Modal of federalism in Nepal
March 27th 2010 09:44
they voted for federalism
Framework for Federalism & National Integrity
Amidst mass fanaticism and aspiration, Nepal, free of de facto monarchy and after months of successful resurrection lodged against despotic and feudal monarchial governance, is on the verge of state restructuring. While there has been qualm about the essence and vitality of the radically would-be movement from a few circles of the nation, the majority is looking forward to reengineering the unjust politico-economic system that has been oppressing the people. The restructuring will thus not only be a vital tool to instutionalize the hard-earned achievement but also prove to be a platform that accommodates all the citizens of the country. It has been commonly expected that the only way to make the country amenable to people’s aspiration is to federalize it, that is, subdivide the territory in such a way that the right of self-determination will be retained by the states within the nation without upsetting the national interest.
Federalism, which once bore the meat of mass aspiration and seemed to become a mere cliché in the later part of Nepalese political history has again been enlivened as the country is nearing the epoch when the lawmakers will resolutely sit to draft the new constitution. The new constitution is expected to be able to delineate the future feats of Nepal and its denizens, with its rudimentary emphasis on federalism. Even if insuperably in vogue, the term federalism, however, is still vogue and befuddling primarily because the interpreters have not defined it unanimously. This has resulted in mass dilemma as to the meaning of federalism. For general understanding, the term federalism should be understood as a system of the government in which sovereignty is constitutionally divided between a central governing authority and constituent political units (like states or provinces). To elaborate it, federalism is a system in which the power to govern is shared between national and (state) governments, creating what is often called a federation. Thus, federalism is primarily concerned with dividing the sovereignty and ruling competence among self-governing states or regions and federal government united by the later.
Overview of federalism
Federalism’s increasing importance
Federalism is said to be very important since more than 40% of the world’s people live under federal government setups in more than 25 federations. This number is surging up gradually. There are broadly two types of federation prevalent in the world namely ‘Federations from coming together of separate units’ led by Canada, United States, Australia and ‘Federations from “coming apart” of unitary states led by Belgium, Ethiopia, Spain, United Kingdom. It is equally noteworthy that federalism has also proved to be a boon to resolve the conflict and provide a conducive environment to the conflict-inflicted countries like Bosnia, Iraq and Sudan. On the top if everything, it can also be proposed to resolve post-conflict environment of Nepal.
Common Features of Federations
There are two orders of government operating viz. national government for the entire country and territorially defined governments for the regions. Similarly, there will be the presence of a written constitution which allocates legislative & fiscal powers to both orders of government. The constitution bestows on each level of government a special access to exercising legislative & executive powers. Thus, each level of government has independent relationship with electorate, that is federal legislature & executive may or may not entirely chosen by regions. On the other hand, the constitutional provisions on federalism are not amenable to amendment without substantial consent from constituent units as well as the central government. Moreover, the institutions or representation of regional views are prioritized within the central government, with the focus on inclusiveness of the regime, guarded by the umpire or procedure consisting courts or referendums or an upper house to resolve constitutional disputes between governments. In the similar fashion, the will be processes and institutions focusing on facilitating or conducting relations between governments.
Federation vs. Confederation
There seems to be confusion regarding the federation and confederation. But In fact, they are different for the following reasons.
In confederation, the central government does not possess any independent constitutional authority, and thus derives powers from constituent units like in the USA and Switzerland while the central government is appointed by constituent units. Thus a confederation is said to be weak and unstable.
On the other hand, in Federation, federal government derives power from constitution, aside from being able to direct relationship with electorate.
Federation vs. Decentralization
These two words have almost exclusively been used synonymously in Nepalese politics as many political parties argue that division made in the Panchayat regime is the perfect model. But decentralization will still focus on unitary states like in the U.K. because the Central government creates, and delegates power to, regional authorities. Meanwhile, the regional governments can be directly elected and can be abolished or their powers can be modified through ordinary legislation in spite of having substantial responsibilities. In contrast, in federation, regional authorities derive status & powers from constitution, which cannot be amended by federal government with simple majority in legislature.
What is Federalism for?
This is the biggest debate the Nepalese masses seem to indulge in. some doubt federalism divides the country permanently while many other find it as a platform that ensures the manifestation of Nepalese aspirations, for the latter argue that federalism convolute, deconcentrate, decentralize power, and ultimately everyone will have an access to the national politics.
The proponents of federal state are in the right not only because democratic rationales are inherent in it while making a conducive environment for general populace to participate in democratic politics in smaller communities but also because it ensures accountability. Regional government are greatly controlled because they are directly accountable to regional majority, which may be a minority at the national level. Another pro of federalism is that the officials are more likely to live in localities where impact of policies is felt, and thus display a considerable responsiveness because regional majorities can tailor public policies to meet their needs and circumstances against uniform national policy. Similarly, policy experimentation becomes possible at regional level as well as at national level. If successful, the policy can be applied by other regions and not, costs of error are limited only to one province. At last and most importantly, federalism accommodates ethnic, linguistic or religious minorities because regional minorities may be local majorities. Hence, the issues like language, education, and legal systems, religious rights will correctly addressed which is the need of the moment for Nepal.
Federal procedures: a brief insight
There are two different models to distributing powers in federalism. Classical modal is that practiced in Australia, Canada, United States which possess exclusive areas of competence, each establishing and administering own programs. They have some concurrent jurisdiction. On the other hand, Inter-locking modal is practiced in Germany, South Africa which has many shared competences. In Germany, federal legislature enacts framework, regional legislature fleshes out detail while in South Africa, there is practice of concurrent jurisdiction with provincial paramount except when the national interest is at stake.
The practical effect of distribution of power is directly reflected in controls over government revenues. A federal state will have own source of revenues, which is key to autonomy for federal state enjoys revenue raising capacity as per expenditure needs. So fiscal transfers might or might not be conditional. Unconditional fiscal transfer is recommended in Nepal provided the craggy geography Nepal possesses.
Distribution of legislative, fiscal powers are normally set out in Constitution. But powers of individual constituent unit governments can be substantially determined through bilateral negotiations with the federal government while delegation of legislative responsibility between orders of government is permitted like in India.
In spite of some commonalities, every federation allocates power differently. The powers always enjoyed by the federal government are related Currency, Defence, Treaty implementation while powers related to external trade (occasionally concurrent), inter-state trade (occasionally concurrent), major infrastructure (sometimes concurrent/regional) and customs/excise taxes are usually enjoyed by federal state. The regional powers lie usually in intra-state trade (sometimes concurrent), Primary & Secondary education (sometimes concurrent), Health care (sometimes concurrent), Public health (sometimes concurrent) and Municipal affairs while the usually Concurrent or Joint affairs are associated with Environment, Courts, Police Corporate and personal taxes. However, there is no clear pattern in power sharing in the areas like Mineral resources, Agriculture and Criminal law
Political Institutions of Federal Government
The philosophy of federalism lies in self-rule and shared rule. Thus, institutions of shared rule are as very important to success of federalism as institutions of self-rule.
Federal government enjoys control over policy files which affect citizens in regions and the governments must interact not only because jurisdiction overlaps but also because federal government’s actions may support/undermine regional governments.
The offset of federations is manifested in ‘representation by population’ in legislatures through bicameralism. There are various representative principles. There is a lower house closer to representation by population and an upper house ensured through formula based on constituent units. But it may vary. The officials are elected or appointed in different ways. The lower house might contain authorities elected while the upper house may enlist officials through direct election like United States or indirect election India and South Africa.
Powers given by directly elected representatives by usually voting more along party than regional lines even though they may represent regional parties determines impact of upper house.
At the meantime, political party system will determine how federation will operate. There is an enormous variation. There may be national parties, functionally connected to regional parties and functionally independent from regional parties, while the regional parties might operate at national level or at regional level.
The rule of laws: a pillar of Federalism
Federalism is operated with the guidance of the written constitution. Thus, federalism requires written constitution which allocates power to each level of government. There are chances of jurisdictional disputes will arise which turn on conflicting interpretations of constitution. It needs a process to settle jurisdictional disputes. The constitution serves an umpire. In most federations judiciary serves as constitutional arbiter while it will have politically controversial position because it will be likely to be accused of playing politics.
Conditions for judicial success are that courts, especially apex court is pivotal as it is viewed as legitimate & impartial. The judges are selected on the basis of/by competence; consultation with/consent of constituent units and legislative oversight. The court might pose federal nature. There will be judicial independence with security of tenure and financial security. Most importantly, the judiciary bodies will have broader commitment to rule of law.
When it comes to emergency Powers some federations provide powers to central government to override normal constitutional arrangements in emergencies. The central government can thus override federal division of powers which must be overridden to undermine constitutional government like in India’s “President’s rule”
Constitution amendment is rather tenuous as it typically requires special procedures and majorities while amendments affecting constituent units usually require some measure of consent by their legislatures and executives or populations. Nonetheless, the degree of consent varies. Therefore, constitutions can be difficult to be amended. Nevertheless, alternatives to formal constitutional change are frequently sought so as to adapt federations to changing circumstances.
Intergovernmental Relations in federalism
There will be a considerable interdependence between two orders of government and regions especially in inter-locking federations. Politicians, civil servants, public all are prone to try to influence actions in other jurisdictions. Courts are not the only bodies to settle intergovernmental disputes because many disputes within constitutionally accepted boundaries may arise and there will be federal funding of provincial programs while most issues in dispute between governments do not turn on differences regarding constitution. The major determinant of intergovernmental relations will be power of executive relative to legislature. Also, if governments are dominated by the executive, then ‘executive federalism’ becomes key intergovernmental process whereas if legislatures play more independent role, then there will be more diffused pattern of intergovernmental relations. The effectiveness of ‘federal’ role for upper house in central government will equally be significant. Another determinant factor is the number of units.
Central government may be quite dominant & can be coercive as well in relations with regions, or more equality and greater emphasis may be given on consultation and negotiated agreements.
the election
The Relevance of Federalism
Although federalism is not inherently superior form of democracy and its value depends on circumstances, it is very relevant to the countries where there is broad respect for rule of law, culture of tolerance & accommodation between population groups, embracing diversity as what defines country better than tolerance for stability of federation and significant elements of shared identity
Modal suitable for Nepal
There have been copious talks as to what kind of federalism is really epoch-making for Nepal, and two modals have been widely debated namely federalism based on ethnicity and federalism based on geography. The proponents of the former say that ethnicity-based federalism was the heart of mass resurrection while the proponents of the latter are of the opinion that reengineering should not be a matter of social issue. They say it should cover the economy. Whatever way, the new state should not opt out inclusiveness, convolution of power to the national minority groups which are locally majorities. The focus should be now on ensuring balanced growth and a healthy inter-state relationship which should be reflected in economic and social issues. This gives birth to fiscal federalism.
Federalism based on ethnicity
It is every considerable fact that ethnicity is one of the most frequently cited sources of instability and conflict within states. Intra-state conflicts between different ethnic groups or between ethnic minorities and the state supersede inter-state conflicts today. It is thus crucial to propound institutional devices ensuring democratic participation from the whole spectrum of ethnic groups within a state, thereby managing ethnic tension to prevent violent conflict, instability or state disintegration. Federalism has become a popular resort in this direction for theorists and policy makers alike.
Maoists have proposed for an Ethnic federal system, where the borders between the regional units should match the boundaries of relevant ethnic or linguistic communities. Although support for federalism as a tool of ethnic conflict mitigation is generally strong among political scientists, the idea of ethnic based federalism is highly controversial.
A major argument in favor of ethnically based federations is that the country’s ethnic subdivision ensures that the various ethnic groups will form a local majority in one or more of the subunits (Kymlicka 2006). In this way, minorities may feel a sense of security and be enabled to promote own culture and identity. It is assumed that when the demands of self-determination are met and the culture of the groups is assured, the source of inter-ethnic struggles is undermined and instead intra-ethnic competition is likely to occur.
In the contrary, the iconoclastic political scientists who are against ethnic federal subunits claim when ethnic groups have their own subunits, instability and the pressure for secession are likely to increase or when the group is endowed with resources, legitimacy and an independent power base, people’s loyalty will be to the regional subunit rather than to the federation as a whole, thus undermining the existence of the dual loyalty, which is essential to the unity of the state (Feardon and Laitin 1996; Brubaker and Laitin 1998, Duchacek 1987). They further there is also a practical problem in the creation of ethnically homogenous regions, which is very relevant for Nepal. Ethnic homogeneity is hardly possible in any territory in multi-ethnic states, due to the diversity and mixture of peoples across ethnic boundaries. Therefore, new minorities are likely to be created within the subunits, who are in danger of being victimized, intentionally or not (Adeney 2000). On the other hand, by creating ethnically heterogeneous subunits it is possible to prevent national minorities from becoming local majorities (Elazar 1987).
Implications for Nepal
Surprisingly enough, there is no clear cut answer to the question whether ethnic federalism by itself undermines democracy and stability in multi-ethnic states. However, the Indian case displays that there is a symbiotic relationship between federalism and democracy and hence the federal subdivision of the state would probably not have managed to facilitate Indian unity if it had not been a democracy, while the well functioning democracy is made possible by the empowerment of regional states and minorities in the federation. In contrast, the illegitimate centralization of power and the lack of democracy in Ethiopia are undermining the federal division of power, and the federal subdivision along ethnic lines is exacerbating ethnic conflict. It is thus clear that democracy and federalism must co-exist in order for federalism to have a stabilizing and reconciliatory effect. Nevertheless, when it comes to stability, the experiences of both federations illustrate the intrinsic problems of ethnic federalism: the danger of a never ending process of state demands from more and more ethnic groups. Unless claims for separate statehood are accompanied by a high degree of flexibility from the central government to change sub-federal borders, there is a danger of increased and continued ethnic tension. It also shows that unless ethnic subdivision is supplemented by a strong protection of minority rights, it is likely to lead to increased discrimination of sub-ethnic communities. Based on these conclusions, the Constituent Assembly of Nepal should carefully consider the following recommendations:
Recommendations
1. The Constitution should facilitate the consolidation of a deep-rooted and inclusive democracy, involving all segments of society, including various ethnic groups and castes.
2. It should enhance a political system which permits the expression of various cleavages in society (class, caste, urban/rural, religion etc), not only the ethnic one. Nationally based, and not only ethnically confined parties, should be allowed and encouraged.
3. The constitution should include flexible and transparent procedures for the creation of potentially new federal sub-units.
4. It should ensure a strong protection of minority rights and universal individual human rights, by asserting that all citizens within the various federal units, not only the indigenous ones, should have the right to employment and property.
5. The Constitution should carefully balance the rights of federal units with those of the central state. A strong and legitimate political centre is a precondition for the rule of law and a genuine protection of the rights of all citizens of Nepal.
A brief note on Fiscal federalism: Problems and foresight
Fiscal federalism pertains to the revenue apportionment and balance. Some states have higher level income while some are dependent. According to a government's report as much as 81% of government revenues in Nepal were in 2004/05 from the four districts of Kathmandu (42%), Parsa (24%), Morang (8%) and Rupandehi (7%). The next top revenue earners were Lalitpur (2%), Chitwan (2%), Sindhupalchoc (1%), Jhapa (1%), Dhanusa (1%), Banke (1%), Makwanpur (1%), and Kaski (1%). The remaining 63 districts contributed only 6% of the revenue. This proves that irrespective of the ultimate partition into federal states, Nepal will face a challenge in redistributing government revenues from the few wealthy districts to the majority of poor districts. The states in which the aforelisted twelve districts lie will be very prosperous while the rest will be underprivileged. This is a major challenge when it comes to reallocation between states. The need for redistribution of government revenues, and thus the risk of political conflict, will depend on the actual partition of the country into federal states since most proposals end up with poor states in the eastern and western hills, and potentially a poor state in the western terai. As a consequence, redistribution between, and within, states will be necessary.
A federal state will meet many of the same problems of taxation and redistribution as a unitary state. Additional specific problems and potential benefits may arise from the federal structure itself. In general, a federal structure is beneficial if local conditions vary from one region to another. As local needs vary the local government may be in a better position to implement necessary policies. However, this requires that the local government actually pursue the interests of the local population, and not the local elite.
Another potential problem is that local governments may decide on very different tax and redistribution schemes. In India they have even taxed inter-state trade, which implies that each state will produce less of the goods and services for which they have comparative advantages. In the Nepali context, however, this would mean that hill districts may have to pay tax on rice imported from the terai. Similarly, the federal states may decide on different tax rates between states, and between commodities and services within states. In both cases people may adjust to these tax differences by moving economic activities to other states, or between sectors within states. This means that the states may compete on tax rates, and it means that the tax-structure may lead to inefficient production of goods and services. There are many examples of this from India, where the federal fiscal system is being reformed.
Nepal should attempt to avoid the mistakes made in India. The tax-system should be as simple, and broad, as possible. Most economic activities should contribute to the government's provision of public goods, and tax rates should be uniform across sectors and states. As taxes are collected at the local level, it is wise to let the local government keep a share of the taxes to give incentives to create a broad tax base, and to effectively collect taxes. In addition, there is need for a simple redistribution scheme, where the poorer states get additional funding from the centre. There will also be need for a redistribution scheme within states, where the poorer districts receive funding from the state government. Finally, it is essential that the local bureaucracy and politicians are accountable to the voters. This would mean regular local elections and the authority by the central government to legally intervene whenever the local government misuses its powers.
How many states?
Provided Nepal is a very small country, the state restructuring committee should make as less states as possible. Self determination, together with inclusiveness will make a conducive environment for every citizen to fell home where they are living. The states should be equitable and equal in the division of natural resources and reallocation of governments' revenues.
Conclusions
The new constitution should facilitate a deep-rooted and inclusive democracy where all minorities are protected. Irrespective of the final partition, there will be a number of ethnic minorities within all federal states. A thriving and inclusive local democracy is necessary to secure the interests of all local peoples and not only the local elites. Furthermore, the constitution should secure the interests of groups defined along non-ethnic cleavages such as class, caste, urban/rural and religion. To the extent possible each federal state should include an economic center. This is hard to implement given the regional economic structure of Nepal, and a relatively strong national government is necessary to redistribute financial resources to the poorer states in the eastern, and in particular, the western hills, and possibly also the western terai. The national government should also unify the tax- and redistribution system to avoid tax competition and inefficient adjustments to the fiscal system.
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