By Ronald Meinardus and Gerhard Raichle
Federalism in Germany: “The Federal Republic
of Germany shall be a democratic and social federal state.”
This is one of the key paragraphs of the German constitution, as
it establishes the principles the state is based on. The writers
of the constitution deemed federalism so important that they included
this provision among the few elements that are not amendable under
any circumstances. Federalism has long become a part of the Germans’
political culture. Often, they refer their our country simply as
“die Bundesrepublik” – the Federal Republic. This shows how central
the concept of political decentralization has become for them.
In Germany, the 16 federal states have substantial authority. The
citizens of the states do not only elect their own state parliaments,
who then choose their own state governments headed by veritable
prime ministers. Importantly, these politicians wield genuine political
power. They are responsible for all affairs pertaining to culture,
internal security, the media, local government and regional taxation.
In addition, the “Laender” have a significant say in national affairs.
Like the Philippines, Germany has a bicameral legislature. But
unlike here, the members of the Upper House are not elected on a
national level. The Federal Council, as it is called, is more like
the Senate in the United State, representing specific regions, in
our case, the regional governments. In the legislative practice,
a majority in the “Bundesrat” has the right to block all laws that
directly or indirectly affect the interests of the regions. According
to estimates, more than fifty percent of federal legislation is
conditional on approval by the regional entities.
The basics od Federalism: While supporters of
this system argue this mechanism has effectively protected the states
against encroachment of their rights by the central government,
others say the principle of federal solidarity and national burden
sharing stands in the way of economic development and modernization.
The Friedrich-Naumann-Foundation has been one of the driving forces
of this public debate regarding the future shape of federalism in
Germany. It is, therefore, a pleasure to share with the readers
of this Philippine book some more fundamental thoughts about federalism.
We hope that after reading this chapter you may agree with us that
the quest for federalism deserves a high ranking on the agenda of
any liberal reform policy.
Let us begin with the basics: “Federalism” denotes a form of decentralized
government, where – in legal terms - the component parts of the
federation (be they states, provinces, laender or cantons) possess
statehood of their own that in some cases have existed prior to
formation of the federation. There are other cases, were a federal
state was created by the devolution of power from a previously centralized
The Principle of subsidiarity: The underlying
principle on which every federal constitution rests is the principle
of subsidiarity. This stipulates that decision making power should
rest as close as possible to those it affects. This is obviously
a fundamental liberal principle which reaches far beyond the constitutional
structure of the state. Freedom is the supreme principle of liberalism,
which is just another term for self-determination or autonomy. If
liberals speak of freedom, they first and foremost think of the
freedom or the autonomy of the individual. Accordingly, liberals
believe that the right to make decisions should first and foremost
rest with the individual.
In a political or collective context, this is not always possible
for practical reasons. For instance, we cannot decide individually
on which side of the road we would like to drive our cars. Still,
the autonomy of a small group leaves more freedom with its members
than that of a large group as fewer fellow-members engage in the
decision-making process. From a liberal standpoint, therefore, wherever
collective decision-making is unavoidable, this should be exercised
in the smallest possible unit. Consequently, any delegation of power
from smaller to larger units should be subjected to the burden of
proof that the smaller unit is unable to cope with the problem in
question. In practice, this means that all those matters should
be left in private hands or in the hands of the citizenry for which
a need of government interference has not explicitly been proven.
This is the essence of the principle of subsidiarity, which is not
only a core principle of liberalism but also the essence of the
concept of civil society. Applied to the organization of the state,
subsidiarity will result in a decentralized form of government where
only those matters are dealt with at a central level that cannot
be dealt with adequately at lover levels.
Accomodating diversity: One major merit of federalism
lies in its capacity to accommodate diversity. When a country is
subdivided in sufficiently small and autonomous subunits, different
religious, ethnic or cultural groups can arrange their affairs according
to their own preferences in their areas. This is the case where
the boundaries of the sub-units coincide more or less with the religious,
ethnic or cultural division lines permitting each group to have
at least one of those units "as its own". Even where such
groups or groupings neither exist nor play a significant role, a
federal structure makes it easier to take into account regional
peculiarities, as the local or regional government or administration
can address such peculiarities.
Generally, where there exist many decision-making centers covering
limited areas, more people will get what they want from those who
govern them than where only one decision-making body is in charge
for the whole country. In the latter case, you may reach a situation,
where 51 percent of the population could dictate to 49 percent.
In short: When administrative borders coincide, by and large, with
ethnic or other division lines within a country, federalism can
be a highly effective method of solving minority problems.
By securing room for a wide variety of solutions – or attempts
at solution - federalism promotes “competition as a method of discovery”
(F.A.v.Hayek). The direct opposite of a "one-solution-fits-all"
approach, federalism tends to minimize the risks involved in errors
of political decision-making: if such an error affects the whole
country, the damage will be considerably severer than if it affects
only one province. Worse, still: if the system allows for only one
approach (i.e. the one covering the whole country), the probability
of identifying the most conducive policy is much smaller than if
different policies are applied in the various sub-units of the country.
It is an age-old and empirically well-supported experience that
competition produces incentives for individuals and collectives
to strive for better results. This basic experience is also valid
for the organization of the state. While centralist states lack
this dimension, federalism may provide for such competition among
Checks and balances: Basically, it is all about
sharing political power and control. Sharing and checking political
power is the very essence of democracy - the better the system of
checks and balances in a country, the better the quality of its
democracy. In a democracy, division of power should not be confined
to the classical separation between the three traditional powers
– legislative, executive and judiciary. In addition to this horizontal
division, what may be termed a vertical division of power is crucial.
To check the power of the central government, it is essential to
devolve authority and rights to lower levels.
As consequence of this vertical separation of powers, federalism
foresees a clearly defined allocation of responsibility at the various
levels of government. In other words, each state level should hold
clearly defined powers and responsibilities exclusive to it. There
should be no mixing or "sharing" of power among different
levels of government as this would only result in a blurring of
responsibilities. The voters should always be in the position to
identify the origin of a policy. They should know, for example,
who to blame or who to credit for the quality of public services
or the level of taxation in a given case. Without such transparency,
a rational decision at elections becomes difficult. This transparency
is a precondition for democratic accountability.
Last but not least, for responsibility and accountability to be
genuine, the transfer of political powers must be accompanied by
a transfer of fiscal powers. Devolving power to decentralized units
makes sense only if the necessary taxation powers go with it. As
long as the central government controls the financial strings, all
"devolution" or “decentralization" is but sham devolution
and sham decentralization. He who pays the piper calls the tune
– this is as much a truism in politics as anywhere else.