Financial Autonomy vs. Solidarity: A Dialogue between Two Complementary Opposites

in A Valdesalici and F Palmermo (eds), Comparing Fiscal Federalis, Koninklijke Brill NV (2018)

U of Melbourne Legal Studies Research Paper No. 782

17 Pages Posted: 20 Jun 2018

See all articles by Cheryl Saunders

Cheryl Saunders

University of Melbourne - Law School

Date Written: June 19, 2018

Abstract

This paper compares approaches to the design and operation of fiscal arrangements in federations by reference to the extent to which they reflect two principles. The first is autonomy, which refers to those elements of a system that expect and protect independent action by each order of government and encourage self-reliance. The second is solidarity, which refers to features that involve interdependence and anticipate the collective interest in effective government in a federated state. The paper argues, by reference to the case studies of the United States and Germany, that all federal-type systems necessarily have elements of both, although the principles manifest differently, and in different proportions, under the influence of contextual factors, including federal design. Thus, in the United States, solidarity is coloured by a competitive and adversarial federal operation; in Germany, demands of autonomy are tailored to and limited by core expectations of solidarity. Further, the paper argues that, whatever the initial mix of autonomy and solidarity, change is likely over time. Catalysts for change include the economic context in which the federation operates, internally and externally, and political power-struggles between the spheres of government. Change may involve alteration in the federal constitutional or legal framework. Even where the framework remains static, however, functional change may occur through political practice reinforced by judicial interpretation.

Keywords: financial autonomy, solidarity federal constitutional

JEL Classification: K00, K39

Suggested Citation

Saunders, Cheryl Anne, Financial Autonomy vs. Solidarity: A Dialogue between Two Complementary Opposites (June 19, 2018). in A Valdesalici and F Palmermo (eds), Comparing Fiscal Federalis, Koninklijke Brill NV (2018), U of Melbourne Legal Studies Research Paper No. 782, Available at SSRN: https://ssrn.com/abstract=3199561

Cheryl Anne Saunders (Contact Author)

University of Melbourne - Law School ( email )

Centre for Comparative Constitutional Studies 723 Swanston Street (2nd Floor)
Parkville, Victoria 3010
Australia
61 3 8344 0753 (Phone)
61 3 8344 9374 (Fax)

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