regional institutions. Each stage is also identified with a unique central institutional conflict that helped shape the rules of the political games played during that period. From this perspective, institutional change is seen as a major determinant of Russian center-periphery relations. The article concludes that Sakha has had remarkable success in extracting budgetary concessions from the federal government. However, Sakha has been unable to force the federal government to implement all the promises it has made.

Nonetheless, the concessions that Sakha and others have received are significant, and prompt the conclusion that Russia has become a federal state. However, Russia is far from an equal federation.     

Ethiopian federalism: autonomy versus control in the Somali region

This study examines the relationship between Ethiopia's federal and regional authorities since the Tigray led regime came to power in 1991. The redivision of Ethiopia into ethnic regions was aimed to effect two changes: to abolish certain ethnic domination of the state; and to enable various communities to govern their local affairs. Using material from the Somali Region, this article evaluates whether ethnic‐based regional authorities have sufficient autonomy from the centre to be accountable to local populations. The ability of local people to elect their leaders is central to undoing past ethnic injustices. Although communities have gained from the new order, however, the federal ruling party tightly controls regional political authorities. Federal domination of regional governance is partly the result of the ineptness of local elite. This arrangement creates formal ethnic regions without significantly altering power relations in Ethiopia. Consequently, the spirit of the 1991 change is lost as local communities lack leeway while a new ethnic group reigns supreme at the federal level.     

Financing the capital budget: change and transition

The changes in intergovernmental finance which occurred in the 1980s have impacted the traditional roles of state and local governments in many areas. The changing roles of such governments in the financing of infrastructure and public capital investments have been particularly pronounced. Their growing responsibilities in infrastructure finance has led to an enhanced emphasis on capital budgeting and on developing new initiatives in the capital financing arena. This article explores the impact of such changes on the strategies that are and will, probably, be employed by state and local governments to finance future capital acquisitions in a changing economy and intergovernmental fiscal environment.     

Indian politics in the 1990s: Trends and transformations

This article examines significant transformations that have occurred in Indian politics in the last decade, particularly after the eclipse of the one‐party dominant system. India is said to have entered the era of coalition politics with all its attendant consequences. The advent of coalition politics has induced pronounced political changes but coalition politics itself can be seen as a consequence of these changes. Cause and effect is therefore hard to separate but transformations can be identified with respect to India's electoral politics; stability of governments and the party system; federal‐regional equations; and, participation and empowerment. This article discusses these themes to provide an understanding of the noticeable mutations that the Indian political system has undergone.     

How does ethnic diversity shape the design of intergovernmental fiscal relations? Evidence from China

This study examines how ethnic diversity shapes the design of intergovernmental fiscal relations in regimes such as China, where local accountability and resident mobility are largely absent. We argue that in these regimes, ethnic diversity largely captures potential social conflicts and instability, consequently requiring a higher level of fiscal centralization and regional equalization from upper-level governments to preserve social stability. Using provincial and sub-provincial level panel data from China for 1995–2019, we find strong supporting evidence that an increase in a province's ethnic diversity significantly increases fiscal centralization and the provincial government's fiscal equalization efforts. We also show that these effects tend to be stronger in provinces whose leaders have closer ties with the central authority and where local capture is less serious. Our study contributes to a better understanding of ethnic diversity's consequences on the policy choices governments make.     

CORPORATISM, PAY NEGOTIATIONS AND LOCAL GOVERNMENT

The era of the 'Social Contract' between 1974 and 1979 has been seen as the epitome of 'corporatism' in British government. This article explores the utility of the concept of 'corporatism' for the study of intergovernmental relations, examining pay negotiations in the fire service between 1976 and 1980. It identifies the central characteristics associated with a corporatist system; describes the institutional and procedural context of pay negotiations in the fie service; catalogues the events surrounding the firemen's strike of 1977; and assesses the strengths and weaknesses of corporatism in explaining these events. It concludes that the concept of corporatism has now acquired so many multiple and contiguous meanings that it adds little to the analysis of relationships between government, local government (employers) and the trade unions. Such terms as network, compliance and executive authority are of greater use than the corporatist terminology of hierarchy, regulation and order.