3 key facts about federalism around the world

The basic rule in comparative political analysis is to make sure one is comparing comparable countries. Otherwise, one runs the risk of comparing apples and oranges -- a common practice that isn’t only analytically erroneous, but perilously disingenuous.

In fact, this is among the first lessons that one is taught in basic political science courses in any modern university and by any conscientious teacher. To my displeasure, it seems nowadays, amid the debate on Charter Change, some folks are more than eager to highlight the success of developed nations such as Germany in order show that federalism is supposedly the path forward for our country, if not a magic formula for our national conundrum.

The problem with this line of analysis is that it’s both erroneous and misleading. A more accurate comparative approach would instead look at federalism experiences in the developing world, to which the Philippines belongs. In short, we should first look at comparable countries, not pre-selected examples that are hardly comparable to our conditions.

Third world federalism

Let’s look at Federalism in the developing world. The list is pretty interesting and quit sobering, since it includes both ancient and new, capitalist and state-driven, and large and small nations, which range from Iraq, Sudan, Somalia, and Ethiopia to Nigeria, Pakistan, Venezuela, and Brazil, among many others.

They are a diverse range of nations with various permutations of federalism, but a cursory look at these countries reveals two things. First, persistently high levels of inequality within and among their federal states, not to mention extreme poverty and hunger even among rapidly developing countries such as India, Brazil and Nigeria.

Double-taxation, bureaucratic inertia, and high levels of developmental unevenness are more than persistent in even the most successful federalist experiences in the developing world.

Many of these countries have had federalism for decades, but it’s far from clear whether that has brought about any significant and directly positive effect on national economic development. Federalism is obviously not the root of all their problems, but it’s unclear whether it has helped solve their economic problems either.

Second, most of these countries continue to be wracked by ethnic divisions, micro-nationalist and secessionist movements, and outright civil war in cases such as Iraq, Somalia, and Sudan, which split into two nations in 2011. In the case of former Yugoslavia in Eastern Europe, the country eventually fell apart, descending into genocidal civil war among Serbs, Coats and Bosnians.

Iraq is a cautionary tale, since federalism has simply reinforced pre-existing ethnic-religious divisions in the country, which partly explains the rapid rise of the so-called Islamic State (IS) in Sunni provinces in the west and constant power struggle between Arab Baghdad and Kurdish Erbil in the east.

Similar ethnic and micro-nationalist tensions are present across almost all developing federalist countries mentioned above. Far from resolving the country’s internal divisions, federalism simply reified and reinforced them.

There are clearly lessons for ethnically divided nations such as ours. As one recent academic study emphasizes, “The greatest risk is that federal arrangements can offer opportunities for ethnic nationalists to mobilize their resources,” leading to further fragmentation of already-divided societies.

Exceptions, not rule

Now let’s talk about more straightforward success stories such as Germany.

First of all, the Philippines and Germany have completely different historical background and levels of institutional development.

It goes without saying that I am all for emulating best practices around the world, especially learning from Germany’s impressive green energy agenda (Energiewende) and trade and industrial policies, which explain its massive economic success and resiliency even in a stagnating Europe.

But to imply or even argue that what works in the world’s leading industrial power will automatically work in a poor, developing country is both unhelpful and misleading.

One should keep in mind that federalism was organic to Germany’s formation. Its federalist structure is rooted in centuries of division and diversity among Germanic states -- until the Prussian monarchs began to consolidate a growing number of them under one flag -- as well as a deep aversion to Hitler-like figures, which abused excessive concentration of power in the office of the chief executive.

Many regions of modern Germany such as Bavaria were already well-established polities with their own defined state institutions, customs, and collective memories.

It’s also the byproduct of the difficulties of absorbing former Eastern Germany, which was under Communist rule for four decades.

Federalism was a sine qua non, therefore, for establishing a semblance of national unity, if smaller polities were ever willing to join a large union. For those who are familiar with German federalism, they are more than aware of the many problems in the system, which demand a separate article to expound on.

Other federalist countries such as Belgium and Canada have also largely failed to stem ethnic nationalism and separatist sentiments among their major ethnic groups, particularly vis-à-vis the French-speaking populations. Spain’s asymmetrical federalist experience is now confronting an outright crisis in Catalonia, which is seeking total secession.

It’s institutions, stupid!

What proponents of federalism tend to overlook is that federalism per se neither explains national success nor its failures. What matters, instead, are institutions.

Two of the most influential books in social sciences in recent years have emphasized the importance of institutions -- human-designed, regularized practices with specific politico-economic objectives -- in ensuring political stability, democratic health and economic prosperity.

One is the book “Why Nations Fail”, which draws on cutting-edge comparative research by Daron Acemoglu from the Massachusetts Institute of Technology (MIT) and British political scientist James A. Robinson from the University of Chicago.

The central argument of the book is that what matters the most in determining national development is the presence of inclusive political and economic institutions, rather than extractive-exclusionary ones.

Inclusive political institutions pertain to an accountable and transparent state, which is not dominated by a narrow, self-serving political class. Inclusive economic institutions refer to modern patterns of economic productivity, which lift the living standards of the majority of the population. This could come through robust industrialization and open trade practices rather than resource-dependent and protectionist development.

The other major book is by Francis Fukuyama of Stanford University, namely his two-volume work, “Origins of Political Order” and “Political Order and Political Decay”, which emphasize the importance of state-building and bureaucratic capacity-building in ensuring national development and democratic deepening.

Both magisterial works show that whether federal or unitary, parliamentary or presidential, if a country has exclusive-extractive institutions, it’s bound to fail. No wonder various forms of government and regimes have failed in the Philippines and other similarly troubled developing countries, because what didn’t change was institutional configuration of their societies.

So long as the Philippine state remains weak, with oligarchs controlling our political office and the economy, whatever form of government we adopt is bound to fail. That’s why any Charter Change should come along with a more comprehensive reform of our whole institutions, not just form of government.

Richard Heydarian is GMA Resident Political Analyst and author of, among others, “Asia’s New Battlefield: US, China and the Struggle for Western Pacific” (Zed, London).