INTER-PROVINCIAL RELATIONS IN FEDERALISM

[The history of modern federalism began with the founding of the United States of America. Philadelphia Convention established the first example of a federal pact between sovereign states in 1787. There is a clear division of powers between the center and states. This model of federalism is based on competition between the center and states and interstates. So, economic competences are most important thing to the states. This is the overwhelming form of federalism in the 18^th and 19^th century. USA at the time of foundation, Switzerland in 1848 is the example of this model.]

By Rajendra Shrestha

The  green shaded parts are federal countries in the world 

Federalism is a political system in which state power and sovereignty are constitutionally shared between a central governing authority and constituent political units. Central governing authority is often called a federation and constituent political units are called states or provinces. Unlike a unitary state, final authority is constitutionally divided between at least two territorial levels so that units at each level have power to govern and can act independently in some areas. The self-governing status of provinces is constitutionally entrenched and cannot be revoked by a unilateral decision of the central government. Both governments work simultaneously in the same geographical area. Citizens thus have political obligations to two authorities. The allocation of authority between the center and the federal units may vary: the center has powers regarding defense, foreign, strategic economic policy, national institutions and multi-provincial resources and the units have the power to act independently in certain areas of governance such as development works, education, employment, licenses, public health, local governments, intrastate trade, language, culture etc. There is a written constitution which formulates this power sharing arrangement  between  the  federation  and  its  units.

In federalism, there is shared rule at the center and self rule within the provinces. Federations may be multi-national and multi linguistic, or cover a large area of territory, although neither is necessarily the case. Federations are often founded on an original agreement between a number of sovereign states. But in Nepal, we are transforming unitary state to federal state by constituting federal units on the basis of ethnic, linguistic and regional identity and economic viability. Federalism offers better representation to multi ethnic society. Citizens of various provinces may have different aspirations, ethnicity and follow different cultures. The central government can sometimes overlook these differences in unitary state. Our experience showed that only national community caters to ruling class can get benefit in that system. But in federal structure, local needs, tastes and opinions are given due consideration by the state governments and rights of the minorities are protected. It provides space for unity in diversity and allows for ethnic, linguistic, cultural, regional differences to flourish in the state level.

2. Post-modern federalism

The history and evolution of federalism is rich and complex. Facts show that federalism first started in Asia. According to Ronald Watt, federalism began 3200 years ago among Israeli tribes. At the same time, federalism was popular among Beduin tribes of Arabia. Similarly Mahajanapadas were in existence in Indian sub-continent. From the evolutionary period of federalism, to the modern European Union, federations come in many shapes, sizes and purposes. 

1. Classical Federalism

Classical federalism was first started in Switzerland in 1291 AD, federalizing Switz, Uri and Unterland. Sovereign power is in the state government in classical federalism. Center is only a coordinating body. This is confederal model of federalism. Within the ambit of its authority, the national government is supreme over state governments only in foreign and defense matters. States can secede easily from the federation.

2. Modern or dual federalism:

The history of modern federalism began with the founding of the United States of America. Philadelphia Convention established the first example of a federal pact between sovereign states in 1787. There is a clear division of powers between the center and states. This model of federalism is based on competition between the center and states and interstates. So, economic competences are most important thing to the states. This is the overwhelming form of federalism in the 18^th and 19^th century. USA at the time of foundation, Switzerland in 1848 is the example of this model.

3. Post-modern or cooperative federalism:

This model of federalism is based on cooperation between the center and the states. Sovereign power is shared between a central government and the states. Economic competences are shared to a very high degree at the central and the state levels and the states are involved at a very high degree in federal decision making. Similarly center is directly involved in economic equalization among the states. Economic equalization policy includes extraction of more revenue from developed provinces and distribution of more grants to under developed provinces. Center will provide bulk grant, budget deficit grant, matching fund, grant for work etc. to the weak states. Examples of this form of federalism are Germany, Brazil, Canada, etc. Most of the federal states of the 21^st century are cooperative in nature. 

3. Federal countries of the world

At present, Federalism is being followed not only in American and European continents but also in Asia, Africa, Latin America, Australia and Oceania. Twenty-nine of the world's one hundred ninety three countries have a federal system. Much recent political attention is spurred by renewed political interest in the form of federalism, as found through empirical findings concerning the requisite and legitimate basis for stability and trust among citizens. Federal Countries of the world are as follows:

1.      Asia:  India, Pakistan, Malaysia, United Arab Emirates, Iraq.

2.      Europe: Switzerland, Austria, Germany, Russia, Belgium, Bosnia and Herzegovina, Spain, Liechtenstein.

3.      North America: United States of America, Canada, Mexico, Saint Kitts and Nevis.

4.      South America: Argentina, Brazil, Venezuela.

5.      Africa: Nigeria, Ethiopia, South Africa, Sudan, Democratic Republic of Congo, Comoros.

6.      Australia and Oceania: Australia, Micronesia, Palau.                        

4. Nepal is scrutinizing the advantages and disadvantages of federalism.

Looking at these countries' political history, it can be said that there are both advantages and disadvantages of federalism. Contemplating a change in the governing set up of the nation after peaceful people’s revolution in April 2007, the present Nepal is intently scrutinizing the advantages and disadvantages of federalism. Federalism is the method by which diverse population is better represented in a multi-ethnic and multi-linguistic country like Nepal. Division of work between the central and the state governments leads to optimum utilization of resources. The central government can concentrate more on the matter of strategic importance like economic policies, foreign affairs and defense while the state government can give preference to developmental works and people’s needs. It is innovative too. The comparison of the results of different provinces can give a clear idea of which policy is better and thus, can be adopted in the future. But in the eye of critics, federalism is expensive, duplicating and overlapping. Multiple elected officials create principle-agent problems like finger-pointing and blame-shifting. It promotes regional disparities and authorities get away from their responsibilities. But this argument does not sound good because disparity has existed between resourceful area like Kathmandu and disadvantage area like Karnali irrespective to the form of the state. Federalism is advocated to reduce such disparity that the center would have responsibility of equalization among the unequal provinces.

5. Principle of constituting federal units

Nepal is not the union of sovereign states. We are transforming unitary state to a federal one. How many provinces should be there in Nepal? There is no acceptable principle. It should be decided by necessity rather than desire on the basis of diversity.  Let’s look federal units of the world’s federation:

S. N.	Federation	Area  (km²)	Federal  Units
1.	Argentina	27,80,092	23 provinces	1 federal district
2.	Australia	76,92,208	6 states	2 federal territories
3.	Austria	83,872	9 Bundeslader
4.	Belgium	30,528	3 communities, 3 federal regions, 4 linguistic communities
5.	Bosnia & Herzegovina	51,197	2 republic or entities	1 internationally supervised district
6.	Brazil	85,14,877	26 states	1 federal district
7.	Canada	9,984,670	10 provinces	3 territories
8.	Comoros	1,862	3 prefecture
9.	Democratic Republic  of Congo	23,44,858	25 states	1 federal city
10.	Ethiopia	11,27,127	9 regional state	2 chartered cities
11.	Germany	3,57,023	16 Lander or Bundeslander
12.	India	31,66,414	28 states	7 union territories
13.	Iraq	4,34,128	1 autonomous region, 18 governorates
14.	Liechtenstein	160.4	11 Gemeinden
15.	Malaysia	3,29,847	13 states	3 federal territories
16.	Mexico	19,64,375	31 states	1 federal district
17.	Micronesia	702	4 states
18.	Nigeria	9,23,768	36 states	1 territory
19.	Pakistan	7,96,096	4 provinces	1 federal city and some autonomous territories
20.	Palau	488	16 states
21.	Russia	17,098,242	21 republics, 6 krays, 49 oblasts	2 federal cities, 1 autonomous region, 10 autonomous okrugs.
22.	Saint Kitts and Nevis	261	14 parishes
23.	Spain	505,992	17 autonomous communities	2 federal cities
24.	South Africa	12,19,090	9 provinces
25.	Sudan	1,861,484	16 states
26.	Switzerland	41,284	26 cantons
27.	United Arab Emirates	83,600	7 emirates
28.	United States of America	9,629,091	50 states	1 federal district
29.	Venezuela	9,16,445	23 states	1 federal district

The table above shows Russia, the largest country of the world, has different kinds of states. They framed their structure as 21 republics, 6 krays, 49 oblasts, 2 federal cities, 1 autonomous region, 10 autonomous okrugs. USA has 50 states and 1 federal district whereas Canada having more area than USA has only 10 provinces and 3 autonomous territories. Similarly India has 28 States and 7 union territories whereas Australia having more than double area has only 6 states and 2 federal territories. Countries having little more than half area of Nepal like Austria has 9 Bundeslanders and U.A.E. 7 Emirates. In the same way, Switzerland having one third territory of Nepal has 26 cantons. Small countries of the world like Saint Kitts and Nevis has 4 parishes and Liechtenstein  has 14 Gemeinden.

It shows that there is not any acceptable principle about how many provinces or states a country should be divided. It is based on necessity and diversity. In Nepal some scholars seem to be dominated by the political economy approach. Some scholars cater to ruling class advocated economic viability and watershed area should be the main principle of constituting federal units. But we all know that grass roots movement for federalism is predominated by identity assertion. It was not demanded by mountain, hill, river or watershed. It was demanded by disadvantaged communities. In my approach, principles of constituting federal units should be decided by the following:

1.      Ethnic-linguistic-cultural identity, geographical contiguity and historical continuity.

2.      Economic viability followed by revenue generation capacity, gross domestic production, resources availability, development of physical infrastructure, human development index etc

3.      Balance between population and geography, and

4.      Administrative convenience.

In Nepal, article 138 of the interim constitution clearly guides that federal units should be constituted on the basis of identity and viability. State Restructuring and State Power Division Committee of the Constituent Assembly proposed 14 provinces and 23 special autonomous area whereas High Level State Restructuring Commission proposed 10 territorial and 1 corporate (non-territorial) provinces, 2 autonomous councils and  autonomous area for all remaining indigenous nationalities for Nepal on the basis of these guidelines. How many provinces are to be created is still the matter of debate in Nepal.

6. Different names for federal units

There are different names given for the federal units. Federal countries are made up of a number of sub-national entities called states or provinces. In some cases, the federal government arose from a union of the states, which delegated some of their sovereignty to the federal government, while retaining the remaining part of their sovereignty. They are generally called states. But in many other cases, these are creations of the central government rather than sovereign states. So some scholars said that it is not appropriate to name them as ‘state’. However, it is not the case. Many federal units created by the central government used the term State. Such as India, Nigeria, Brazil, Malyasia, Sudan etc. In federalism federal units are the political entities with effective dominion over a defined geographic area.  They are co-sovereign political units having legislative, executive and judicial rights under the constitution. So, federal units are generally called states in federal structure. Following are different names given to the federal units in federal countries:

S. No.	Name of federal unit	Countries
1.	State	United States of America, Mexico, Venezuela, Nigeria, Brazil, Australia, India, Malaysia, Micronesia, Sudan, Ethiopia
2.	Republic	Russia, Bosnia and Herzegovina
3.	Lander/Bundes Lander	Germany, Austria
4.	Province	Argentina, Canada, Democratic Republic of Congo, South Africa
5.	Canton	Switzerland
6.	Emirates	United Arab Emirates
7.	Prefecture	Comoros
8.	Autonomous Community	Spain, Belgium
9.	Parishes	Saint Kits and Nevis
10.	Governorates and Region	Iraq
11.	Gemeinden	Liechtenstein

  

7.  Inter-relation between the provinces or federal units

There are two types of relationship between center and provinces viz. vertical relation, which exists between the center and the provinces, and horizontal relation which between one province to another province. Inter Provincial relations are horizontal relations between the provinces.  No matter how successfully the rights are divided among the federal units, there may arise problem in the use of those rights, which give rise to conflicts and disputes. These types of conflicts should be solved by mutual understanding and cooperation. Today’s world is inter- dependent. So, developed countries help the developing countries. Some countries are totally dependent on other country such as Liechtenstein depends on Switzerland, Micronesia and Palau depend on America. Even though, they are not economically viable, they are independent country. Creation of provinces in Nepal is not the creation of independent country. Provinces are the integral parts of federal Nepal. So, harmonious relationship among the provinces is very important to develop the country.  

In the modern federation, the relationship between federation and units seem to be developed by competitive philosophy. But this competitive philosophy can be applied only when each part of the country has equal economic as well as other infrastructures. At the time of foundation of the United States of America there was competitive relation among the states but in the case of Nepal, it is not possible because Nepal has geographical diversity. Some parts of Nepal have abundance of Natural resources whereas some parts do not have resources at all. Urban areas have high human development index whereas rural areas are very poor. That is why in case of Nepal there should be mutual understanding, good relation, mutual trust, cooperation and agreement among the provinces as they are interrelated and interdependent on each other. So Nepal should apply the principle of cooperative federalism, the post-modern model. The basis of relations among provinces should be based on following principles:

1.      One province should respect another province’s legal provisions.

2.      The provinces can organize developmental works and projects with mutual cooperation.

3.      One province should give information to another province on the matter of mutual benefit.

4.      One province can give economic support, loan and other types of help to another province.

5.      Citizens of one province can enjoy the privilege of travelling, working and staying in other provinces.

6.      One province should give equal facilities and protection to citizen of another province staying there.

7.      Corporately conserve environment and natural resources if necessary.

8.      If criminal of one state runs away to another state then give responsibility to the respective state looking after crimes.

9.      One state should agree with another state’s public law, legal process.

10.  Decision of federal Supreme Court should be followed by all the provinces.

The important factors of inter provincial relation for this purpose are as follows.

1.  Supremacy of people through constitution

In federal structure, there should be vertical and horizontal, and political and economic cooperation. After the creation of provinces, problems may arise among the center and provinces, and between province and province regarding the rights and its use. To prevent these conflicts, the legislative, executive and judiciary rights of the center and the provinces should be clearly defined in the constitution. In Switzerland, it is clearly mentioned in the constitution that center should respect canton’s autonomy and cantons should follow the federal policy. Center and canton should help each other to carry out day-to-day activities and give emphasis on each other’s mutual help and understanding. They should provide legal help and managerial help to each other. The conflict between center and canton and inter canton should be solved by mutual understanding and cooperation.

In South Africa, model of cooperative federalism is introduced. Government of all levels and its organs should maintain peace, national unity and indivisibility of Republic states. All level of Government should respect constitutional belief, organization and its rights. One government should not intervene into another Government’s geographical integrity. Thus, it gives emphasis on cooperation, mutual trust and good relation among each other. So, for good interrelation the legislative, executive and judiciary power should be clearly divided between the center and the provinces for smooth running of the country. Similarly, there should be friendly relation and cooperation between the states or provinces.  

2. Economic cooperation

Federal polity involves the setting up of dual governments and division of powers. So the success and strength of the federal polity depends upon the maximum co-operation and co-ordination between the Center and the States. Collective actions between center and province and inter provinces are needed to public works like highway systems, communication standards etc. If there is smooth and friendly relation between the provinces, economic development will be smooth in the country. The states can have trade relations with each other. Goods produced in one state can be sold to another state where it is needed. Like this, the need of importing goods will decrease which helps to save foreign currency. Collective use of available natural resources should be used by the provinces such as proposed Newah Province can invest to develop industries in Tamsaling and Tamsaling can provide labor to Newah Province. Similarly, Tamsaling can supply drinking water to Newah province and Newah province can help to develop Tamsaling. This type of mutual cooperation is very important for stable federalism.

3. Sharing of innovation and efficiency:

Federalism has space for innovation and experimentation. Provincial governments are policy laboratories that innovate and learn from each other. Competition among governments in welfare of the people may yield better policies. Two provincial governments can have two different approaches to bring reforms in any area of public domain, be it taxation, development, public health or education. The comparison of the results of these policies can give a clear idea of which policy is better and thus, can be adopted in other province in the future. Kerala’s revolutionary land reform under the E.M.S. Namboodiripad became model for many states in India. Similarly present day Bihar under Nitesh Kumar can be the model for other state for development.

4. Border Delineation:

Border is the line of area surrounding a particular country or state. In federal country there exist many states. One state may share a common border with one state or more than one state. In union of sovereign states, border delineation problem will not arise. But when a unitary state transforms to a federal state by creating federal units, it is very difficult to delineate borders. The conflict may arise among the people for more land or resources. In this condition, there may arise problems of border encroachment too. Similarly the common border area may be neglected by the states. Some states may have no access to international border. In this case if it has no friendly relation with the neighboring state it may face problem while importing and exporting the goods from other states. To solve these problems, central government can act as mediator. In this regard meeting, discussion and implementation of law are important.

5. Internal controversy and conflicts

Certain forms of political and constitutional disputed are common to federation as presented below.

1. Main issue of conflict in federal form of government is the division of power and responsibility between center and provinces. Similarly economic strategy, revenue and division of revenue, application of law, patent right, big project, etc., are also often the source of controversy.

2. Another issue of conflict in federal system is the problem of sharing the natural resources. Each part of the country cannot have equal natural resources. Some federal units may have greater demands and problems than others, creating either inequities or animosities arising from redistribution of country’s resources.

3. Another common issue is the feeling of inequality among the provinces. Central Government may give higher priority to some province while completely ignoring other provinces.

4. Conflict between regional and national interests or between the interests and aspirations of different ethnic groups may arise. In some federations the entire jurisdiction is relatively homogeneous and each constituent state resembles a miniature version of the whole. On the other hand, multi-national and multi- linguistic federalism exists where different states or provinces possess distinct ethnic groups or languages.

5. Similarly two or more than two province may share a common border. The conflict among them arises regarding the development of border area. One province passes the task of development of common border to another and vice versa. Similarly internal protection and pollution related subjects may be the sources of  conflicts in the border area.

There should be constitutional mechanism for conflict resolution in federal government system. The ability of a federal government to create national institutions that can mediate differences that arise because of ethnic, linguistic, religious, or other regional differences is an important challenge. The inability to meet this challenge may lead to civil war, as occurred in United States and Switzerland. In case of Soviet Union and Yugoslavia, internal conflict led a federation to dissolution. However this type of conflict can lead to secession in unitary state too as occurred in Indonesia, Serbia, Cyprus, etc.

6. Conflict Resolution Mechanisms

In the federal system of government, there will be formation of two or more than two system of Government. No matter how successfully the rights are divided among the federal units there may arise problem in the use of those rights, which gives rise to conflicts and disputes. These types of conflicts should be solved by mutual understanding and cooperation. Conflict could inter-personal, intra-institutional, inter-states, between the rulers and the ruled, and the rich and the poor. In all of these conflict scenarios, federal countries had different mechanisms which went into managing and solving conflict. Behind the various mechanisms of conflict management and resolutions, there existed some accepted principles. For smooth running of the country it is necessary to solve these conflicts.

In some federal countries, central government has taken the responsibility of solving disputes among the states. In some countries, conflicts are solved by senate. Proper laws should be made and implemented to avoid any kind of disputes. Moreover, if the disputes arise, some authorities should be given responsibility to act as mediator to solve them and maintain peaceful and friendly relationship among the provinces. In some countries, tribunals are authorized to settle the disputes, whereas in some countries the conflicts are solved by the court. Often, as is the case with the United States, the pioneer of modern federation, such conflicts are resolved through the judicial system, if not solved by political means. However, the relationship between federal and local courts varies from country to country and can be a controversial and complex issue in itself.

In Canada, conflicts among the provinces are solved by First Minister Conference, Annual Premiers Conference, Ministerial Council, Supreme Court, etc. whereas in Germany, conflicts are solved by Minister’s and President’s meeting, Constitutional Court, Association of Representatives of all the Landers, etc. Similarly in Australia, Senate, Council of Australian Government and Court are taken as mechanism for solving disputes among the provinces. In America, the conflicts of constitution and legal matter among the states are solved by the Supreme Court on the basis of legal provisions whereas environmental, labor, pollution related matter are solved by federal agency. Some of the matters are solved by political mechanism also. In our neighboring country India, the conflict between central and state government, conflict between state and state, or conflict between more than two states are solved by the Supreme Court. Zonal Council and Inter State Council also help in solving the conflicts. But In South Africa, the conflicts regarding the constitutional order, rights are solved by the constitutional court and other kinds of disputes are solved by federal mechanism formed specially for this purpose.  The system of referendum was introduced as the final verdict of people in Switzerland.

Above international experiences shows that there should be proper and effective mechanism to solve the conflicts among the provinces for smooth running of a federal country. In case of Nepal, the following mechanism should be established for smooth relation among center and provinces, and inter -provinces:

1.      Dialogues: The conflicts among the federal units can be solved by political bilateral and multi-lateral dialogue at the primary stage. Mediator can be appointed if needed.

2.      Political mechanism: Mechanism such as National Assembly i.e. Senate, can be formed to settle the disputes between the center and the provinces, Inter Provincial Council can be formed to settle inter-provincial disputes respectively, and Provincial Legislative can be formed to settle the local conflicts.

3.      Judicial Mechanism such as Constitutional Court for constitutional disputes, Supreme Court for civil disputes and Provincial high Court for special autonomous area, protected area and local disputes. If a state is unable to solve the disputes by political means, then it should take legal help.

4.      Referendum as a last resort of political disputes should be granted. The conflicts among the federal units might not be solved by political mechanism and judicial method. In that case referendum should be done.

In conclusion, we can say that in federal units, there may arise problems in the use of rights and resources which may give rise to conflicts and disputes. These types of conflicts should be solved firstly by mutual understanding and cooperation through dialogue and political mechanism. If they are unable to solve the conflicts by mutual understanding then only it can follow legal process. Countries like United States of America, Canada, Australia, Germany, India, and South Africa have this provision. In some federal countries, the conflicts are solved by Senate or Council of Representatives of all the provinces. In Belgium and Ethiopia, the right of solving dispute is given to senate or federal council. Likewise, inter-government disputes are solved by means of constitutional or federal judiciary in most of the federal states. In the same way, disputes between citizen of one province and another province are supervised by Central judiciary. Finally, rights of solving disputes should be given to sovereign people if not solved by any measures mentioned above. This type of system is there in country like Switzerland where referendum is done on the basis of  the government’s decision and/or people’s initiative.

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