In federal states, power is distributed between two levels of government (Elazar, 1987; Hueglin & Fenna, 2015; Riker, 1964; Watts, 2008). Each government has the right to collect its own taxes and to provide public services in specific areas (Watts, 2008). Nevertheless, this division of power is never neat, and governments are mutually dependent in many regards. Because responsibilities overlap and since many public issues cut across several policy areas, most policy problems concern several governments of a federation at the same time. Though being typically assigned to the constituent units, education, for example, has become relevant to the economic competitiveness of a federation, for which the federal government is generally responsible. These interdependencies have increased in the course of the twentieth century and they are often unavoidable (Watts, 2008, p. 122).
Policy problems that touch upon the responsibilities of several governments in a federation not only pose a challenge for the efficient delivery of public services, they also affect a federal systemâs stability. One of the fundamental features of federalism is that changes to the distribution of power require the consent of both levels of government (Watts, 2008, p. 9). Governmentsâ autonomy builds on the division of authority and discretion on which federalism relies. Each government enjoys genuine powers that are not delegated from one government to another. Governments are only accountable to their electorateâfrom which they gain their legitimacyârather than to each other.1 Powers can therefore not be withdrawn unilaterally by another level of governmentâwhich is why they must jointly agree on the way power is distributed among them (Elazar, 1987; Riker, 1964).
Unilateral policy solutions in situations in which governments are mutually dependent, however, may limit the other governmentsâ autonomy, so that they lose power without giving their consent. Rating agencies, for instance, assign individual ratings in reference to ratings of other governments of the federation, especially the federal governmentâs (Eyraud & Gomez Sirera, 2015; Inman, 1996). If a government refuses to consolidate its budget, other governments may therefore not be able to fully access the credit markets, which limits their discretion to borrow to finance their policies (Braun, Ruiz-Palmero, & Schnabel, 2017). Yet, because they seek to maximize their benefits and minimize the costs, governments face incentives to enact policy solutions unilaterally (Bednar, 2009). A prominent example of such behavior is the fiscal indiscipline of the constituent units (Braun et al., 2017; Rodden, Eskeland, & Litvack, 2003). Constituent governments that expect to be bailed out by the federal government, should their solvency be at risk, are likely to run deficits without considering the implications their overborrowing has on the financial situation of the federation as a whole since they do not have to internalize the costs of a fiscal crisis. To enforce fiscal discipline and avoid bailouts, the federal government, in turn, might impose a fiscal rule on the constituent units even against their will. Another example of unilateral policy making is the decision of Canadaâs federal government to fund research through the Canada Research Chair program that required the provinces to provide the necessary infrastructure to the holders of a Canada Research Chair at the universities they run. The provinces had no say in the establishment of the program.
Unilateral solutions to policy problems cutting across jurisdictions lead to changes in the distribution of power because they shift authority and discretion from one level to another without the consent of all governmentsâthough the degree of such disruptive unilateralism may vary. Policy problems affecting more than one government (especially when they are salient and politically loaded) thus destabilize a federationâunless governments meet to develop joint policy solutions. Collaborative solutions can alter the distribution of power, but these changes are agreed upon by all federal actors. When governments jointly develop, adopt, and implement policy solutions to problems affecting all of them, they avoid the unwanted amendments of the distribution of power that may lead to federal instability.
As a consequence of their interdependent relationship, governments have indeed come to interact. Intergovernmental relations, that is the processes and institutions through which the governments of a federation coordinate public policy making, have become the âworkhorse of any federal systemâ (Cameron, 2001, p. 121). Whereas many intergovernmental interactions occur informally, intergovernmental councils have been established in federations across the world, especially since the second half of the twentieth century, to give intergovernmental relations a formal structure. Most intergovernmental councils have been created by a political decision of the federal government and/or the constituent units. Some, however, even owe their existence to the federal constitution or the passage of legislation mandating their creation.
Intergovernmental councils are more or less regular meetings of the different governments of a federation. At these meetings, governments establish policy solutions to problems they are all confronted with (Behnke & Mueller, 2017; Cameron, 2001; Watts, 2003). Intergovernmental councils comprise high-level politicians such as prime ministers or cabinet ministers that âshare information, discuss common problems, contemplate co-ordinated or even joint action and where appropriate establish joint bodies or agenciesâ (Watts, 2003, p. 4). Meetings of (senior) officials can also be part of an intergovernmental council in which case they serve the purpose of preparing or implementing decisions of a councilâs plenary assembly, which consists of politicians.2 Different types of intergovernmental councils exist (Bolleyer, 2009, pp. 17, 69â70; see also Cameron, 2001). Based on membership, one can distinguish between vertical councils comprising the federal government and the constituent units, and horizontal councils in which the federal government does not participate, as well as between national, multilateral, regional, and bilateral councils depending on the number of constituent units participating.3 Furthermore, while policy-specific councils focus on a specific area and consist of ministers, generalist councils discuss cross-sectoral policy issues and generally involve prime ministers or governors.
The literature on intergovernmental relations has long acknowledged that these councils boost federationsâ policy making capacity (e.g., Bolleyer, 2009; Cameron & Simeon, 2002; LeĂłn & FerrĂn Pereira, 2011; Poirier & Saunders, 2015b; Simeon, 2006; Watts, 2003). This book argues that they fulfill yet another purpose. By avoiding that governments solve policy problems unilaterally when they concern several federal actors, intergovernmental councils can enhance a federal systemâs stability. Therefore, intergovernmental councils constitute a safeguard of federalism. They are one of the political institutions that maintain federalism because they incentivize the governments of a federation to respect each otherâs autonomy (Bednar, 2009). Federal safeguards prevent the federal government from encroaching on constituent unitsâ responsibilities and from shifting costs to them, and discourage the constituent units to shirk on their duties or shift burden on their part (see also Behnke & Mueller, 2017). As Bednar (2009) has argued, federalism is sustained by political institutions. Informal coordination processes are, therefore, not enough to ensure that governments coordinate public policy making in such a way that respects the federal balance of power. Intergovernmental councils, as the formal structures of intergovernmental relations, however, are able to shape governmentsâ decisions in this way. Put differently, only institutions can create the commitment of political actors that is necessary to uphold the federa...