Federalism and its discontents: Fiscal and legislative power-sharing in Germany 1948-99

Article abstract:

The division of fiscal and legislative responsibilities forms the backbone of every federal constitution. Germany has attracted attention as one of the clearest examples of 'cooperative federalism' and, recently, as a locus of debates about more competitive routes to organising federal systems. This article examines trends since 1948 that centralized legislative competencies and heightened the sharing of financial burdens. The unidirectional dynamic in these reforms - underscored by failed attempts at devolution in the 1980s and 1990s - is explained by focussing on politics in the Bundesrat, the second house in the German Parliament, in which the Länder governments are seated. 'Federalism'-policies position the rich Länder against the federal government; any majority to change the system must be built with the poorer Länders' votes. The poor Länder, likely losers of competition among jurisdictions, vote for financial solidarity and centralized policymaking but against devolution. The article predicts a continuation of the problematic status quo and concludes by contrasting two evaluations of Germany's failure to achieve a more 'competitive federalism'.