The real promise of federalism: A case study of Arendt’s international thought

For Hannah Arendt, the federal system is an effective mode of organizing different sources of power while avoiding sovereign politics. This article aims to contribute two specific claims to the bur..

Dutch Disease, Factor Mobility Costs, and the ‘Alberta Effect’ – The Case of Federations

Do reduced costs of factor mobility mitigate ‘Dutch Disease’ symptoms? The case of federations provides an indication for this. By investigating ‘Resource Curse’ effects in all federations for which complete data is available at the regional level it is observed that within federations resource abundance is more of a blessing than a curse (while between them the curse remains). In addition, it is also shown that federations with relatively worse institutional quality experience amplified reversed ‘Resource Curse’ effects within them, so that results are not driven by good institutions. A theory is then presented in an attempt to explain the difference between the cross-federal (and previous cross-country) results of the ‘Resource Curse’, and the intra-federal ones presented initially. It is argued that the reduced factor mobility costs within federations (compared to the costs of cross-country mobility) trigger an ‘Alberta Effect’ which mitigates ‘Dutch Disease’ symptoms, so that ‘Resource Curse’ effects do not apply within federations, and are even reversed. Thus, this paper demonstrates and emphasizes the significance of the mitigating role of factor mobility; also, it highlights the relative importance of ‘Dutch Disease’ theory (compared to the ‘institutions’ perspective) in explaining the ‘Resource Curse’ phenomenon. The paper concludes with empirical evidence for the main implications of the model, taking the United States and Canada as case studies.Natural Resources, Economic Growth, Factor Mobility, Dutch Disease, Resource Curse, Tax Competition, Spatial Economics

Dutch disease, factor mobility costs, and the ‘Alberta Effect’ – The case of Federations

Do reduced costs of factor mobility mitigate ‘Dutch Disease’ symptoms, to the extent that they are reversed? The case of federations provides an indication they do. By investigating 'Resource Curse' effects in all federations with available state-level data, it is observed that within federations resource abundance is a blessing, while between federations it is a curse, similar to results observed in previous cross-country studies. A theory is then presented in an attempt to explain the opposite results of the intra and cross federal (and previous cross-country) analyses. It is argued that the reduced costs of factor mobility within federations trigger an ‘Alberta Effect’ –where resource abundant regions exploit the fiscal advantage, provided by resource rents, to compete more aggressively in the inter-regional competition over capital, and as a result attract vast amounts of capital– which in turn mitigates, and even reverses, ‘Dutch Disease’ symptoms, so that ‘Resource Curse’ effects do not apply. Thus, this paper emphasizes the significance of the mitigating role of factor mobility in 'Dutch Disease' theory, and presents a novel mechanism (the ‘Alberta Effect’) through which this mitigation, and possible reversion, process occurs. The paper concludes with empirical evidence for the main implications of the model, taking the United States as a case study.Natural Resources, Factor Mobility, Dutch Disease, Resource Curse, Tax Competition, Economic Growth

Federal State-building, asymmetric federalism and European integration: the case of the Eurozone

This thesis aims at answering the following questions: To what extent does the Eurozone represent a federal political system; to what extent does the EU’s monetary integration through the Eurozone represent a process of federal state-building; and to what extent can the Eurozone represent a case of asymmetric federalism? In this thesis, federalism is described as a process of state-building, and more precisely, the theory of replicating the features of states, in particular federal states, (and thus, of, federal state-building), to include the presence of a common market, foreign policy, trade policy, and monetary policy. The Eurozone was selected as a case study, as it represents the most integrated case of federal state-building; and the economic and monetary policies as the policy areas of the Union most echoing the traditional elements of states, although the Eurozone it is not itself a state. The thesis highlights the process of monetary integration and how this has been a de facto attempt, sometimes in a more Europeanised fashion, sometimes with just an intergovernmental outcome, to tackle the sovereign debt crisis in a way which vindicates the federalist arguments. In the conclusions I argue that while the specific case of the Eurozone does not represent a federal political system per se, it remains the most important example of federal state-building at the supranational level. Additionally, I argue that the presence of many typical elements of federal states are indeed a confirmation that the process of European integration is, above all, one of federal state-building, with all its complexities and specificities

Island jurisdictions in comparative constitutional perspective

Island jurisdictions, even more than their mainland counterparts, are gripped by dual and seemingly contradictory pressures for both autonomous self-government, on the one hand, and for political partnership on the other. The need to balance these two sets of pressures is an ever-present fact of life for island communities, whether sovereign or not.peer-reviewe

Sovereign Wealth Fund and Challenges of Fiscal Federalism in Nigeria

Following the passage of the Nigerian sovereign investment authority Act 2011, by the National Assembly, the federal Government acting pursuant to the Act, set up the fund. It is customary for the government to distribute all revenue accruing to her in the Federation Account between the federal, state and local government councils according to a set formula. The establishment of the sovereign wealth fund received attacks and protest by the governors of the federating states, thus, raising the unsettled question of the concept of federalism in Nigeria. The view of many is that the concept of the Nigerian federalism is not determined by the judicious power and revenue sharing formula, rather by the result of the imposed federal system of government by the colonial master and the subsequent military regimes is the base for the frequent disputes and quarrels between the states and federal government in some national issues. The formation of the Governor’s forum as an association of all the governors in Nigeria is to protect the states from the political and fiscal interference of the federal government. By virtue of the provision of the constitution, the concept of federalism was entrenched in that the sovereignty of the nation was divided between the federal, states and local governments. The exercise of the legislative and executive powers by the federal system, particularly, as these powers touch on the sharing of the country’s revenue between the federating units. And at several occasions, attempts were made by the federal government through the National Assembly negating the principles of true federalism. This review has attempted to highlight on related concepts, legal base for Nigeria’s fiscal federalism and its challenges. It also provides an analytical framework linking it to a suitable theory. The significant finding of the study is the fact that there is an imbalance in the federal system and structures of federating units in Nigeria. The implication of the finding is that there will continue to be a developmental lacuna and ethnic squabbles among the federating units if the imbalances are not corrected. Recommendations were also offered to ameliorate the imbalance system and establishment of the fund. Keywords: Sovereign Wealth Funds, Fiscal Federalism, Ethnic Squabbles, Federating unit, African Continent, Financial Management and Accounting

Understanding the EU Policy Portfolio: Conceptualising a Dynamic Model of Integration

This paper suggests that EU‘s policy portfolio resembles the outcome of interstate bargaining predicted by federalist theory. We conclude that federalist theory, when combined with economic integration theory, is a robust tool for conceptualizing the EU policy portfolio. The result is a dynamic model, which we call 'federal integration‘

The dilemma of fiscal federalism: grants and fiscal performance around the world

This paper uses cross-national data to examine the effects of federal fiscal and political institutions on the fiscal performance of subnational governments. Balanced budgets among subnational governments are found when either (1) the center imposes strong borrowing restrictions or (2) subnational governments have both wide-ranging taxing and borrowing autonomy. Large and persistent aggregate deficits occur when subnational governments are simultaneously dependent on general-purpose intergovernmental transfers and free to borrow-a combination found most frequently among constituent units in federations. Time-series cross-section analysis reveals that as countries increase their reliance on transfers over time, subnational and overall fiscal performance decline, especially when subnational governments have easy access to credit. These findings illuminate a key dilemma of fiscal federalism and a more precise notion of its dangers: When constitutionally constrained or politically fragmented central governments take on heavy co-financing obligations, they cannot credibly commit to ignore the fiscal problems of lower-level governments.Departamento de Economí

The German sub-national government bond market: evolution, yields and liquidity

The paper presents a comprehensive data set of all bonds issued by the sixteen German states (L¨ander) since 1992. It thus provides a complete picture of a capital market comparable in size to funds raised in the German fixed income market for corporations. The quantitative analysis reveals that L¨ander follow different issuing strategies: while some concentrate to a greater extend on large issues or issue joint bonds with other L¨ander (Jumbos), others rely more on comparatively small but frequent issues. Moreover, some L¨ander issue a significant volume-share of their bonds in foreign currencies. Suitable bonds are used to compute yields for the respective L¨ander at a daily frequency. In addition, we construct a measure of liquidity based on the standard deviation of yields of those bonds that are used to compute the average yield. --sovereign bond market,yields,liquidity,fiscal federalism,Germany