Intergovernmental relations describes how different levels of government interact with one another within the same political system. The official organizational structure of governmental units determines the basic parameters of this process. However, funding mechanisms and specific policy issues also have significant impacts on how various levels of government interact with one another.
Structural Influences
In a federal system, political authority and responsibility are divided between one central government and a series of regional governments. The regional governments are often broken down even further into smaller governmental entities, such as counties, townships, cities, parishes, and villages. Although there are differences across federal systems, they do share some common characteristics. In most federal political systems, the central government handles those issues that affect the entire country, whereas regional units focus their efforts on matters that are particularly relevant within their own jurisdictions. Only about twenty nations have federal political systems, but they include some of the largest, most populous countries—the United States, Canada, Germany, Mexico, Argentina, Brazil, Venezuela, India, and Nigeria.
Similar to their federal counterparts, unitary systems divide responsibilities between a central government and lower governmental units. But in a unitary system, the central government retains the ability to determine the breakdown of policy responsibilities and power across various levels of government. The vast majority of nations around the world have some form of unitary structure for political representation and governmental activity. Unitary systems include Great Britain, Italy, France, Japan, Sweden, Uruguay, South Korea, and Kenya.
Intergovernmental relationships are affected by the division of power that exists within a given political system. In unitary systems, the roles of the central government vis-à-vis subnational units are more clearly defined, allowing various levels of government to work more effectively with one another. However, in federal systems, the division of responsibilities between governmental units may not be as clear-cut. This, in turn, can contribute to greater intergovernmental confusion, tension, and conflict.
However, intergovernmental relationships are not solely determined by the organizational structure of a political system. There are countless ways for governmental units to interact with one another in both unitary and federal political systems, and there are a number of factors that affect these intergovernmental relationships.
Financial Influences
Many intergovernmental relationships involve an exchange of financial resources targeted to deliver public goods. Various methods are used to determine the amount of intergovernmental transfers, including equal sharing arrangements among municipalities, block grants for individual programs, and formulas that include economic and demographic variables. The disbursal of funds from one unit to another typically involves stipulations for administrative oversight and performance standards. In some instances, lawmakers at the national level enact mandates requiring services be provided by regional, state, or local governments but do not provide sufficient resources to implement them. This behavior is common to education and entitlement programs, wherein performance standards are often dictated by a central government but lower units are responsible for financing the cost of meeting those benchmarks.
In many federal political systems, resources flow from central to regional governments and then to localities, but the amount of money distributed and the level of autonomy that each level of government possesses vary across different federal systems. The central government in Spain, for example, distributes conditional and unconditional grants and a share of income tax revenue to municipalities and provinces, which raise additional income through local taxes, which deliver public services. Likewise, states/provinces and localities in the United States and Canada receive a share of federal tax revenue through various means—direct revenue sharing, grants, and program subsidies—but raise additional resources through income, use, and property taxes. These funds are used to finance programs mandated at both the federal and the state level.
In other cases financial arrangements are more decentralized. Swiss municipalities enjoy a fair amount of financial sovereignty from their central government. While some federal resources do trickle down to municipalities through cantons, a large majority of municipal revenue is derived from locally levied personal and corporate income taxes. Australian localities enjoy a similar level of independence from their federal government, raising a majority of their budgets through property taxes, with most federal and state grants earmarked to provide public goods including housing and infrastructure.
The transfer of funds from central to regional and/or from regional to local governments for the purpose of providing social services can lead to conflict with municipal leaders, who often find that actual program costs exceed what they have been delegated. Such intergovernmental tension is quite common. School districts in the United States, together with many state departments of education, have made light of the issue that federal funding is insufficient to comply with and meet federal education standards. Similarly, costs associated with the transfer of French high schools to regional governments have far outstripped the size of federal grants.
Global economic and demographic changes have had an impact on local, regional, and federal budgets. Technology has played a role, as goods formerly subject to taxes are increasingly delivered through hard-to-tax digital channels, creating downward pressure on state and local budgets that depend on such revenues and, with rare exception, must be balanced each year. At the same time, federal budgets worldwide have been strained by increased expenditures on health care and programs for the elderly, a by-product of a gradually aging population. In the United States, the federal government has shifted an increasing amount of responsibility for infrastructure construction and maintenance to states and municipalities. This, in turn, has created additional pressures on state governments to meet their own obligations.
Policy Influences
Constitutional frameworks, political structures, and the needs of native populations contribute to differences in how policy relationships play out between levels of government. Areas that do not require significant dependence on subnational units for implementation, such as defense, foreign affairs, and macroeconomic policy, are directed by central governments. If necessary, subnational constituents make their views regarding these issues known through institutional channels or by lobbying elected representatives or special interest organizations. But in several other areas, some of which are discussed below, input is required from multiple levels of government. There is often a tension in policy making between the benefits of centralization at the national level, particularly economies of scale on one hand and the need to deliver services that meet the needs of diverse constituencies on the other. Questions about accountability, funding, and oversight further complicate this balancing act, which occurs in multiple areas of policy.
Education
Given the social and economic benefits attached to a well-educated population, it is not surprising that all levels of government place education at the top of their policy agendas. Elementary, secondary, and postsecondary schools are often locally operated, with regulatory and financial support coming from a combination of local, regional, and national sources. The structure of intergovernmental associations as they relate to education differs among developed nations. Many countries operate national ministries of education, although the actual responsibility for operating the schools often lies at the local or regional level.
In some contexts, such as the United States, Canada, South Africa, and Australia, states and provinces assume a great deal of responsibility for instruction. Funding procedures differ, but in general, primary and secondary education is financed through local taxes with some schools overseen by locally elected officials. Curricula are implemented in accordance with standards developed at the local and/or state level. While states and provinces also contribute funding to community colleges and public universities, the amount is not equalized, leaving some institutions to rely more on tuition, research grants, and private support.
Many national governments do not provide sufficient financial support for schools, but this does not preclude their influence on education policy, especially in terms of establishing standards and being responsible for program accountability. An expanded federal role in the United States can be traced to the 1965 Elementary and Secondary Education Act, the creation of the Department of Education in 1980, and the passage of the No Child Left Behind Act in 2002.These policies had several goals, although most centered on increasing accountability and standards in public schools and ensuring equal opportunity and access to traditionally underserved populations. State and local officials often complain that the funding provided by the federal government is insufficient to implement such policies and that federal mandates have not improved the quality of public schools. A comparable dynamic can be seen in Great Britain between local authorities and the central government. Conflict persists because educational services are delivered at the local level but funded through national taxation and regulated by a national agency, the Department for Children, Schools and Families, although some mandates have been relaxed.
Intergovernmental disputes over education policy do not appear to be as prominent in many other centralized systems. In smaller nations, such as Norway, Ireland, and Denmark, all schools (including universities) are supported almost entirely by the national government. This eliminates some of the conflict between regional and central policy makers. A similar approach is followed in China and South Korea. While education in larger European nations such as Germany and France is financed at both the national and the state level, subnational units retain some policy control. This basic model is also present in Russia, where education is mostly regulated by the central government with some input from regional authorities.
Emergency Preparedness And Response
Emergency preparedness policy is typically established at the national level, with national, regional, and local governments sharing responsibility for program implementation. This includes the development of policies aimed at preventing the occurrence of emergencies as well as policies designed to help citizens recover from them. Coordination among governments and their supporting agencies is a complex undertaking; indeed, the delineation of responsibilities and jurisdictions is still largely a work in progress. The experience of the United States is instructive. In 2002, a new federal agency—the Department of Homeland Security—was created to improve the government’s response to emergency situations. But the department has gone through subsequent structural changes, and some of its policy responsibilities have been shifted to other federal agencies and to state and local offices. While the phrase homeland security is largely an American term, other countries have pursued similar strategies in this policy area. For example, Canada made strides at coordinating various security and emergency response efforts by forming Public Safety Canada in 2003.
Changes at the national level have increased pressure on regional and local governments, which are often charged with carrying out actual preparedness efforts. Those responsibilities are far-reaching, from day-to-day operations to equipment procurement and disaster response planning, all of which require significant human and financial resources. Localities look to federal agencies for assistance, but national-level feedback, in terms of establishing clear security priorities with sufficient funding, is often fragmented and redundant. One conflict that both national and regional governments have grappled with is “risk versus spread”—whether funds should be concentrated to units with a higher likelihood of experiencing a terrorist attack (urban centers) or natural disaster (coastal areas), split evenly among units, or some combination thereof. Funding issues are likely to stress future emergency preparedness discussions, a policy area challenging enough given the inherent unpredictability of most disasters.
Social Welfare And Public Health
Governments worldwide have confronted the need for social programs, including public welfare and health insurance, since the late nineteenth century, with a combination of policies directed from the national and subnational level.
Public pensions and health care are often centralized, with the national governments deter mining eligibility requirements and providing the majority of program financing. This basic arrangement is common throughout Europe and also in Japan, Israel, and Australia. Canada and India mandate national health insurance but leave provinces and states responsible for implementation.
The evolution of American social welfare policy has followed a different trajectory. The role of the federal government increased during the economic turmoil of the 1930s and again during the war on poverty era of the 1960s. But this gave way to a decentralized approach in the wake of the 1990s welfare reform movement. As the number of programs and providers has increased, so has the ambiguity over who bears responsibility for funding and implementation. For example, Temporary Assistance for Needy Families and Medicaid are funded through a combination of federal block grants and additional state spending, but states have a great deal of discretion over program design and delivery. As the costs of these safety net programs have increased, state governments have looked to the federal government—and its wider revenue base—for more and more relief.
The United States is not alone in taking a decentralized approach to social policy. Brazil’s national health system, Serviço Único de Saúde, allows municipalities to set their own priorities, providing they concur with federal guidelines. Federal resources are transferred to states and municipalities, which have assumed an increasingly larger role in service delivery. A small number of municipalities have assumed full control of providing health care, but only those that have met established federal requirements.
Yet the United States does stand apart among industrialized nations in not offering a nationalized health care system to all citizens. While federally sponsored programs such as Medicare, Medicaid, and the State Children’s Health Insurance Program provide coverage to their respective constituencies, a majority of the population is insured by employer-provided plans, which are regulated at both the federal and the state level. Some states have made strides toward universal coverage by using a mix of public and private plans, but they have seen their successes in increased coverage tempered by cost overruns. The current health care reform debate in the United States centers on precisely this tension: how to expand access while keeping costs under control.
Environment And Climate Change
Climate change has received substantial attention in recent years, with many developed nations ratifying and enacting measures to reduce pollution in fulfillment of the Kyoto Protocol. These policies require careful attention to placate dueling concerns for a clean environment and continued economic growth. Most often the approach is centralized to and coordinated between national governments, which have adopted policies aimed at encouraging environmentally friendly behavior among consumers and institutions, although the United Nations has also played a role in setting global environmental policy goals. These policies typically include a mix of consumption-based taxes and subsidies. Action on climate change has been strongest in the European Union, where several member states for med the Greenhouse Gas Emission Trading Scheme to coordinate emissions across the continent.
The failure of the United States to ratify Kyoto, in conjunction with the failure of the national government under the George W. Bush administration to enact other comprehensive environmental protection measures, has led to significant policy innovation at the state level. Specifically, interstate cooperation has grown as multiple governments in specific regions have increasingly formed partnerships to advance an ecological agenda, such as the states surrounding the Great Lakes, a trend referred to as “bioregionalism.” In addition, regional collaboration has been evident in climate change policy. The establishment of renewable portfolio standards is typically an intrastate political process but has led to interstate coordination, such as when renewable energy produced in one state is traded to another. Regional climate partnerships are not limited to the American border; some states have worked with Canadian provinces on climate policy. Looking forward, sustained involvement and cooperation from all parties may be a challenge, especially if climate and political dynamics change—even more so if the U.S. federal government exerts a larger role in environmental policy.
Transportation
Governments have confronted increasing demands for infrastructure development with a mix of public and private financing for road, rail, and air transportation. In most countries construction and maintenance are funded through the imposition of gasoline taxes and/or passenger fees. Project management is usually handled by central governments in Europe and South America, while the United States takes a more decentralized approach. States raise their own revenue through taxes but also receive revenue sharing from the federal government. This arrangement is the subject of some contention among state policy makers. Because federal transportation funds are not redistributed proportionally to states, some donor states receive a smaller share of federal gas tax revenue than they originally remitted.
The Evolving Nature Of Intergovernmental Relations
It is difficult to generalize about the evolution of intergovernmental relations in countries around the world. Each political system has experienced its own set of intergovernmental issues and problems, some of which are unique to a particular nation. However, it is clear that intergovernmental relationships and arrangements have become increasingly complex in all political systems. This is particularly evident across the last century. Major political initiatives and increasing citizen demands have prompted changes in intergovernmental relations.
In some instances these changes are the product of policies that are not specifically designed to change the intergovernmental process. This trend is visible in the United States, where several federal policies that did not affect the basic structure of governance nevertheless led to changes in intergovernmental relations. Ratification of the Sixteenth Amendment (giving Congress the power to tax income) and passage of the Revenue Act of 1913 enhanced the federal government’s ability to raise revenue and distribute grants, bringing an end to the relative separation between national and state governments. New Deal programs in the 1930s further enlarged federal power relative to the states, while 1960s Great Society initiatives created new areas of shared responsibility between national and state governments. Federal budget cuts during the Reagan administration partially severed some of those associations, leading states to take charge of various programs, effectively increasing their power relative to municipalities. More recent national reforms to social welfare programs, education standards, and homeland security initiatives have added new layers of complexity to the relationship between federal, state, and local governments.
In England and France, the national government has taken a more direct role in shaping governmental relations. Modern British intergovernmental relations were influenced initially by the 1972 Local Government Act, which replaced existing localities with a two-tiered system of counties and districts. While this legislation explicitly divided functions between different levels of government and increased the size of localities, it did little to change their autonomy relative to the central government. Certain provisions eroded during the Thatcher era as local governments mounted greater challenges to national policies. Governmental relationships evolved further as a result of the 1992 Local Government Commission for England, which abolished a number of counties and created new local authorities in urban areas.
Despite its historical nature as a highly centralized state, France represents an interesting case wherein increasing decentralization has been the trend. Laws enacted in 1982 and 1983 assigned specific functions to central, regional, and local governments. A subsequent effort aimed at increasing cooperation between municipalities, the 1992 Chevement Acts, was less successful, perhaps because it failed to provide any financial incentives. But the constitutional reforms of 2003 and 2004 did succeed in clarifying and strengthening the role of local governments.
Decentralization or devolution is a common trend in contemporary intergovernmental relationships. Decentralization or devolution is said to occur when a central government transfers power or responsibility to a regional, state, or local governmental jurisdiction. Although the particular practices vary widely, decentralization has occurred in both unitary and federal systems, including Italy, the United Kingdom, Australia, Canada, and the United States. Although the transfer of resources or authority from national to subnational governments is usually financial in nature, it may also involve the distribution of political power and authority. For example, during the late 1990s a series of votes led to the creation of the Scottish parliament and a transfer of power to that body from the British parliament. In the same vein, the National Assembly for Wales was created in 1998 and given powers previously held by the British government.
A significant body of literature has also emerged about the consequences of decentralization on democratic policy making and governmental performance. Most scholars agree that decentralization is beneficial for democratic societies: it provides more points of access for citizen input and expands the opportunities for political representation. In addition, subnational governments are said to be more responsive to citizens’ needs and more attuned to their problems. Hence, shifting responsibilities to lower levels of government can contribute to more effective and efficient governmental policy making. This, in turn, improves governmental performance.
Challenges Of Intergovernmental Relations
Perhaps the most persistent challenge of intergovernmental relations involves how to manage the ever-changing interactions and operations of various governmental jurisdictions. No matter the organizational structure, different levels of government develop their own perspectives about which policies should be pursued and how these policies should be implemented. In some cases, these perspectives may not match those of others. This can produce intense political debates about which level of government should take the lead in establishing policy directions. It can also lead to confusion and breakdowns in the delivery of critical public services. All political systems have encountered these problems of intergovernmental relations. As the intergovernmental system continues to evolve, the management of these complicated, ever-changing systems will become even more pressing.
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