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  • Federalism and Democracy: Beyond the U.S. Model
  • Alfred Stepan (bio)

For those of us interested in the spread and consolidation of democracy, whether as policy makers, human rights activists, political analysts, or democratic theorists, there is a greater need than ever to reconsider the potential risks and benefits of federalism. The greatest risk is that federal arrangements can offer opportunities for ethnic nationalists to mobilize their resources. This risk is especially grave when elections are introduced in the subunits of a formerly nondemocratic federal polity prior to democratic countrywide elections and in the absence of democratic countrywide parties. Of the nine states that once made up communist Europe, six were unitary and three were federal. The six unitary states are now five states (East Germany has reunited with the Federal Republic), while the three federal states—Yugoslavia, the USSR, and Czechoslovakia—are now 22 independent states. Most of postcommunist Europe’s ethnocracies and ethnic bloodshed have occurred within these postfederal states.

Yet in spite of these potential problems, federal rather than unitary states are the form most often associated with multinational democracies. Federal states are also associated with large populations, extensive territories, and democracies with territorially based linguistic fragmentation. In fact, every single longstanding democracy in a territorially based multilingual and multinational polity is a federal state. [End Page 19]

Although there are many multinational polities in the world, few of them are democracies. Those multinational democracies that do exist, however (Switzerland, Canada, Belgium, Spain, and India), are all federal. Although all these democracies, except for Switzerland, have had problems managing their multinational polities (and even Switzerland had the Sonderbund War, the secession of the Catholic cantons in 1848), they remain reasonably stable. By contrast, Sri Lanka, a territorially based multilingual and multinational unitary state that feared the “slippery slope” of federalism, could not cope with its ethnic divisions and plunged headlong into a bloody civil war that has lasted more than 15 years.

In addition to the strong association between multinational democracies and federalism, the six longstanding democracies that score highest on an index of linguistic and ethnic diversity—India, Canada, Belgium, Switzerland, Spain, and the United States—are all federal states. The fact that these nations chose to adopt a federal system does not prove anything; it does, however, suggest that federalism may help these countries manage the problems that come with ethnic and linguistic diversity. In fact, in my judgment, if countries such as Indonesia, Russia, Nigeria, China, and Burma are ever to become stable democracies, they will have to craft workable federal systems that allow cultural diversity, a robust capacity for socioeconomic development, and a general standard of equality among their citizens.

Consider the case of Indonesia, for example. It seems to meet all the indicators for a federal state. It has a population of over 200 million, and its territory is spread across more than 2,000 inhabited islands. It has great linguistic and ethnic fragmentation and many religions. Thus it is near the top in virtually all the categories associated with federalism. If Indonesia is to become a democracy, one would think that it would have to address the question of federalism or decentralization. Yet at a meeting of Indonesian political, military, religious, and intellectual leaders that I attended after the fall of Suharto, most of the participants (especially those from the military) rejected federalism out of hand because of secessionist conflicts at the end of Dutch colonial rule. Indonesia should at least consider what I call a federacy to deal with special jurisdictions like Aceh or Irian Jaya. A federacy is the only variation between unitary states and federal states. It is a political system in which an otherwise unitary state develops a federal relationship with a territorially, ethnically, or culturally distinct community while all the other parts of the state remain under unitary rule. Denmark has such a relationship with Greenland, and Finland with the Aaland Islands.

A Misleading Picture of Federalism

In seeking to understand why some countries are reluctant to adopt federal systems, it is helpful to examine what political science has had [End Page 20] to say about federalism. Unfortunately, some of the most influential works in political...