Patterns of Democracy by Arend Lijphart

Author:Arend Lijphart [Lijphart, Arend]
Language: eng
Format: epub
Publisher: Yale University Press
Published: 2012-09-11T05:00:00+00:00

OTHER INDICATORS OF FEDERALISM AND DECENTRALIZATION

Does the index of federalism express the properties of federalism and decentralization accurately and reliably? Confidence in the index can be strengthened by comparing it with a few other indicators that scholars have proposed. They cannot be used as alternative measures in this study, however, because most of them focus on either the federal-unitary or the centralization-decentralization contrast—unlike our index of federalism and decentralization that includes both of these characteristics—and/or because they are not available for all of our thirty-six democracies.

A widely used measure of centralization is the central government’s share of a country’s total tax receipts. It is based on the reasonable assumptions that the relative powers of the central and noncentral governments can be measured in terms of their resources, especially tax revenues. Noncentral taxes are the taxes collected by the noncentral governments for themselves plus those shares of taxes collected by the central government that accrue automatically to noncentral governments. Government centralization can then be measured as the central governments’ share of total central and noncentral tax receipts. However, there are major problems concerning the degree of discretion that noncentral governments truly possess. For instance, do “automatic” transfers exclude any influence by the central government on the purposes for which these funds can be spent? Jonathan Rodden (2004, 484–85) suggests that all transfers and grants be excluded and that only “own-source revenues” be used as an indicator of noncentral government autonomy. Even so, he cautions, own-source revenues can still severely overestimate the extent of non-central revenue autonomy: “While subnational governments may collect the revenues labeled as own-source, the central government may nevertheless maintain the power to set the rate and the base, leaving the subnational governments as mere collectors of centrally determined taxes.”

In spite of these problems, it is useful to compare fiscal centralization data, available for twenty-eight of our countries, with the index of federalism and decentralization (Woldendorp, Keman, and Budge 2000, 34–35). The correlation coefficient is a strong −0.56. An alternative indicator is Siaroff’s (2009, 218–21) measure of “relevant regional governments” for a large number of countries, including our thirty-six democracies. It is a simple three-point index based on the author’s impressionistic but plausible judgments. Here the correlation coefficient is an extremely strong 0.89. A measure that is based exclusively on the federalismunitary contrast is Gerring and Thacker’s (2008) “nonfederalism” index, also on a three-point scale and available for all of our countries. The correlation coefficient is −0.73. Finally, Woldendorp, Keman, and Budge’s (2000, 34–36) “autonomy” index does take both decentralization and federalism into account. It is a nine-point scale with data for twenty-eight of our countries; the correlation is again strong, with a coefficient of 0.83. All of the strong correlations mentioned in this paragraph are statistically significant at the 1 percent level.

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