Does Federalism Help In Achieving Good Governance ?

Many countries follow a Federal system of governance that allows multiple levels of governments not subordinated to each other. Such decentralization of power was a factor that facilitated both, national integrity as well as governance, in the last century. However, in a highly integrated and globalized world of 21st century, it may be an avoidable luxury that can also become a great obstacle in ensuring public accountability of governments.
Does Federalism help in Achieving Good Governance ?
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In a Federal System, there are two levels of government, one at the level of the centre and the other at the level of the state or prefecture. These two levels of the government are independent of each other in terms of decision making within the powers that are assigned to them. There could be certain sectors which are allocated to both, or where there is an overlap, and only in these sectors, there could be occasions where the supremacy of the central government prevails.

The Origin of Federalism

Federalism was usually adopted in case of large countries where there were significant

differences in cultures and priorities of constituent people, creating multiple sub-identities or sub-nations within the national identity. Allowing for two levels of government allows certain degree of autonomy to the regions, and allows for differences in the way different regions and their people might like to govern themselves. Such autonomy can often be crucial for preventing friction between different regional identities within the political system, and can be very important during the initial years after a new country comes into existence.

Two important examples of Federal State are the United States and India. Both opted for a federal structure, after breaking the shackles of British colonial rule, and the Federal structure was an important factor in preserving the national integrity in both these cases, particularly during the early years of its existence as a nation state. In case of United States, it was not as much a case of sub-national identities as it was the challenge of keeping together a very large country with fiercely independent people, who would have been difficult to keep together by a central power working from a large distance, in the eighteenth and nineteenth century, before modern transportation and communication systems came into existence. In case of India, which seized independence in 1947, the challenge was more in dealing with multiple sub-national identities existing in the form of princely states, which were least enthusiastic about losing their powers and identity to a mammoth central power. The Federal structure preserved the multiple sub-national identities and thereby allowed a smoother transition to the modern nation state of India.

Thus, it may not be inappropriate to say that very often, the choice for a Federal structure of governance is ruled by political factors. This does not in any way undermine the fact that a federal system, under which there is a government at the level of state or prefecture, looking after a smaller political unit can allows a greater flexibility in decision making, thereby also allowing a democratically elected government to respond to the demands and preferences of the people of that state. This, in short, is the most important justification for having a federal structure of governance, and in theory at least, it holds its ground.

The Drawbacks of Federalism

Everything has a cost, and the same is the case with governments. Governments never come cheap, given their sovereign powers to tax and collect as much as they like. Having one government is taxing enough for the people. Federalism only makes it worse, as the people have to finance not one but two governments along with their establishments, bureaucracies and inefficiencies.

Federalism also has another drawback, which can be much bigger in a democratic

system. It mixes up the accountabilities of the government. When there are two levels of government, often in addition to a third government at the local or municipal level, with an overlapping distribution of responsibilities among them, it becomes virtually impossible for a common man to point out which level of government is responsible for her vows. This is particularly true because of other factors that make distinguishing the accountabilities between different governments even more difficult.

In all political systems, including the Federal State, the fiscal resources are centered in the power at the center. This leads to a resource – responsibility mismatch, wherein the state or prefectural government and the local authorities are often financially dependent upon the Central Government for grants, to carry out the responsibilities allocated to them. This is the greatest limitation in accountability, as people are paying taxes to Central Government, State Government and Local Government, which are then redistributing them between themselves without people having a say, and together carry out functions and projects, making it virtually impossible for the people to hold any one government accountable for a particular deficiency.

Federalism in 21st Century

The last half a century has seen unprecedented advances in communication and connectivity. Today, the distances do not matter for communication. Telephony, Television and now Internet have become an all pervading phenomenon, and lead to a state of globalization where everyone is connected with everyone else. The cultural sub-identities across the world are merging together, and the cities of the world are gradually shifting towards cosmopolitan existence. In the developed countries, immigration is rapidly changing the character of the society, while in the developing countries, the waves of Westernization continue unabated. In such a situation, is Federalism still relevant?

One of the primary reasons for having a democracy is to ensure accountability of the government to the people. However, it is easier said than done. Modern governance is complex. Economy is largely a function of market functioning, and the role of government is to facilitate and preserve market efficiency. With increasing scope for regulation and separation of judiciary from the executive and the Parliament from the executive, the governance structure and functioning is already too complex for the common man to comprehend. With Federal structure and issues of fiscal mismatch, it becomes impossible for the ordinary common man to hold anyone responsible for the problems faced by him.

Need for Re-evaluation of Federalism

During the recent years, with economic downturns adversely affecting the life of the common man, there is growing anger against the establishment, but without a clear target. This is a dangerous situation, where unexpressed resentment and frustration of the common man can eventually manifest in avoidable ways. It makes the environment highly vulnerable to public protests, mobs and chaos.

We need to do everything to facilitate public accountability of our rulers. For that purpose, reducing the number of governments and creating clear responsibilities of those who govern may be the only way forward.

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