Tsebelis G. Veto Players: How Political Institutions Work

Подождите немного. Документ загружается.

201

202

CHAPTER 6: FEDERALISM, BICAMERALISM, AND QUALIFIED MAJORITIES

The term “federal” is used for countries where: “ 1. two levels of government rule the

same land and people. 2. each level has at least one area of jurisdiction in which it is

autonomous, and 3. there is some guarantee (even though merely a statement in the constitution)

of the autonomy of each government in its own sphere.” (Riker 1964: 11)

Researchers have focused on the effects of federalism on different policy outcomes, both

at the theoretical and the empirical level. However, little agreement has emerged. For example,

with regard to one of the most intensely studied matters in political economy, fiscal federalism

there is no agreement whether decentralization has beneficial consequences or not. Riker (1975:

144) has made the argument that there should be no policy differences between federal and

unitary countries, while Rose-Ackerman (1981) and Dixit and Londregan (1998) provide

arguments why legislation will be different in these two types of states. In terms of the direction

of potential differences, on the one hand scholars like Tiebout (1956), Buchanan (1950), Oates

(1972) and Weingast (1995) have described economic benefits of decentralization. On the other

hand, Davoodi and Zou (1998), Prud’homme (1995), Tanzi (1995) and Treisman (2000a and b)

point out to problems associated with decentralization. Most of this literature is examining the

(beneficial) results of economic competition among states.

This book takes a different tack on federalism. I focus on the institutional structure of the

federal government. There I observe frequently at least one of two different features: either the

use of bicameralism with a second chamber having effective veto power over legislation, or the

use of qualified majorities in policymaking. I argue that each one of these two institutional

structures generates more veto players, so that federal countries have ceteris paribus more veto

players than unitary ones. As a result, federal countries will exhibit higher levels of policy

203

stability, as well as the other structural characteristics (independence of judiciary, of

bureaucracies, and government instability if they are parliamentary) that follow the existence of

multiple veto players.

While bicameralism (with effective veto of the second chamber) and qualified majorities

are more frequent in federal countries, they are not exclusively used by them. For example, Japan

has an upper chamber with the right to veto legislation proposed by the lower one although it is

not a federal country. Similarly in France (a unitary country) the government has the power to

decide whether a bill will be decided by agreement of both chambers, or whether the lower

chamber will overrule the upper one. Similarly with qualified majorities, while they may not be

constitutionally required in many countries, they frequently become the result of the political

game as we will see in the third section of this chapter. Since neither of these two features is

necessarily linked with federalism, I will study them independently of each other and federalism.

The chapter is divided in four parts. The first discusses why federalism has been such an

elusive independent variable, and focuses on its implications on veto players. The second

discusses bicameral institutions. The third analyses qualified majority decision-making. The

fourth addresses the combination of bicameralism and qualified majorities.

I. Federalism

Several analyses have pointed out important characteristics that unite or separate federal

countries. For example, all federal countries involve constituent units which compete with each

other for the attraction of citizens (Tiebout 1956). On the other hand, some federal countries

have agencies for implementation of national policies at the federal level (US) while others at the

local level (EU, Germany).

In this part I will concentrate on two issues, fiscal federalism and

veto players. Fiscal federalism dominates the economics literature. Here I argue that while the

204

theoretical arguments in favor of decentralization may seem compelling, the empirical evidence

does not seem to support these theories. The second is derivative of the veto players approach

developed in this book: I focus on the institutions that most frequently prevail in different federal

countries.

a. Fiscal federalism

On the basis of Riker’s definition cited above federalism is a balance between constituent

units willing to participate in the federation (and not depart from it), and the central government

not taking away their autonomy. If either one of these conditions does not hold, the federation

will collapse (either transform itself to a group of independent states, or become a unitary state).

However, Riker (1975: 144) did not believe that there would be policy differences between

federal and non-federal countries because of this balance between center and periphery. In fact,

he proposed a thought experiment where eight pairs of countries (one of these pairs was

Australia and New Zealand) were divided by the “federalism” variable but had very similar

policies in most dimensions.

But economists studying federalism pointed out two important differences between

federal and unitary countries. First, Hayek (1939) suggested that because local governments and

consumers have better information about local conditions and preferences they will make better

decisions than national governments. Second, Tiebout (1956) focused on the effects of

competition among jurisdictions since people can “vote with their feet” and argued that

federalism provides people with the choice among different menus of public goods.

However these early approaches ignored the question of incentives of politicians to

provide public goods and preserve markets. Weingast (1995: 24) focused on the following

fundamental problem: “Markets require protection and thus a government strong enough to resist

See an excellent article by Scharpf (1988) on the issue.

205

responding to the inevitable political forces advocating encroachments on markets for private

gain. The fundamental political dilemma of an economic system is that a state strong enough to

protect private markets is strong enough to confiscate the wealth of its citizens.”

This problem of production of institutions strong enough to produce certain desirable

outcomes, yet not able to abuse their strength has appeared several times in the literature. For

Przeworski (1991: 37) stable democracy “requires that governments be strong enough to govern

effectively but weak enough not to be able to govern against important interests.” For Weingast

(1997) the rule of law is another mechanism that provides for strong but limited governments.

For the founding fathers of the American Constitution checks and balances was such a

mechanism. For Ackerman (2000) it is a limited separation of powers (that as I argued in the

introduction is a limited number of veto players). Weingast applied the same analytic approach

to the issue of federalism, and created the concept of “market preserving federalism.”

Market preserving federalism adds three characteristics on Riker’s definition of political

federalism: “1. Subnational governments have primary regulatory responsibility over the

economy; 2. a common market is ensured, preventing lower governments form using their

regulatory authority to erect trade barriers against the goods and services from other political

units; and 3. the lower governments face a hard budget constraint, that is, they have neither the

ability to print money nor access to unlimited credit” (Weingast 1995: 5 emphasis in the

original).

The originality in Weingast’s analysis is that the conditions of market preserving

federalism are explicitly introduced as opposed to being derived as characteristics of federalism.

So, in Weingast’s analysis not all federal countries present or tend towards these characteristics,

while in other more theoretical analyses fiscal competition increases the cost of a financial

206

bailout and consequently serves as a commitment device for the federal government, and the

combination of monetary centralization and fiscal decentralization hardens the budget constraint

(see Qian and Roland 1998). For Weingast in contrast, countries like Argentina, Brazil, and India

while federal are not market preserving federal countries and have low economic performance.

Unfortunately, Weingast has not yet produced a list of countries that meet his “market

preserving federalism” criteria. The classification of countries in this category is not

straightforward because the US, according to Weingast’s analysis, qualifies as “market

preserving” only up to the 1930s, while contemporary China qualified by Weingast as market

preserving federalism is not federal, strictly speaking. As a consequence, Weingast’s intuitions

cannot be tested directly. However, empirical analyses of economic performance of federal

systems seriously questions the conclusions of economic analyses (at least of the first generation:

Hayeck(1939), Tiebout (1956) and Oates (1972)). In the most recent of these empirical analyses,

Treisman (2000b) creates a data set including 154 countries and defines five different types of

decentralization depending on the political institutions prevailing in a country, the number of

tiers that different units can be classified, the size of the lower level units, etc. His conclusions

are that countries with higher level of decentralization have higher levels of corruption, and

lower levels of provisions of public goods indicating “quality of government” like children

inoculation and reduction of adult illiteracy. He concludes: “The Tieboutian idea that decreasing

the size of government units will strengthen competition between governments for capital, thus

stimulating greater efficiency and honesty, is not supported. Countries with smaller first-tier

jurisdictions tended to be perceived as more corrupt” (Treisman 2000b: 1). The same result holds

with other measurements of decentralization as well: decentralization and corruption are

positively correlated in Treisman’s data.

207

b. The institutions of federalism

Riker’s definition of federalism has been the starting point for the study of the institutions

of federalism. Hicks (1978: 175) uses essentially Riker’s definition and takes his points one step

further in terms of their institutional implications: “If we agree that a federal system has the dual

purpose of creating a nation and preserving the identity of its units, it is clearly essential that

Constitution and institutions must be appropriately devised for both purposes….. The

Constitution will provide for: (1) a probably large Assembly representative of all citizens and

chosen from the units (or States), most likely in proportion to their relative populations; (2) a

House of States or Senate, considerably smaller but normally providing strictly equal

representation of all States…”

Similarly, Bednar, Eskridge and Ferejohn (2001: 9) discuss the institutional design of

federalism: “Opportunism by the national government is best constrained by fragmenting power

at the national level. By making it harder for a national will to form and be sustained over time,

these mechanisms will tend to disable national authorities from invading state authority,

especially as to controversial political issues (the most tempting target for national cheating on

the federal arrangement). The foregoing fragmentation may be accomplished through a formal

system of separation of powers and extra requirements (such as bicameral approval and

presentment to the chief executive for veto) for legislation” They also point out the significance

of two additional mechanisms: one informal, the fragmentation of the party system

and one

formal, an independent judiciary to control federal opportunism. Let us discuss these three

mechanisms one at a time.

Most analysts associate federalism with “strong bicameralism” (to use Lijphart’s

According to Bednar, Eskridge and Ferejohn this fragmentation is produced by the appropriate electoral system.

As we saw in Chapter 3 other mechanisms (the lack of vote of confidence in Presidential systems) can also produce

fragmentation.

208

terminology), that is, a system where the second chamber has formal veto and does not have the

same composition as the first one. Indeed, most federal countries have such a strong second

chamber. What is not well known is that the bicameral constitutional form, which after the

adoption of the US Constitution became very frequent in federal countries, was not the first

institutional arrangement characteristic of federalism. European federations like the United

Netherlands, the Swiss Cantons, and the German Confederation were deciding by bargaining

among the representatives of the different states (Tsebelis and Money (1997: 31). On the basis of

these experiences Montesquieu’s ideal confederal republic was an association of small

homogenous states making decisions by unanimity (Inman and Rubinfeld (1997: 76)), while

Condorcet’s way of avoiding the problems of majority cycling that he had discovered was

decision-making by qualified majorities (Tsebelis and Money (1977: 38)).

In philosophical terms, Montesquieu’s conception of federalism was based on the small

units that represented similar preferences, and the unanimity or qualified majority rule that

reduced the probability of imposition of one state’s preference on another. For Condorcet,

bicameralism did not have any advantage that could not be achieved in an easier and more secure

way by qualified majorities in one chamber.

Madison developed his model of the federal republic set forth in The Federalist

(especially 10 and 51) by criticizing the vices of the articles of the confederation, with respect to

two main weaknesses: “first, the external and internal weaknesses of a government based on a

compact among number of small sovereign republics; and second, the heart of his case, the

In “Lettres d’un bourgeois de New –Haven a un citoyen de Virginie” (written in 1787) he claimed: “But it is easy

to see (and this matter can be rigorously demonstrated) that there is no advantage, with respect to the truth of

decisions, in multiplying the legislative bodies, that one would not get in a simpler and more secure way by asking

for a qualified majority in one chamber.” (Condorcet (1968 vol 9: 76) my translation from the original). In other

parts of his work he gave examples of what one can call type I and type II problems of bicameralism: If a decision

needs to be made by simple majority it might be frustrated by the lack of congruent majorities in two chambers, and

if a decision requires a qualified majority it may be obtained with a lower number of votes in a bicameral system

209

danger of majority tyranny within such small states. These two lines of argument controvert the

two elements of Montesquieu’s model of confederate republic: the compact solution and the

small republic theory. The remedy for both failings Madison finds in the sovereignty of the

people in the large compound republic” (Beer 1993: 245). Madison’s argument also contradicts

Condorcet’s analysis which provides equal weight to all possible majorities or qualified

majorities, a point that we will return to in the conclusions of this chapter.

Consequently, both qualified majorities and bicameralism have been used as bases of

federalism, but over time, it is the second that replaced the first. In contemporary federations, the

European Union has employed qualified majority (or unanimity) decision-making to guarantee

the preferences of its members. In fact, in the period before the European Parliament was elected

(1979), and before it received formal powers (1987), qualified majority or unanimity decision-

making in the Council was the only mechanism protecting the interests of countries members.

Since 1987 the EU applies a combination of bicameralism and qualified majorities (see Chapter

11). As we will see in the fourth section of this chapter, the US uses a similar combination of

qualified majorities and bicameralism for political decisionmaking. In fact, it would probably be

more appropriate to discuss “multicameralism” instead of bicameralism in the case of the US and

the EU, because besides the two parliamentary institutions (the two houses in the US case, and

the Council and the Parliament in the EU case) there is a third actor with veto powers: the

President in the US, and the Commission

in the EU.

Why do qualified majorities and bi- or multi-cameralism increase the number of veto

players? Because if we consider the legislature of a country as a single collective veto player

deciding by majority rule, then both bicameralism and qualified majorities introduce additional

(“Est-il Utile de diviser une Assemblee nationale en plusieurs chambers?” in Condorcet (1968 vol. 9: 333-63)

For exceptions and more detailed discussion see chapter 11.

210

constraints, by specifying that some or all of the simple majorities are not sufficient to make a

decision. As a result, some parts of what used to be the winset of the status quo are not valid

anymore, and the winset of the status quo shrinks.

INSERT FIGURE 6.1

Figure 6.1 provides the answer for the case of bicameralism. Suppose that there were six

actors in a parliament, and consequently, four of them were necessary for a majority decision.

Any combination of four out of the six players would be sufficient to replace the status quo. Now

suppose that we divide the six initial players into two groups, the group L1, L2, and L3

(representing the lower house), and the group U1, U2, and U3 (representing the upper house). If

the requirement for a replacement of the status quo becomes congruent majorities in the two

houses, some of the previous majorities (like (L3U1U2U3) in the figure) are now invalidated,

because they do not represent majorities in both houses. Figure 6.1 shows the winset of a

bicameral system with dark shade, and the winset of a unicameral but not bicameral legislature

with light shade.

A similar argument can be made if instead of bicameralism one would introduce qualified

majorities. If we consider the case of a 5/6 qualified majority, Figure 6.1 demonstrates that the

winset of the point selected as status quo is empty. There is no coalition including five out of the

six players that agrees to a replacement of the status quo. In the sections that follow I will focus

on each one of these methods of increasing the number of veto players: bicameralism and

qualified majorities.

A different mechanism that “makes it harder for a national will to form and be sustained

over time” according to Bednar, Eskridge and Ferejohn is the fragmentation of the party system.

The idea that a fragmented party system will not be able to decide or to sustain its decisions may