Fiscal federalism and diversity accommodation in multilevel states: a comparative perspective

The accommodation of territorial diversity is one of the biggest challenges that complex societies must confront. Today, many states face intergovernmental conflicts that in certain cases also spark secessionist claims. Multilevel government either in federal or regional form, plays a key role in managing diversity and reducing the risk of secession. This has led to decentralization being presented by some scholars as the antidote to secessionist/nationalist movements (Kymlicka 1998), though contrasting views spice up the debate (Sorens 2015). Moreover, history has not proven any one of these theories. Although conflicts and secessionism arise from multiple factors, traditionally, the literature on territorial accommodation has focused predominantly on other aspects of the federal model - such as the recognition of national identities. The study of fiscal instruments and financial relations has been left aside, despite the fact that the latter have a critical role in this respect (Sorens 2015). In other words, the fiscal dimension is a vital component of any system of shared government, as the lack of resources to finance constitutionally assigned competences would render them inoperable, reducing autonomy to an empty vessel. However, the nexus between them is still to a large extent, understudied (Weingast 2014). Against this background, the Conference aims at integrating the discussion on the role of fiscal constitutions -understood in a broad sense- as a determinant, among other factors, not only of financial relations but also of the inherent dynamics of a federal system (Palermo and Kössler 2017). The starting point is that the degree of fiscal decentralization and the increase of interregional disparities might play a key-role in exacerbating conflicts. To be investigated however, is if and to what extent, these elements are also determinants in sparking secessionist/nationalist claims, and this is done by putting financial relations into the broader context of the federal structure of a certain system. In order to do this, the Conference will explore the rationale and management of intergovernmental conflicts on finances within a selection of states, integrating in the analysis the internal dynamics that result from them. This is done on the assumption that a process designed to accommodate a subnational entity could have negative repercussions on other subunits, thereby creating a sentiment of alienation and hindering the future process of ratification or implementation in legal or constitutional form. Thus, the Conference endeavors to shed light on the role that fiscal federalism plays in diversity accommodation in multilevel states whether their regional or federal nature. With this purpose in mind, it will explore and assess the role of fiscal arrangements as a tool of territorial integration (versus disintegration), with special emphasis on determining if and to what extent, different types of these arrangements can be conceived as an instrument for reducing (or enhancing) territorial tensions and accommodating diversity. These elements will be addressed from a comparative perspective, featuring several representative case studies and focusing on the different aspects and components that fiscal constitutions are built on, with the ultimate aim of investigating their impact on diversity accommodation.

Moderators and organisers Francisco Javier Romero Caro & Alice Valdesalici, Institute for Comparative Federalism, Eurac Research