Performance Federalism and Local Democracy: Theory and Evidence from School Tax Referenda

Federal governments are increasingly employing empirical measures of lower‐level government performance to ensure that provincial and local jurisdictions pursue national policy goals. We call this burgeoning phenomenon “performance federalism” and argue that it can distort democratic accountability in lower‐level elections. We estimate the impact of a widely publicized federal indicator of local school district performance—one that we show does not allow voters to draw valid inferences about the quality of local educational institutions—on voter support for school tax levies in a U.S. state uniquely appropriate for this analysis. The results indicate that a signal of poor district performance increases the probability of levy failure, a substantively large and robust effect that disproportionately affects impoverished communities. The analysis employs a number of identification strategies and tests for multiple behavioral mechanisms to support the causal interpretation of these findings.     

Federalism and Party Democracy in West Germany

According to Gerhard Lehmbruch, there is a growing inconsistencyin West Germany between the principles of a federal polity andparty democracy, primarily because the former relies on bargaining,and the latter relies on majority rule as a mechanism of conflictregulation. However, comparative analyses have shown that federalismand party competition are not incompatible. Generally, federalstructures are neither detrimental nor conducive to the recruitmentfunction of parties. Competence and experience as a parliamentaryleader or as a specialist is the most essential preconditionfor advancement to national executive positions. The integrativecapacities of political parties may even be strengthened bythe federal division of power. Only in the area of the formulationand implementation of public policy may an inconsistency betweenthe federal system and party democracy arise because the strainon consensus-building inherent in German cooperative federalismmay, under specific conditions, prevent the national majorityparty from converting its programs into public policy.     

Consociational Democracy and Corporatism in Switzerland

The Swiss concept of Konkordanzdemokratie (consociational democracy)is examined in this article. The author traces the developmentof this practice from its earliest origins to its current manifestation,focusing especially on the role that religion and linguisticdifferences have played. The influence of the emerging "politicalmarket" is also examined as is the disappearance of traditionalpolitical cleavages. The article concludes with the author'sspeculation on the future relationship between Swiss "consociationaldemocracy" and the European Community.     

Homogeneity and Democracy in Austrian Federalism: The Constitutional Court's Ruling on Direct Democracy in Vorarlberg

This article seeks to analyze how homogeneity between the federationand the constituent Lander is provided by the Austrian federalConstitution in general. Focus is then put on a recent judgmentof the Austrian Constitutional Court, which has been one ofthe most outstanding cases of the Court's "homogeneity jurisdiction."The Court held a provision of a Land constitution to be in breachof the federal Constitution and therefore repealed it. The reasongiven was that the provision, which had obliged the Land parliamentto pass a law if this was demanded by a people's petition andsupported by the Land people in a referendum, endangered thesystem of representative democracy as provided by the federalConstitution. This narrow understanding of democratic homogeneityand the negligence of the principle of federalism are criticallyviewed in the article.     

Intergovernmental Political Competition in American Federalism

Many policies in the United States are jointly determined by federal and state actions. In the game theoretic model offered here, politicians in both the state and national governments seek credit for providing goods desired by the public and avoid blame for the taxes necessary to provide the goods. In line with Peterson's (1995) theory of functional federalism, the level of government that is better able to supply particular goods and services tends to take the lead in their provision, even to the extent of fully crowding out much less efficient governments. However, under a broad set of circumstances, both state and national politicians seek credit via public spending, and their joint provision leads to a relative "oversupply" of public goods and services, and thus to "overtaxation." Under joint provision, states vary in their responses to changing federal spending patterns based both on the causes of the national changes and on state characteristics .     

Fiscal Federalism for Emerging Economies: Lessons from Switzerland?

Switzerland is one of the most non-centralized countries inthe world. A groining literature is examining the economic effectsof tax competition between the 26 Swiss cantons. Despite therelative success of Swiss federalism, most federal countriesfollow the principles of coordinated rather than competitivefederalism. We identify the institutional preconditions forwell-functioning competitive federalism in Switzerland. Thesecond part deals with the applicability of the Swiss experiencefor emerging economies in Latin America. The analysis recognizesthat most institutions identified to be crucial in the Swisscase are missing in Latin America. This leads to the policyconclusion that competitive federalism can only produce itspositive effects under certain institutional circumstances.These circumstances are often not considered when introducinglax competition in emerging economies.     

Federalism and Party Interaction in West Germany, Switzerland, and Austria

The federalism established in the constitutions of the FederalRepublic of Germany, Switzerland, and Austria, in addition tothe common language of these countries, distinguishes them fromthe other West European countries, which lean toward centrallyorganized states. After examining the historical foundationand development of the federal systems in the three countries,the article analyzes the segmentation, federal-state interaction,and intraparty effects of political parties in them. While federalismis strengthened by the heterogeneity and regional solidarityof the political parties in Switzerland, federalism has becomea pure "party federalism" in the Federal Republic of Germanyand Austria.     

Mobilizing Interests: Group Participation and Competition in Direct Democracy Elections

We examine group mobilization in direct democracy elections by assessing the conditions under which interests will actively support or oppose ballot measures. Motivating our analysis is that the decision to mobilize is driven by the costs and benefits of group participation, a calculus shaped by issue characteristics, state political institutions, and the electoral context. Using data from initiative and referendum measures appearing on statewide ballots from 2003 to 2008, we find that ballot measures involving social and tax issues are likely to produce competition among groups and increase the overall number of groups involved. In addition, we find that group competition and levels of mobilization increased in response to how difficult it would be for the legislature to undo the change brought about from passage of a ballot measure. Lastly, group competition and levels of mobilization increased for ballot measures appearing in nonpresidential election years and for ballot measures featuring a close election. Taken together, our results suggest that groups engage strategically in direct democracy elections to pursue a mix of policy and political goals.     

Tax Competition and Income Redistribution: An Empirical Analysis for Switzerland

Tax competition is supposed to lead to thecollapse of the welfare state because, first, it willbecome difficult for a single jurisdiction to levy aredistribution tax upon the rich and mobile, andsecond, such a policy, if undertaken in onejurisdiction, will attract poor individuals from otherjurisdictions and erode internal redistributionpolicies. In this paper, the impact of personal incometaxes and transfers on residence decisions oftaxpayers is analyzed with Swiss subfederal data. Therelationship of tax competition and the erosion of theSwiss welfare state is tested with aggregate data onincome redistribution.     

National Competition Policy,Regulatory Reform & Australian Federalism*

Changes are afoot in Australia's federal arrangements concerning competition policy. While many of the proposals to enlarge the Commonwealth's sphere of influence are played out in the media, other shifts are more subtle. This article examines one of those areas of change. It looks at National Competition Policy and in particular, its regulatory reform components. It argues that the approach adopted in the 1995 agreement, which was characterised by broad principles, meticulous monitoring and substantial financial carrots, has provided the Commonwealth with a useful tool for effectively intervening in areas that have been until now, matters of state responsibility.     

Federalism and Decentralization: Ownership Rights and the Superiority of Federalism

The benefits and costs usually ascribed to federalism are benefitsand costs of decentralization; they are, therefore, presentin unitary states that are in fact all decentralized. The benefitsand costs specific to federalism pertain to ownership rightsin constitutional powers. Federalism is superior to confederalismand unitarianism because the ownership rights peculiar to thatsystem of government are such that they ensure the perduranceof competition when one or more competitors are unsuccessful.They do so because under federalism, powers cannot be repossessedunilaterally. Ownership rights have to be enforced; as a consequence,there are also costs that are specific to federalism.     

Pragmatic Federalism: Australian Federalism from Hawke to Howard

The article explores the nature of Australian federalism by examining four major themes in the period from Hawke to Howard. The investigation of these themes – Australian conceptions of federalism; the role of party in shaping federalism; the way problems and politics have influenced policy‐making and thereby federalism; and the nature of federal judicial review – suggests that Australian federalism can most accurately be characterised as pragmatic. It appears as a federalism shaped by pressing problems, specific policy agendas and the prevailing political dynamic, rather than by overarching conceptions of federalism derived from political theory or articulated in party ideology. This pragmatic federalism explains important aspects of Australian federalism, especially the trend towards centralisation of authority.     

Devolutionary Federalism and Elazar's Typology: The Arkansas Response to Reagan's New Federalism

This article examines the relationship between the federal andstate governments with regard to the Reagan administration'sNew Federalism. The underlying concern centers on the financialrelationship among governments portrayed by Elazar's typologyof federal aid. The focus of this investigation is directedtoward the adjustments being made by the states to accommodatethe financial and administrative changes occurring on the nationallevel, as illustrated by the case of Arkansas. The analysiscenters on two questions: 1) Has the New Federalism initiativeachieved Reagan's goals of decentralizing governmental authorityback to the states? 2) Has a major redirection in the federalsystem been achieved by reducing the federal financial obligationin the intergovernmental system? The changes being made in thefederal system, as reflected by the adjustments occurring amongthe states, may signal an important realignment of federalism.     

Australian Federalism: Developments and Prospects

This article discusses the principal recent developments in,and future prospects for, constitutional change, judicial review,fiscal arrangements, local government, public policy, and intergovernmentalrelations since the 1977 Publius issue on Australian federalism,taking into account the arguments presented in the other contributionsto this volume. It highlights the continuing vertical imbalanceof Australian fiscal federalism, and the Hawke Labor government'srecent initiative for a closer working partnership with thestates for reforming intergovernmental arrangements. It arguesthat while there is scope for the latter, there is greater needfor the former. Nevertheless, the 1980s was significant as adecade of predominantly Labor governments working with the federalConstitution, while the 1990s promises to be a decade of celebratingthe centenary of the Australian Constitution and working towardimproving the functioning of its federal system.     

Introduction: Federalism and Surface Transportation

The articles for this symposium address federal, state, andlocal relationships in surface-transportation programs. Theseprograms support access to and mobility within specific locations,but the benefits do not uniquely belong to any one politicaljurisdiction. Transportation investments link jurisdictionsand produce dynamic interactions among them that both followand create strong competitive economic, land-development, intergovernmental,and political forces.     

Federalism by Waiver: MEDICAID and the Transformation of Long-term Care

In recent years, many states in the U.S. have substantiallyreinvented their Medicaid programs through the unprecedenteduse of federal waivers. This article focuses on 1915c programwaivers, which gave states the opportunity to overcome Medicaid'sinstitutional bias by offering more home and community-basedservices. The use of this tool has fueled deinstitutionalizationand other program changes. It reflects the rise of executivefederalism—the growing tendency for major program decisionsto shift from the legislative arena to the executive branchof the national and state governments. By functioning as licenses,the 1915c waivers take devolution via the administrative processto new levels. The proliferation of these waivers suggests aneed to revise prior conceptions of federal–state relations,such as picket fence federalism.     

German Federalism in Historical Perspective: Federalism as a Substitute for a National State

A German national state was founded comparatively late in themodern era. In 1871 the German princes formed the German Empire.Unde Prussian hegemony, the Empire remained dependent on itsmember states. The constitution of the Weimer Republic of 1919turned the relations between the federation and the states upsidedown. The Länder, as the constituent states close to beinga decentralized unitary state. The Nazi regime centralizd it.After World War II, the West Germans and the Western Alliesagreed on forming a federal type of government. There was, however,controversy about the kind of federalism to be established.The West German Basic Law retained the tradition of a secondfederal parliamentary chamber in which the Land governmentsare represented. Sovereignty is shared and exercised jointlyby the federation and the Länder in most domestic policyfields.