POLS1002 Chapter Notes - Chapter 6: Fiscal Federalism, Bilateralism, Confederation
COLOMER ‘The Science of Politics’ – Ch 6 – Federation
• The union of small governments in a large federal structure – e.g. United States and to some
extent the European Union still in process – can make community’s self-government and
the provision of large-scale public goods compatible
• Federalism is just the technique to achieve, simultaneously, the advantages of small-scale
democratic government and broad-scale governmental services
THE SIZE OF THE COMMUNITY
• Communities that differ in size can still be viable if they attain a positive balance between
benefits and costs
• Small size
- May favor collective decision making close to citizens’ preferences
- But can be deprived of large-scale markets and public goods
• Large and varied countries
- May find difficulties making decisions supported by a broad majority of its citizens
- But can have the advantage for the provision of public services on a large scale
Democratic Benefits
Small Groups
Advantages:
• In general small groups have favourable conditions for collective action, self organization,
and the promotion of common interests of their members
• Specifically small political communities may work better at each of the three stages of the
decision-making process that forms the democratic procedure:
1. Deliberation
2. Aggregation
3. Enforcement
• Small community citizens have more opportunities to gain knowledge on collective issues
by direct observation and experience
• Thanks to territorial proximity, smaller groups can deal more directly with political
leaders, and the latter can easily gain information about citizens’ demands and
expectations
• Often members of small groups share values, have a common culture - helps induce
consensual preferences and shared criteria of choice
• More likely to generate loyalty – members more likely to comply with collective rules and
decisions, while leaders may be more responsive regarding their own decisions and
activities
Large Groups
• Collective action for the common interests of its members may be blurred and highly
unequal for different individuals and groups
• Specifically in a large country – people may receive more deficient information on the set
of policy issues submitted to collective decision making and feel more distant from
government than in a small community
• Aggregating citizens’ dissimilar preferences by fair procedures are more costly in large
communities
Size and Democracy
• There is a positive correlation between the proliferation of small-size countries and the
diffusion of democracy in recent periods
find more resources at oneclass.com
find more resources at oneclass.com
• Nowadays, of all the large countries in the world with more than ten million inhabitants,
those with local legislatures or a federal structure are democratic in more than three
fourths of the cases – e.g. Argentina, Australia, Canada, India, United States
• However – in large centralized and unitary states, democracy exists in only ¼ of the cases
– there is democracy in 14 of the 18 large federal countries, but in only 16 of the 73 large
centralized states
Economic Efficiency
• The main advantages derived from the large size of a nation are broad markets and large-
scale collective goods
• Traditional big states protecting large markets offer positive opportunities to different
groups
• Through this help, groups can overcome isolation and the perils of parochialism
• Economic links and interdependence may also favor acquiescence to the state authorities
and allegiance to a broad nation
• In the current world, small communities have new opportunities to exist and survive as a
consequence of the development of vast commercial and communication networks
extending beyond the limits of traditional states
• Significant migration, trade over long distances, transnational capital investments, and
information and cultural messages are promoted by the reduction of transport and
communication costs
• Larger states which are able to protect internal trade – relatively more closed to the
exterior
• Smaller states – usually outwardly more open
UNION
• A federation implies self-rule by local units and shared rule on a large scale by the union
• Building a federal union usually implies political exchanges between communities of
different size and power
• Relatively small or weak community leaders can replace independence with union in the
aim of achieving access to broad markets and protection from external threats
• A well-institutionalized federation can attain both the efficiency of large spaces for the
provision of public goods and the advantages of small-size democratic government
Ethnic Variety
• We refer to “national” or “ethnic”, characteristics as those including religion, race, or
language
Fragmentation versus Polarization
• In only about 2/3 of the countries does one ethnic group includes an absolute majority of
the population
• The average size of the largest group within a country is about 2/3 of the total population,
while the average size of the second largest group is about one sixth
Three types of countries:
1. Medium-size, relatively homogeneous national states – e.g. Britain, France, Egypt
find more resources at oneclass.com
find more resources at oneclass.com
