Robert P. Inman and Daniel L. Rubinfeld
Democratic Federalism: The Economics, Politics, and Law of Federal Governance
Princeton: Princeton University Press, 2020, ISBN: 9780691202129, 448 pp., $45.00 hb.)
In presenting an interdisciplinary approach to Democratic Federalism, Robert Inman and Daniel Rubinfeld examine different models of federalism and compare their relative effectiveness as regards economic efficiency, fostering citizen participation, and protecting individual liberties. There is a detailed analysis of the advantages and disadvantages of federalism for citizens, as well as the development of federal governance in the United States and its evolution in the European Union and South Africa’s transition from apartheid to a multiracial democracy. Democratic Federalism offers new insight into recent history and, critically, into the future of democracy.
The main question that the book purports to answer is how effective federal democracy is in terms of providing the best outcomes for economic benefits, citizen participation and representation, including the least represented minorities. The authors argue that federal democracy can attain these goals with a well-functional national legislature and locally elected representatives. The book comprises three parts: (I) The Institutions of Democratic Federalism; (II) Encouraging the Federal Conversation; (III) On Becoming Federal.
Part I deals with the forms of Federalism and safeguards of Democratic Federalism. Inman and Rubinfeld, in Chapter 2, discuss Economic Federalism, and based on their empirical analysis agree that Tiebout’s six-condition economy model has merit. However, they suggest that if the expectation is to provide large-scale public goods, expenditures, or spillovers, then Tiebouts’s model is not sufficient, central government is required. Local governments are ideal for supplying effective local services under Economic Federalism. However, democratic participation and representation might suffer, and the protection of rights, predominantly of minorities, becomes very questionable. In Chapter 3, the authors analyze Cooperative Federalism through voluntary alliances (Coasian Alliances) such as the WTO, the Paris Agreement, the WHO, and NATO. However, Inman and Rubinfeld suggest that “Alliances do work when both preference revelation and enforcement are possible” (p.91). Chapter 4 assesses Democratic Federalism and compares its outcomes with economic and cooperative federal governance. As Economic Federalism and Cooperative Federalism fail to provide fair outcomes and guarantee personal rights for everyone and, Democratic Federalism as an alternative to both as it offers economic and political functions through state/ district/ province representatives, and it is identified as “the centrepiece of Democratic Federalism” (p.100). Lastly, Chapter 5 analyses the safeguards of Democratic Federalism. That includes a national legislature, a senate, a president, a supreme court, and competitive political parties (p.140).
In Part II, Inman and Rubinfeld, in Chapter 6, introduce the Federalism Impact Statement, or FIST. The authors suggest that the seven-step “FIST sets the ground rules for a dialogue about a proposed policy’s implications for federal governance” (p.189). The impact of a proposed federal law or executive order is evaluated against the metrics of economic efficiency, citizen participation, and individual liberties and rights. The FIST summary enables deliberative discussions within Democratic Federalism’s institutions that focus on finding a balance between efficiency, participation, and rights to decide whether or not to implement a policy (p.200). Chapter 7 discusses how the government uses fiscal policies of debt, taxes and spending to provide public goods and services in a federal public economy, since the authors explain that the primary role of democracies, regardless of whether they are unitary or federal, is to distribute natural resources to their citizens.
In the last chapter, Chapter 8, Inman and Rubinfeld assess the assignment of regulatory responsibilities in federal unions. Whilst some regulations are not negotiable such as fundamental/ universal individual rights, some issues or responsibilities are shared between national and local governments. When the six-step conditions of Tiebout are met, “race to the top” will not require national regulation. However, any violations, which means “a race to the bottom”, will lead to “national regulation” (p.275).
Lastly, Part III includes two significant case studies concerning fundamental changes in government in the last 50 years: in the European Union and South Africa. Inman and Rubinfeld make an assessment in Chapter 9 of the form of governance of the EU, which they define as “Cooperative Federalism” under the Maastricht Treaty (p.305). Van den Bergh (2016) suggests that “the biggest mistake of the drafters of the Maastricht Treaty was their belief that the introduction of the Euro would speed up the process of political unification” (p. 956). Inman and Rubinfeld, however, argue that open markets, free trade, and market competition have effectively impacted on citizens despite fiscal inefficiencies in budgets. Whilst the protection of individual rights has improved under the EU, citizen participation has been one of the main concerns since citizens are not directly involved in the decision-making process.
In Chapter 10, Inman and Rubinfeld assess the transition of South Africa from an apartheid regime to a new democratic regime that they define as “closely approximating Democratic Confederalism”, with regard to its institutional structure as outlined in the Interim Constitution on November 18, 1993 (p.342). The latest approved constitution in 1996 structures federal institutions, including nine provincial governments, local governments and parliaments. The authors emphasize the country’s challenges; however, they suggest that Democratic Federalism explains the transition to democracy. Consequently, both majority and elite residents have enjoyed economic advantages well beyond what might have been available under apartheid.
The book offers a comprehensive discussion of economic, cooperative and democratic federalism and an insightful view of the value of functional federal institutions for providing local goods and services, active political participation, and individual rights. Since federal systems are created for different reasons and achieve different purposes in various parts of the world, their structures may also be fundamentally distinct (Stepan, 1999). The authors also draw attention to multiple cases of federal states and their positive and negative consequences, such as new federal states, South Africa and Brazil. They also highlight former federal states that resulted in ethnic conflicts, including Yugoslavia, Czechoslovakia, and the Soviet Union. In this book, although federal governance in multinational states has been questioned from multiple aspects, for a more critical assessment, the historical perspective would be helpful, especially in understanding colonialism and external influence on the nation or state-building processes. In fact, as in Iraq, the purpose and reasons for transitioning to a federal system may differ even for each constituent group. The differences in Kurds’ historical background and demands and other groups (Sunni and Shiite Muslims) in the new Iraqi governance system require a unique approach since the Kurds have historical ties to the region/ or defined homeland and have struggled for self-determination more than a century.
In this regard, the history-territory relationship is considered significant in protecting ethnic and indigenous rights. However, this issue is not adequately addressed as part of the debates over the federal system. At the same time, the authors suggest that one of the pillars of Democratic Federalism is to “ensure suffrage and personal freedoms for all inhabitants of the nation” (p. 169); Indigenous peoples’ rights do not appear to be included in the guarantees promised in federal government systems. They are still fighting for their fundamental rights in many countries (Corntassel, 2008; Hamilton, 2019), especially in Canada, the USA, and Brazil. This emphasis also contradicts Dahl’s definition of democracy, which means that the government constantly responds to the preferences of its citizens (Dahl, 1971). The book also discusses this dilemma.
As Democratic Federalism is suggested the best system for representation and political participation, the authors also point out that one of the main weaknesses is that “Democratic Federalism only succeeds for all citizens when citizens are represented within the legislature”, which extra legislative institutions are required to address (p.138). Overall, the book, Democratic Federalism, offers a valuable and well-researched analysis of Federalism by highlighting several case studies worldwide, especially those from countries with emerging democracies. It is highly recommended for those interested in understanding the economic, legal, and political facets of democratic governance that ensures equal access to goods and services safeguards minorities’ rights, and allows them to participate in democratic processes.
References
Corntassel J and Witmer RC (2008) Forced Federalism: Contemporary Challenges to Indigenous Nationhood. Norman: University of Oklahoma.
Dahl RA (2008) Polyarchy: Participation and Opposition. United States: Yale University Press.
Hamilton R (2019) Indigenous Peoples and Interstitial Federalism in Canada, Review of Constitutional Studies, 24(1): 43–84.
Stepan A (1999), Federalism and Democracy: Beyond the U.S. Model. Journal of Democracy 10(4): 19-34.
Van den Bergh R (2016) Farewell Utopia?: Why the European Union Should Take the Economics of Federalism Seriously. Maastricht Journal of European and Comparative Law, 23(6): 937–964.
Aynur Unal
Independent Researcher