Local Governments in Federal Systems: Intergovernmental Relations in the Governance Era

Robert Agranoff

School of Public and Environmental Affairs, Indiana University-Bloomington

Instituto Universitario Ortega y Gasset, Madrid

Paper prepared for Panel on “Territorial Choice, Multilevel and Governance and Local Democratic

Accountability,” 22nd IPSA World Congress, Madrid, July 8-12, 2012, Universidad Complutense-Moncloa

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Local Governments in Federal Systems: Intergovernmental Relations in the Governance Era

Robert Agranoff

School of Public and Environmental Affairs, Indiana University-Bloomington

Instituto Universitario Ortega y Gasset, Madrid

Local governments, particularly municipalities, are normally regarded as the legal and

operational competence of constituent governments (states/provinces) and not readily seen as

integral intergovernmental components of federal systems. Local governments are widely

regarded as within the competencies of the second tier, “implying that the primary relations are

between states and local governments to the exclusion of the federal government” (Steytler 2009:

3). For quite some time municipalities were thus not seen as distinctive spheres of government

but legal supervision and fiscal ties has brought on “recognition of the growing interdependence

among spheres of government” (Leuprecht and Lazar 2007: 7). This may be the case with regard

to non-federal states in a legal sense, but in practically every federal country the imperatives of

policy and programs have led local governments to become part of the system of

intergovernmental relations within their multiple decision structures and multi-organizational

arrangements (V. Ostrom 1985).

Local governments are in practice important governing players that represent public

authority at the community level. It is locally that citizens first look to solve immediate

problems. It is the level where citizens are able to directly and actively become linked to public

agency decisions. Local governments now integrally fit into the scheme of intergovernmental

policy implementation, at the bottom of the program chain, so to speak. They are also foremost

as proximate democratic institutions since they are governed by elected bodies, with an executive

authority and council that oversees services and programs. They nevertheless tend to be

overlooked in the country-wide federal scheme of IGR.

Local services and programs are no longer limited to the basic amenities of life, nor are

they exclusively determined at the community level. Local governments are inextricably linked

vertically to their states/provinces and to their general governments through a range of national-

state (provincial/regional) programs, legal and fiscal considerations, and are horizontally linked

with associated local governments and nongovernmental organizations through partnering,

contracting, or other forms of externalization. The result is high degrees of

intergovernmentalization and operation in networks of external contacts, which is the current

reality of local governments in federal systems. This paper identifies these conditions and raises

some core conceptual issues relating to IGR as local governments have entered the era operation

within three-tiered federal systems.

The Contemporary Status of Local/Municipal Governments in Federal Systems

Recognizing that systems vary in their degrees of centralization/decentralization (Braun

2011), the standing of local governments in federal systems is increasingly important in the era

of interdependencies. This research draws considerably on a number of within nation and cross-

national studies involving local governments in multilevel systems (Agranoff 2010a; 2010b;

2012; Argullol et. al 2004; 2010; Leuprecht and Lazar 2007; Steytler 2009). In this overview of

the place of local governments (LG), especially municipalities, particular focus will be on their

standing vis-à-vis intergovernmental relations (IGR), defined here as the patterned legal,

political, fiscal, and policy connections/interactions that characterize their place in contemporary

interactive systems of governance (Wright 1988). Four sets of concerns with regard to IGR are

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analyzed and compared. First is the relative constitutional position of LGs within their multilevel

systems. Second are trends in governance that impact LGs in virtually every such system. Third,

a series of urban challenges that municipalities are facing are identified, such as social/economic

challenges, the new public management, and increased democratic impulses, that go well beyond

local provision of basic amenities. Fourth, the paper concludes with a series of four unanswered

IGR research questions that emanate from the emergence of local governments within multilevel

federal governance.

Historically local governments preceded nation-states as commercial centers and/or

places where people of similar beliefs could associate and habituate. As nation-states were built

and local governments were incorporated into them local self-government during the nineteenth

century was in part aimed at limiting the intrusion of central governments in the affairs of

communities, an earlier expression of the bounded and passive nation-state. Local governments

were never intended to be completely free of central direction; their status as “jurisdictions” led

to political, economic and legal barriers to arbitrary central intervention. Over time, the notion

also developed that subnational units not only had freedom from interference from central

officials but also possessed freedom to do something to solve their communities’ problems

(Sharpe 1987). As Kjellberg (1995: 43) concludes, “From originally being negatively defined,

local autonomy became an instrument for the realization for communal interests, as well as a

means to implement other values.” Of course, forces like modern communication and

industrialization, expanded franchises, and the expanded welfare state later brought on

nationwide government. In turn, these forces introduced models of overlapping authority and

increased multilevel interaction, not by hierarchical national-regional-local government modes

but through intergovernmental processes (Rose 1984; Krane and Wright 1998), which in turn led

to distribution of powers among units.

Although beyond the scope of this paper, it is also important to note that local

governments suffer considerable political power deficiencies in federal systems when compared

to their constituent units. Cities, for example, are normally considered to be either chartered

corporations or constitutionally recognized subdivisions under the legal control of one or more

higher level governments. Other local governments are directly created in law. Constituent unit

states/provinces/regions experience direct representation in their general government institutions

and processes and are major players on their national political scenes. Mayors of large cities to

some degree may have some relatively powerful political positions but by and large thousands of

medium-sized and small local governments are without the type of direct political access that

state units have (Steytler 2009: 432). Federal focus on constituent unit issues is a direct result of

their relative political power, often draining political and governmental energy from municipal

concerns everywhere (Agranoff 2010: 226-227). It means that municipal interests are largely

relegated to less direct action through bilateral contacts and local government associations. In

this regard, López-Arangen (2001: 5) observes that in Spain local governments “occupy a strong

position in legal and constitutional terms but in the reality of day to day government they

experience a serious lack of powers in areas important to them as well as adequate economic

resources to face the responsibilities assigned to them or those they would like to assume.”

While the primary focus in this paper is on municipalities as representative of “local

governments” in all systems, local government, of course, is not a uniform concept or set of

characteristics. In terms of services municipalities vary considerably in their depth and breadth.

For example, in Australia a very limited range of basic amenities are organized by municipalities

(Sansom 2009), whereas in Germany the entire range of basic services plus health, education,

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and social welfare services are delivered by cities or counties (Burgi 2009). As Steytler (2009: 4)

observes, local government “is merely a collective noun for a wide variety of governance

institutions that come in all shapes and sizes and that perform widely divergent functions.” They

not only range in size, small rural to large metropolitan city, but also in their functions, from one

to many. What distinguishes contemporary municipalities (and counties) is the broad scope of

functions they perform, and like other local governments, municipalities have “no order of

government between them and the communities they serve” (Ibid).

Powers Distribution1

The basic framework for local government powers begins with their constitutional status.

Federal constitutions recognize local government autonomy in Mexico, Brazil, Argentina, India,

Germany, Austria, Switzerland, Belgium, and Spain. Many of these states, however, in effect

leave the definition and supervision to their second-tier governments, as with Switzerland and

Belgium. Others, like Spain, Mexico, and India, recognize autonomy but have a dual system of

national and second-tier legal definition and supervision. In Spain, this is called bifronte, or dual

recognition and supervision. A third group of federal countries, including Australia, Canada, and

the United States, do not constitutionally recognize local government autonomy at all but leave it

up to their state/provincial systems for recognition and supervision. This, of course, leads to

questions of the locus of power(s) over local governments. In addition to exclusive second-tier

government powers over local governments in Australia, Canada, the United States, also India,

Germany, Switzerland, and Belgium leave basic local government control to their intermediate

governments. Others, such as Argentina, Mexico, Brazil, and Spain, have the mentioned dual

system. For example, in Spain the basic or framework laws regarding local government

elections, organization, operation, and financing come from Madrid whereas most local

government laws, programs, and program oversight is left to the second-tier autonomous

communities (AC) (Agranoff 2010a). In Malaysia local government and land use are state

powers but the federal government has the power to legislate for matters of uniformity and other

local measures; town planning, fire services, housing and concurrent powers (Huat and Chin

2011).

One interesting question with regard to local powers is that of second-tier governments’

ability to create “intermediate local structures” within the federal constituent unit. For example,

in the U.S., counties, townships, and special districts are established as creatures of their states

(Stephens and Wikstrom 2007). Similarly, in Canada, Brazil, Germany, Switzerland, and Spain,

various types of sub-state, metropolitan, or special governments may be created. Australian

states have such powers but have not chosen to do so. Second-tier creation of intermediate

governments is not allowed in Argentina, Belgium, Mexico, India, and Austria. As is the case

with regard to India, where local government is actually on the state list of powers, the federal

constitution in these countries provides for all levels of local government. Over the past several

years the federal government in India has added new layers of local government, particularly at

the panchayat or village level (Mathew 2002). Also, in Mexico, all municipal government

powers are state powers, including the establishment of territorial limits of local jurisdictions.

There are no other local governments allowed. Despite Belgium’s two subnational tiers of

1 This section is primarily based on the Allocation of Powers Project (Argullol 2004, 2010), for which the author is a

participant researcher.

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regions and communities, only regions have powers over aspects linked to territory, including all

local government matters. Communities possess only “non-territorial rights” (Poirier 2011: 351).

A related question then becomes, can the general government intervene in organization,

powers, or financing of local governments? This is a more difficult issue, in as much as the

welfare state has accelerated interdependence (Agranoff 2010b), but from a constitutional

standpoint it is mixed. While the power of local governments are secured in the South African

Constitution, the central intervention through the provinces includes strong powers to intervene

in failing municipalities, a control from the center that is “in line with ANC thinking” (Murray

and Simeon 2011: 238). Officially the German federation has no local government intervention

powers. Article 28 of the Basic Law guarantees local autonomy and despite the fact that local

government bodies carry out large parts of the administrative functions assigned to the Länder by

federal legislation, they “enjoy the constitutionally protected status of an autonomous tier of

government” (Leonardy 2011: 325), for example in areas like town planning. Moreover, the

Federalism Reform Act (2006) posed a new barrier against direct federal involvement in local

government matters. In administrative matters federal laws may no longer transfer functions to

local government bodies. From a federal guaranteed rights perspective, the U.S. federal

government can and does intervene. In Canada, provinces must approve local-federal

interactions and agreements. In Australia, the federal government can only intervene with regard

to conditions placed on federal financial aid, a similar condition to that of India. In Spain, the

government in Madrid regularly intervenes locally “to establish the basis that all public

administrations must respect to secure a minimum uniformity and above all, a basic treatment for

all citizens before the several public administrations…” (Viver in Argullol et. al. 2010: 313).

Finally, quite unusually for federations the Brazilian Constitution incorporates detailed rules for

the management of over 5,500 municipalities, which then operate under their own constitutional

provisions or organic laws, adopted by local councils (Mendes 2002: 95).

In most federal countries, the scope of local powers is determined either by the general

government, as is the case of Mexico, Brazil, India, Austria, and Spain, whereas Belgium,

Switzerland, Germany, Argentina, Australia, Canada, Malaysia, and the U.S. leave such matters

primarily to their constituent governments. In the case of the former group, most federal powers

involve control over both traditional municipal services – water, public lighting, sanitation,

streets, public safety – and the exercise of such certain higher level functions as elections

administration, nation/state roads, social services, education, and the like. In the second group,

states/provinces determine the form of government, financing, and basic services. In

Switzerland, for example, cantons have legally delegated local powers regarding primary

education, zoning, land use, development, security, and public order to their municipalities.

Municipalities collect their own taxes and define their own tax rates for their territory, along with

receiving cantonal subventions. As Stauffer, Töpperwein, and Thalmann-Torres (2002: 317)

conclude, “The territorial division of the cantons into municipalities has a very long tradition.

Each canton grants different powers to its municipalities, but once those powers are laid down in

the law, they are guaranteed and protected by the Swiss Federal Court in much the same way as

it protects the fundamental rights of individuals.”

Most important with regard to IGR is that local governments increasingly bear the burden

of carrying out federal and second-tier functions along with delivering local services. It is what

Bennett (1984) once identified as the dual system of local government: meeting community

needs and implementing higher-level programs. In Spain, for example, both the central

government in Madrid and the ACs may delegate the exercise of their powers to municipalities

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by legal enactment and/or assignment of competencies. Supposedly, the consent of the affected

jurisdictions is required, such as in the case of the transfer of state-run health and medical

services to the ACs. But this rarely happens in practice with regard to Spanish municipalities,

although some policing functions have been delegated only with local consent. More typically is

higher government mandating or direct orders. For example, immigration and control of borders

is an exclusive federal competency but the general government requires Spanish municipalities

to find and register both legal and illegal immigrants on the local census (empadroníamento). A

similar pattern holds for Austria, Belgium, India, and Mexico. In other federations – Australia,

the U.S., Canada, Germany, and Switzerland – direct federal intervention regarding local

functions in municipal powers and services is more likely to be tied to policy and/or financing in

a less direct and normally less frequent manner.

Federal-local collaboration is clearly most evident with respect to actions/requirements

tied to policy-related financing. In virtually every federal country direct national-local linkage

occurs as a byproduct of fiscal subventions. For example, in Australia, despite complete state

government powers over local governments, commonwealth collaboration occurs as a result of

conditions placed on grants to the states. The same pattern exists with regard to Mexico,

Argentina, Austria, Switzerland, Belgium, Spain, and the United States. For example, in

Belgium, financing follows such mandated central-regional functions as electoral registers,

driving licenses, applications for financial benefits, and unemployment control. In the United

States, some direct federal grants go to cities and counties, e.g. Community Development Bloc

Grants, and local governments are subject to the same federal-state due process and civil liberties

provisions as are the state governments as grant recipients, often in the form of mandates that are

attached to conditions of federal financial assistance. In this way, virtually every local

government is tied to their national government through multiple fiscal ties.

It is through IGR—including the fiscal tie—that local governments have become

primarily linked to their national governments over the past century. Agranoff (2010b) has

attributed the accelerated activity of IGR to four evolutionary phases of government interaction.

The first phase, roughly during the nineteenth century, involved building integral states where

law and politics joined the territorial organization of nation-states. Nationwide organization

brought local governments under each nation’s constitutional umbrella (Loughlin 2007). The

second phase introduced the idea of interdependency through welfare state growth, coupled with

the needs of industrialization, commercialism, communication, and services. These forces, in

turn, required a network of local delivery that brought on national programming and

implementation through the integral state, where compartmentalization of functions brought on

“important intergovernmental adjustments” (Ashford 1988: 19) and ushered in the idea of

overlapping authority among units of government (Wright 1988: 49). The third phase involves

expansion of the welfare state externally into a series of nongovernmental organizations through

grants, contracts, subsidies, and other tools of government (Salamon 2002), various forms of

governments for hire (Smith and Lipsky 1993: 5) where “the public administration problem has

spread well beyond the borders of the government agency” (Salamon 1995: 2). Fourth, the

spread of agents and agencies—governments working externally—has led to operating pressures

to work interactively through operational networks of local, intermediate, and national

governments working with nongovernmental organizations (NGO) to exchange information,

enhance one another’s capabilities, smooth services interactions, and solve policy/program

implementation issues (Agranoff 2007a; O’Toole 1997; Koopenjan and Klijn 2004). These four

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IGR phases, all of which are currently operational, tie local and national governments in an

expanded and redefined IGR, if not in a constitutional-legal sense.

Despite the prevalence of an IGR that ties the local governments to national systems,

federal countries vary with regard to the extent to which such connections are constitutionally

recognized. No formal recognition or legal establishment of IGR exists in the constitutions of the

U.S., Canada, Brazil, India, Germany, Austria, Belgium, and Spain. In each of these systems,

conventions, institutional practices, and ordinary laws have led to labyrinths of IGR practices.

Others are more formalized. For example, Australia established an Intergovernmental

Agreement on Federal Financial Relations in 2009. It has for many years employed a Council of

Australian Governments (COAG) (first ministers plus local government representation) to reach

major intergovernmental agreements. It also has developed commonwealth-state ministerial

councils. Federal jurisdiction in Australia exists within state courts that in turn govern the major

IGR parameters that impact national-state relations, and by indirection local interactions.

Belgium has regulated IGR by law rather than by constitution, particularly laws encouraging

cooperation and collaboration between state, communities, and regions in both domestic and

international relations. Also, a series of inter-ministerial conferences, such as one on foreign

affairs, have been established as working IGR mechanisms connect regional, communal, and

state activities that cross national borders.

By contrast, Argentina, Austria, Mexico, and Switzerland recognize these processes

constitutionally. The Swiss Constitution devotes an entire chapter to IGR where the fundamental

principles of federal loyalty, cooperation in fulfillment of responsibilities, and means of conflict

resolution are identified. It also includes identification of different areas of administrative

cooperation, authorizes intergovernmental agreements, and defines means of executing shared

responsibilities. Mexico’s Constitution establishes IGR through two mechanisms, through areas

of concurrent powers (education, health, social services, policing) and by conventions made by

the federal government with the states and with municipalities, for example in the areas of

development and taxation. An example of the latter are agreements yielding a particular

municipal tax in return for increased federal income tax financing for infrastructure and/or

education.

Whether in Constitution, law, or practice, IGR is very much alive in the real world of

federalism. Each federal country has evolved an institutionalized IGR that either directly or

indirectly ties the national, intermediate, and local levels. Three identifiable patterns are

apparent. First, whereas the U.S., India, Brazil, and Argentina have no formal institutions of

IGR, they rely mostly on bilateral official-to-official contacts and issue resolution or the

representation of groups/associations before legislative and bureaucratic entities. Another

exception here is that in India state governors are appointed by and serve at the pleasure of the

president. Second, Austria, Australia, Canada, Mexico, Germany, Switzerland, and Spain all use

either ministerial councils or sectoral conferences or some combination of both as IGR

mechanisms. For example, Canada employs such “executive federalism” through First Ministers’

Conferences, that is regular meetings of federal and provincial ministers, and regular meetings of

administrative officials as primary instruments of executive federalism (Watts 1999). Mexico

operates with standing federal-state commissions in several areas: public safety, civil protection

and civil defense, sport, education, health, municipal questions, and fiscal coordination

(Covarrubias 2006). Spain uses some 32 Sectoral Conferences comprised of state and AC

ministers and staff, although only a small number (five or six) are regularly active, particularly

those most involved with the European Union (EU) (González 2006). Spanish IGR has been

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formally shaped by a series of bilateral negotiations and compacts that ushered in administration

of programs at the AC and local levels (Ramos 2006; Colino 2011). A third pattern involves

Belgium, which has a complicated system among state, region, and community, first by a mixed

French/Dutch-speaking twelve-member Conciliation Committee (unless a German-speaking

community issue is at question). If resolution does not occur a 3/4 vote of the Parliament can

delay a motion for 60 days, after which the Conciliation Committee tries to reconcile the issue.

However, this mechanism is not really a mechanism for cooperation but for solving conflicts

(Argullol et. al. 2010: 340).

Horizontal cooperation is another important mode of IGR. Many countries follow the

example of Mexico where the national meetings in various substantive areas are also used for

horizontal coordination or relations among constituent units. Most follow the U.S. pattern of

bilateral or regional contacts, use of interstate compacts (ratified by Congress), and through

organized associations of state officials. An example of the latter is the Association of State

Attorneys General, very active in areas of consumer and business fraud litigation. Five

countries—Australia, Canada, India, Malaysia, and Spain—do have formal horizontal

mechanisms. The Council for the Australian Federation meets without Commonwealth

involvement to achieve interstate cooperation or to form a unified position before the

Commonwealth. It was established by intergovernmental agreement. Canada established a

Council of the Federation in 2003 to manage their interprovincial relations and to deal with the

federal government. It meets without federal government representation. India has created six

Zonal Councils by federal legislation to promote interstate cooperation. Malaysia has a National

Council for Local Governments, attended by state and federal officials to formulate common

policies and for “eliminating room for inter-state variation” (Huat and Chin 2011: 216). Finally,

while Spain does not have a meeting or summit of AC presidents without national presence, in

2008 a group of “encuentros,” or meetings, began among six ACs that had completed revision of

their statutes of autonomy, now expanded to 11 of the 17 ACs. It now meets several times a year,

has a permanent secretariat, and has advanced several legislative proposals (Colino 2011). How

does local government fit into these horizontal schemes? In virtually every case the place of local

government representation is within these bodies, normally by token representation or by some

indirect means.

Finally, involvement of the NGO sector—for-profit and non-profit—through businesses

and associations is reported as a regular occurrence in all of the federal countries but Argentina

and Mexico. In Canada, governments can choose between acting through a public-law entity that

has governmental status and enjoys privileges and immunities not accorded private corporations,

or through private-law corporations or associations. Brazil employs the legally created public

consortia method, whereas India legally establishes societies or foundations. Switzerland

regularly employs the NGOs for services provision in primary schools, public sports facilities,

waste disposal, sewerage, and other local services. They enjoy legal personality under public

law. NGO, private foundations, and associations are recognized under private law, for example

with regard to cultural establishments. Spain and the United States not only follow the Swiss

pattern of contracting but also form special governments for certain services that cut across

municipalities, for example in fire protection and tourism, and form off-budget user fee financed

service corporations, for example in water and infrastructure provision. In most federal countries

today governments at all levels now work with NGOs on a collaborative basis, particularly in

such areas as economic development, social and other human services, arts/leisure/culture,

historic preservation, infrastructure provision, and others.

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Trends in Governance

Today’s local governments no longer operate in constitutional or legal isolation but in

broader systems of governance that include interacting governments and NGOs. Under a

governance approach the workings of institutions, political processes, access to government,

program flows, and administrative tasks reflect all four eras identified earlier: integral state,

welfare state interdependency, NGO connections, and networked activity. Beyond

constitutionalism IGR involves both government and governing (Kooiman 2003). This has

impacted local governments in eight notable ways: interdependence, fiscal dependence,

multilevel system involvement, increasing national political influence, increasing local official

political mobility, national officials with local experience, a broadened scope of national-local

requirements and regulations, and an increasing interest in approaching nettlesome urban process

and policy problems. Together, these forces bring local governments deeply into systems of

governance.

Interdependence. The idea of independently operating governments at any level (once

called dual federalism in the U.S.) is no doubt out of date everywhere. Ronald Watts (1999a: 38)

suggests that when it comes to the boundaries of governments there are no water-tight

compartments. “Modern developments in transportation, social communications, technology, and

industrial organization have produced pressure at one and the same time for larger political

organizations and smaller ones” (4). Watts is referring to the expanded scope of national

governments while at the same time there is a push for more self-rule/citizen involvement at the

local level.

The prime 20th

century trigger was that of expanding welfare states that linked local and

central governments in “deep interdependency” (Flora and Heidenheimer 1981: 3). Loughlin

(2007: 389) explains that the underlying logic of welfare state subnational policy was the

building up of the national polity. Regional and local governments were designed and

encouraged to become agents of their central governments. Most national government social

policies (welfare, employment, social services, economic development) were instituted polity-

wide because central governments were suspicious of local commitment. National programming

and financing was coupled with local level implementation. Central government programs were

“parachuted” into local communities by legal requirement and/or financial inducement. In

federal countries there were the obligatory intermediate landings in state/provincial governments.

Later in the period came new programs – substance abuse, child and family abuse, mental

disabilities, plus newer programs in economic and community development that have brought in

the need for “important intergovernmental adjustments” (Ashford 1988: 19).

The end result is overwhelming degrees of interdependence. A study of over 90 powers

and competencies in 12 federal countries demonstrates that over two-thirds prove to be mixed by

levels. Indeed, the study reveals mixed patterns of involvement in a number of areas beyond

those of social welfare: employment, public security, tourism and culture, environmental policy,

and immigration (Argullol, et. al. 2004), to name a few.

Whereas interdependence within countries was ushered in by growing and expanding

social welfare states it is broadly sustained by national fiscal ties. As is the case with regard to

the U.S., spending for the “general welfare” has become a pattern for fostering subnational

programs, including local, leading to ties where even constitutions have divided them. In South

Africa, regional and local governments are primarily funded by the center (Wehner 2003). In

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Mexico the federal government collects all income and consumption taxes, which then subvents

portions—a matter of high political controvery—to the states and municipalities (Mizrahi 2002:

197). Even in Canada, where local governments are under exclusive provincial powers, the

spending power involves federal payments to individuals, institutions, and provincial

governments in areas for which the national parliament does not have the power to legislate

(Watts 1999a: 1). This power is used to influence provinces and by indirection local

governments, thus effectuating national purposes throughout the system. It is in this way that

governments at all levels have become increasingly dependent on one another as exchanges

occur over federal policy design and local policy implementation, lubricated by the downward

flow of money.

Externalization: Governments in Governance. Welfare state expansion that extends

beyond local governments, coupled with cross-national concerns brought on by globalization,

has brought on a new era faced by virtually all IGR systems, that of meeting those governance

challenges presented by a myriad of outside organizations that share the work of government.

National-local programming has expanded to include a host of NGOs, particularly in the delivery

of direct services. The primary vehicle everywhere has particularly been through the contract for

services (Bel and Fageda 2007). This has brought NGOs into the scheme of government

programming at the local or delivery level, particularly in administrative quarters, and into the

policy stream at national and intermediate levels, as their interests are advanced by national and

second-tier associations (Salamon 1995). Everywhere nonprofit and for-profit NGOs have

become “governments for hire” (Smith and Lipsky 1993). In India, for example, federal and state

departments concerned with rural development programs (agriculture, health, education, social

welfare) are setting up parastatal bodies at the district level. They are registered societies funded

and sponsored and supervised by government agencies as a core element in devolution (Mathew

and Hooja 2009: 194-195).

Meanwhile, local and constituent governments are becoming more active on the

international scene through a variety of trans-border activities, from trade missions and offices in

foreign countries to participation as country-level constituent units with regional governments

and by municipalities or their associations in cross-national bodies such as the EU. Involvement

in supranational bodies means an entire new set of IGR connections, both within country

processes and on the larger scene, for subnational governments (e.g. Closa and Heywood 2004:

61). For local governments, the EU has also meant new sources of intergovernmental funds, for

example EU structural funds for infrastructure, along with a set of supranational regulations (e.g.

in urban waste water, landfills, procurement, working hours, environmental impact) that now

impact local management (Callanan 2003).

The result is that local governments in most countries are also bound up into systems of

governance, a concept captured by Kooiman (2003: 3) as involving public as well as private

“governors.”

The essence of the argument is that governance of and in modern

societies is a mix of all kinds of governing efforts by all manner of

social-political actors, public as well as private, occurring between

them at different levels, in different governance modes and orders.

These mixes are societal “responses” to persistent and changing

governing “demands,” set against ever growing societal diversity,

dynamics, and complexity. Governing issues generally are not just

public or private, they are frequently shared, and governing

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activity at all levels (from local to supranational) is becoming

diffused over various societal actors whose relationships with each

other are constantly changing. There has, judged against traditional

public governing activities, been an increase in the role of

government as facilitator and as co-operating partner. As such it is

more appropriate to speak of shifting than of shrinking roles of the

state.

The governance phenomenon is one faced by governments in most countries, shifting the

effective boundaries outside of the formal confines of local governments, for example with

contracts with some agencies for human services delivery, partnerships with business

associations for economic development, monitoring of the environment with green organizations,

and working with neighborhood associations in planning. Meanwhile, international norms of

gender equity, racial nondiscrimination, immigrant settlement, and human rights impact national

to local operations. In this sense, IGR has now become considerably more than “governmental.”

Municipal Influence. The growth of interdependence and the dynamics of governance has

led “impacted” local governments to become more active federal players on their national stages

(Agranoff 2012). The pattern of growth of Washington, DC representation by U.S. local

government associations (Haider 1974) is well-known. In other federal countries the pattern is

much broader and has been set for some time. In decentralized South Africa the nine largest

municipalities have joined forces in the South African Cities Network to advocate for more

powers and to reduce the influence of provinces over them (deVisser 2009). These include

employee unions and associations of local authorities. In Spain and Mexico (Agranoff 2007a;

Rowland 2007) multiple channels of political linkage exist through national and regional local

government associations, political party channels, direct contacts, and by local government

representatives holding seats on statutory intergovernmental bodies. The latter pattern is most

significant in Australia, where the head of the Australian Local Government Association has a

seat at the all-important first ministers body, the Council of Australian Governments. This

follows a general pattern in Australia of emphasis on formal mechanisms of IGR that include

local input into intergovernmental ministerial councils and joint national-state agency bodies

(Brown 2007: 101). Also of IGR importance everywhere are national associations of local

officials: mayors, financial officers, city engineers, city health officials, city legal counsel, social

services directors, human resource directors, and so on.

The multi-country importance of national representation clearly follows the premise that

global forces and national level programming, legal constraints, and funding rules, or some

combination, penetrate local governments to increased degrees. Contemporary program

involvement is greater than earlier days when a program “came down” with a program guide, a

handful of funding proscriptions, and a few other general rules of federal aid. Today in many

countries programs are transmitted with detailed rules and regulations, standards and practices

that must be followed, along with detailed administrative orders, performance targets, and audit

requirements. This means that local governments are more than funded. Today they are

programmatically and administratively vested in national policy expectations. It is no wonder

that local governments seek external funding and to work with and influence state and national

governments.

Federal Mobility. National officials frequently come to their capitals with experiences in

local government. The political career path in Spain, for example, follows a familiar pattern:

municipal councilor first, perhaps then mayor, then AC deputy and involving a cabinet position,

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and onto national deputy and perhaps a cabinet or subcabinet post. That means the first two

rungs of the office-holding ladder involve local government in some way. Moreover, Spanish

local councilors and mayors are often also elected to their supra-municipal diputación council,

where they learn to advocate for their municipality and deal with regional issues. Also, as a local

councilor in the majority party or coalition, one administratively heads a department, e.g.

finance, public works, environment, or culture and tourism (Agranoff 2010a, Ch. 4), adding day-

to-day intergovernmental program management experience. In addition, local government

associations in Spain and elsewhere attempt to place key local leaders and administrators who

are favorable to their interests in national policy-making and administrative positions. All of this

builds local government understanding and experience that can be carried to higher levels of

governmental involvement. It also provides potential essential linkage wherever policy and

administration affecting local governments is considered. This is a pattern that is true beyond

Spain, particularly in the United States, Argentina, Australia, Canada, Belgium, Mexico, and

Brazil.

National Experience at the Local Level. There is another side to the coin of moving

national programs out to local governments. As suggested with regard to Spanish municipal

experience, in most countries with interdependent programming local elected officials and

administrators develop direct experience in implementing national programs. For example, in

Spain policing and traffic control largely remain national-local administrative concerns. Most

countries have national programs for the preservation of historic sites and communities that

protect important buildings from indiscriminate demolition or use and offer support for

preservation and contemporary use. These programs have numerous rules and procedures

attached to them, from initial archaeological surveys to latter stage rules of signage and public

use. Virtually every federal country has such national programs, rules, procedures, etc. It means

that local officials are directly involved in national programs, since few of these programs are

ever carried out by some arm of “state administration” (which, incidentally, is not the case with

respect to many post-Soviet countries). In carrying out national programs locally, the local

government official becomes part agent or partner of the national government while remaining as

official and/or employee of the local government. It means that important federal experience is

developed, no matter how much national and local interests must be balanced, even if there

happens to be a substantial conflict of jurisdictional aims. It is a lasting tie between the levels.

Similar implementing ties occur in many countries with regard to employment, environment,

education, housing, and citizen participation programs.

National Regulation. The level of national to local regulations that is familiar in the U.S.

is happening virtually everywhere. Most local government regulation in Canada is from the

provincial level, “but when the federal government signs agreements with municipalities, there

are arrangements for financial and managerial accountability. These can be quite complex…”

(Young 2009: 119). In the EU there is also the imposition of Europe-wide policies and attending

national government imposed regulations. For example, over a period of years labor market

policy in the EU expanded from worker health and safety to working hours and overtime, to

labor contract protection, to worker rights, to salary and benefits (Gallego, Gomá, y Subirats

2003: 29). These regulations have been put in each EU country’s legal code and now impact a

variety of practices that filter down to local governments. Non-EU federal countries, for example

Brazil, have also adopted similar labor market regulations, along with standards for anti-

corruption, purchasing, contracting for services, disability access, and recycling and reuse, all of

which have IGR implications.

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Virtually everywhere in the world local governments have become regulatory agents for

their national governments. Such legal controls can be either involuntarily or voluntarily ascribed

to, depending on the situation. In the United States most voluntary regulations are attached as

conditions of federal financial assistance, whereas mandated regulation is tied either to national

powers in commerce or the general welfare or due process and civil rights provisions adjudicated

under the Constitution. Local governments are subject to the directives that follow legislation,

regulations, and court rulings. Local governments and their advocates in most countries are

concerned about the erosion of their local autonomy, particularly by assigning of more

responsibilities by superior orders, without necessarily additional funding (Steytler 2009: 433).

Additionally, where the second-tier governments are the constitutionally controlling agents they

almost automatically add their own regulations to their codes. No matter how they come down,

local governments normally have to designate a person to be in charge of each set of

regulatory/services provisions. With externalization they may also have to educate local

contractors and employers and the general public regarding applicable regulatory programs,

make program audits of compliance, and deal with any potential legal challenges. In the United

States these practices are called “unfunded mandates.” In most other countries they are similarly

regarded as “orders,” inasmuch as compliance is not a matter of choice but one of national

policy. In terms of IGR, however involuntary, it is undeniably another form of national-local

connection.

Revenue Dependence. One reason why regulations are considered to be simply “orders”

in most countries is because they often explicitly follow the flow of revenue downward to local

governments. In Malaysia all major taxing powers remain with the federal government and thus

all subnational levels rely on transfers to the state authorities and then on to local governments.

Less than 20 percent goes to the states but nearly half of this is subvented again to local

governments, which has created persistent deficit situations that in turn have led to financial

bailouts and special grants (Means 2002). Everywhere local government revenue dependence on

the center is the norm, even in more compartmentalized Belgium or Canada. Actually at the

dependence extreme is the aforementioned situation in Mexico, although municipalities, the only

local governments, do have exclusive control of property taxes, a meaningless source of revenue

for most small towns and villages (Mizrahi 2002: 198). In Australia, local governments are

highly own source funded out of local property taxes but are also dependent on federal transfers.

All transfers in Australia are federal, inasmuch as since the 1940s all income taxes are collected

by the Commonwealth. Local governments receive funds from general Financial Assistance

Grants, local government bloc grants, and through road grants. In addition, targeted grants from

the Commonwealth also flow through the states to municipalities for social services, child care,

elderly and disability programs, and native programs (Brown 2007: 106-107). At the

independence end of the spectrum is that of Switzerland, where municipalities have income and

property tax capacities that put them at just over 80 percent of their revenues as own source, with

most transfers coming from the cantons (Bachtinger and Hitz 2007: 77).

The fiscal dependency on the center picture for other countries falls somewhere between

these extremes. A detailed picture is difficult. Subnational data tends to lump together second-

tier and local revenues. Watts (1999b: 52-53) reports that federal government revenues as a

percentage of total revenues range from a low of 48 percent in Canada and Switzerland to a high

of 87 percent in Malaysia and Spain. Australia is at 74 percent of revenues and the United States

is at 65 percent federal. Subnational governments, both second-tier and local governments,

receive 72 percent in transfers in Spain (where constitutionally all taxes must be ceded from the

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center), 40 percent in Australia, 30 percent in the United States, 20 percent in Canada, and 19

percent in Switzerland. In an interesting study of fiscal transfers in Brazil Rezende (2011: 76)

found that transfers to small cities in both metropolitan suburbs and in rural areas were almost

three times those of big cities. Nevertheless, all cities received at least one-third of their funds

from national transfers.

Brazil is an example of an intermediate dependence position. Municipalities can levy

taxes on property and on municipal services but are also entitled to 22.5 percent of the net

revenues from the income and value-added taxes under that country’s Revenue Sharing Fund of

the Municipalities (Mendes 2002: 97). More detailed local transfer data is available for Spain. It

is important to keep in mind that second-tier ACs are almost exclusively financed by national

transfers (except for minor few ceded taxes/tax sharings). Among the 17 ACs, the range is

considerable from a low of 12.3 percent AC revenues in Valencia transferred to local

governments to a high 74 percent in the Canaries and 52 percent in Navarra (where the

provincial and AC governments are merged and a special tax sharing regime exists). The typical

region transfers from about 25 to 40 percent of its revenues to local governments (Ramos y

Cicuéndez 2005). Likewise in South Africa the tax allocation breakdown in 2003-2004 was 40

percent national, 56.7 percent provincial, and 3.3 percent local (Wehner 2003: 24). However, the

local transfer portion is deceiving because most provincial revenues (80 percent) were dedicated

or re-transferred to obligated services delivered within local governments for education, health,

welfare, and social services (ibid.: 9).

While the data are clearly not ideal a picture of vertical fiscal imbalance is clear. Local

governments everywhere raise substantial shares of their own revenues but they remain highly

dependent on transfers, particularly national transfers, sometimes once removed, to meet their

own obligations along with those imposed by higher levels. The greater the centralization of tax

powers and reliance on transfers the greater degree of what has been called “consumption

federalism” (Solé-Vilanova 1990: 351).

Social and Environmental Policy Challenges. Local governments everywhere need

national partnerships and are facing the challenges of meeting social problems that are

manifested within their space but exist due to forces not completely in their control. The urban or

municipal located problems of structural unemployment, substance abuse, the impact of crime,

homelessness/substandard housing, immigration integration, and environmental challenges come

immediately to mind. In many of the largest cities in federal countries—Johannesburg, Rio de

Janeiro, Mexico City, Mumbai, New York, Los Angeles, Madrid—their institutional, social, and

environmental support structures have not kept up with their expanding populations. These cities

are the most likely to experience endemic housing shortages, poor schools, weak health services,

along with inefficient energy use and waste management. This is an arena where the local

political influence on the national scene is clearly important. While more focused attention has

been paid to these national-local urban concerns in the U.S. (Cleveland 1969; Wolman 1999;

Baumgartner and Jones 1993; Kingdon 2003; Lawrence, Stoker and Wolman 2010), they are

very real in numerous federal systems. One cross-national assessment of cities’ multilevel

systems (Lazar and Leuprecht 2007) reports that generally national-local efforts are better at

meeting local basic needs than they are at attacking such policy challenges.

Given the “junior partnership” status of most local governments in federal systems this is

a difficult challenge. Where the locals are more effective in multi-sphere governance, e.g.

Switzerland “…where local influence on national policy-making and implementation is most

substantial. Specifically, local governments…appear to have a greater voice in making national

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policies that affect them than the other studied six [countries] do” (Lazar and Leuprecht 2007:

12). In this comparative study, at the more negative end of the spectrum were Mexico and South

Africa, both emerging from hegemonic party systems (Ibid.). Mexico demonstrates the reality of

government failures, most prominently at the municipal level (Grindle 2007) in such key issues

as poverty reduction, crime control, and environmental protection. In South Africa national

municipal policy is reported as overregulating local government, a complex and burdensome

yoke that makes attacking problems near impossible. Somewhere in the middle stands the U.S.,

where big cities have given way in importance to suburbs and smaller places, and Australia,

Germany, and Spain, where city agendas have come and gone depending on the politics of the

ruling party and fiscal conditions. In Germany, for example, where local governments have a

dual role in self-government and in services delivery for upper tiers of government, “the leeway

granted to local politics in Germany’s federal order remains very limited” (Lazar and Leuprecht

2007: 13).

This overview of cross-national patterns ends where the assessment began, that of

growing federal interdependence. Given the “subordinate” constitutional and legal status of local

governments in most systems of governing, and their relatively weak political positions vis-à-vis

second level governments, along with fiscal dependence, means that breaking through meeting

urban agendas is a battle that municipalities cannot fight alone but must actively engage in

various IGR strategies. Their legal, fiscal, and political dependence provides few alternatives.

Urban Challenges

Intergovernmental forces have had an important impact on the ability of local

governments, particularly municipalities, in meeting their current challenges. The services

pressure for provision of such basic amenities as water, waste water, lighting, local roads and

bridges, and public health/sanitation mean that many of the larger issues have to be put aside.

While traditionally services are local the case has been made that they are now framed by

standards and regulations set by second-tier and/or national governments, and as previously

indicated, sometimes by international bodies. These instruments of IGR carry along notable local

process, administrative, and cost implications. Moreover, financial subventions also contain

standards and regulations. In turn, these tools and IGR approaches lead to the need for trained

technical and financial staff at the local level who cannot only meet externally required

expectations but can work collaboratively with counterparts in nearby governments, higher level

officials and NGO providers in meeting difficult problems. This process, in turn, leads to greater

policy implementation interactions on behalf of local interests before second-tier and national

governments, leading to several additional challenges that have made IGR dynamic on the local

scene.

Welfare State Transmission. Local governments in federal systems are at the end of the

“transmission belt” of the welfare state in the sense that it is within the boundaries of the local

jurisdiction that many housing, health, pension, education, and social services are delivered,

often by national and/or state offices within local borders and sometimes under local auspices. At

a minimum local governments maintain responsibility for the remaining social and economic

problems that do not fall neatly into higher level government welfare state categories. Clearly

long term unemployment is one of these issues, inasmuch as national economic trends have to be

buttressed by promotion of local economies to create employment opportunities. Local housing

arrangements also fall into this area of policy and promotion, along with providing adequate life

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amenities that will attract and maintain citizens, including arts, culture, and entertainment. Social

concerns also impact municipalities beyond basic welfare state provision. One current example is

the settlement of immigrants and the policing of illegal immigrants. The latter is normally a

central government function but immigrants land in cities. Federal governments often pass on

this function to state-local authorities to work with NGOs and employers to register immigrants

locally. Meanwhile, social services aimed at settling immigrants and enrolling immigrant

children in school are organized by local governments working with service organizations and

voluntary immigrant associations. What evolves in immigration is a series of local networks held

together by churches, local employers, immigrant associations, government agencies, and private

social services contractors (Zapata-Barrero 2004), that is a series of public-private extensions of

the federally generated welfare state that has distinct local government overtones. In effect, the

welfare state becomes both nationalized and localized.

Infrastructure Provision. This is also a local government function that has become

progressively intergovernmental as transportation has become national and global, and the fiscal

advantage is national. Municipalities cannot muster the support and financing exclusively to

provide airports, roads, bridges, water and sewers, waste treatment, parks, libraries, sports and

cultural facilities. As a result, federal financial assistance and/or partnerships with the non-public

sector is the norm for at least some infrastructure support. Often finance support is coupled with

bonding authority to pay back over time out of user fees and/or general taxes. Australia, for

example, has a federal council to guide public borrowing. Argentina has a federal projects

council. In most federal countries an infrastructure project begins with a local plan, often

reviewed by the state/provincial authority. Funding then comes from a variety of second-tier and

national programs. In Ohio in the U.S., for example, there is a state water authority and a public

works commission that funds infrastructure projects, which can then be combined with federal

Community Development Bloc Grants and various transportation funds. EU countries fund

infrastructure particularly through its structural funds. Spain’s government in Madrid operates a

series of discretionary project grants that are channeled through its provincial (supra-municipal)

governments. In 2009 a 33 billion euro stimulus package included local government road

building, transportation infrastructure, and environmental projects. A typical municipal

infrastructure project in Spain normally involves about 25 percent local funding, 25 percent AC

funding, and 50 percent central funding. In turn, beyond the funding plan are hundreds of IGR

interactions for local governments and numerous oversight contacts regarding land acquisition,

land use plans, contractor selection, construction standards, construction reviews, and the like.

All of this makes local infrastructure provision highly intergovernmental at both the policy

making and implementation stages.

Developing the Local Economy. The same pattern holds today for promoting local

economies. No city can go it alone today. In this case most federal countries turn to their second-

tier governments, inasmuch as they are considered to be in competitive positions and thus natural

forces to promote growth. In Switzerland the cantons take the lead in economic development but

there is a federal Council of Heads of Departments of Public Economy. In Belgium the Central

Economic Council is involved in some promotion but the regions are primarily involved in this

function.

Intermediate governments in federal countries work with local governments primarily in

enabling the various means of economic development. First, they legally authorize a set of

economic tools that help competitiveness and business location/expansion. This includes various

types of tax and regulatory relief, technical assistance, and community assistance. Second is

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infrastructure support, ranging from building access roads to financing arrangements. Third,

states/provinces provide business attraction and planning technical assistance. This is particularly

employed with regard to small governments that lack a corps of professional staff. Fourth, states

try to facilitate access to venture capital and engage in promotional activities. Some have small

business investment funds whereas others provide web-based access to prospective capital

sources. These functions intergovernmentally tie local governments and prospective businesses

to their intermediate governments (Agranoff and McGuire 2003; Ross and Friedman 1991;

Clarke and Galie 1999).

Supranational Influences. Local policy-making in an increasing number of federal

countries reaches beyond the nation-state and includes supranational regimes. Several facets of

trade and transportation policy that affect local economies are part of the North American Free

Trade Agreement that involves Canada, the United States, and Mexico. They include standards

and weights for trucks, hours of work for truck drivers, and access to borders that supersede state

and local government limits. These “local” standards imposed federally come about through the

treaty-making powers of each country. In Europe, EU policies obviously impact Austria,

Belgium, Germany, and Spain, as well as non-federal countries, in many areas including

infrastructure provision, urban development, and immigration. EU legislation and related

directives normally flow through national central ministries to subnational governments. They

impact local authorities in their roles as: 1) employers, services providers, and property owners;

2) monitoring, enforcing, and listening bodies; and 3) agents for the development of their

territory. Some examples include: waste water collection and treatment standards; reduction of

biodegradable waste in landfills; contracting standards for public works, supplies, and services;

employee working hours standards; environmental impact statements; and cooperative standards

for river basin/estuary water management (Callanan 2003: 408-409). All of these supranational

directives have important financial and administrative load implications for local governments.

In the EU there are also more indirect effects on motor vehicle mass weights, road maintenance

requirements, public accounting and reporting, health and safety regulation, recycling targets,

water quality, and bird habitat sites. While there currently is no EU housing policy, housing

management and “access” rights exist for those persons moving through EU countries. Finally,

EU Stability Pact agreement standards now limit public debt for all governments—central-

second-tier-local—to three percent of GDP and has had the impact of reduced central assistance

to local governments. In these ways a supranational regime can intergovernmentally filter

through interdependent federal government systems, thereby adding new dimensions to the

federal policy equation.

Enhancing Local Capacity. Another important local government challenge is second-tier

empowering of local governments to anticipate area-based problems, giving them the ability to

coordinate multiple forces. South Africa is reported by Murray and Simeon (2011) to be

experiencing low levels of local intergovernmental capacity at subnational levels given the

concurrence of powers, close fiscal ties, and the extent of administrative supervision by

provincial and central governments. This they attribute to a combination of excessive central

domination, multiple overlapping intergovernmental councils and bodies, inattention to

deepening democracy by promoting citizen engagement, and confusion regarding roles in

overseeing local governments. In Canada, a rare exception to diffused empowerment is either

provincial assumption of local services or a move to consolidation. Governments are combined

or special regional authorities are created (Sancton 2002). But consolidation is almost never the

answer elsewhere. The U.S. tends to rely more on competitive multi-government networks of

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local public choice. State-local concepts of home rule, fiscal independence, and the legal strength

of most forms of local government executive powers actually allow for such extensive leadership

in making connections (Agranoff 2007). Spain, Mexico, and other countries have moved to

strengthen the local chief executive in these directions, either by direct general election of

mayors or by giving local councils enhanced powers over disparate local agencies and special

governments (Agranoff 2010a; Grindle 2007). Other changes in this arena fall into the category

of strengthening the mayor’s executive reach: greater contracting powers, professionalization of

executive department leadership, reduction in the size of local executive bodies, and the

employment of hired executives who manage under the mayor or council, i.e., the city

manager/city council coordinator form in the U.S. These moves are designed to enhance the

“power of general competence that endows municipalities with the right to undertake policy

initiatives in all areas that are not explicitly precluded or defined as the exclusive responsibility

of another layer of government” (Denters and Rose 2005: 247).

The New Public Management. Reform of local public administration has largely followed

the cross-national new public management (NPM) movement that has emerged in both federal

and unitary countries. Generally imprinted from business, NPM focuses on inside operations. It

includes three major foci: 1) a shift from government to governance, as mentioned earlier,

invoking a host of NGOs in the work of government; 2) a shift from direct service provision or

“rowing” to enabling outside competition by government “steering”; and 3) a move to refocus

government from itself to the “customer” and “user” of services (Snape 2004: 63). Among the

NPM instruments are services privatization, increased managerial flexibility and deregulation,

competitive bidding for services delivery by government and non-government agencies,

performance-based contract management, citizen input into management decisions, municipal

companies that are self-sustaining and off-budget, institution of performance benchmarks,

performance evaluation, imposition of national minimum standards of service, internal

devolution of power/decision-making to services departments, and strategic (cross-entity) local

management (Hood 1991). All of these instruments reinforce the need for the IGR networking

approach identified earlier. Obviously no one country or even single government has instituted

all of these instruments, but they have become important means of facilitating local capacity to

play the game of interaction with other governments and of making public administration work

at the local level. Public management experts believe that a number of these NPM approaches—

performance measurement, control of results, benchmarking—along with management

information systems, will become even more valuable in the future (Prueller 2006: 21).

The current wave of privatization of services and deregulation of programs (Bel and

Fageda 2007) goes along with NPM as they impact local governments. This, as Loughlin (2001:

388) concludes, has led to the development of a competitive regionalism, as regions and cities

find themselves competing within and across countries, for example, for EU funds and for

foreign investors. Coupled with these forces are other practices that spread from country to

country, such as competitive public bidding and internal markets (cross-jurisdiction) for securing

public services.

Creating Partnerships. NPM and governance in general means that local government not

only cooperates with other governments but partners with them and with NGO, another cross-

national influence. As Denters and Rose (2005: 253) conclude, what a “local council does” has

to be replaced with a conception that local public decision-making “increasingly involves multi-

agency working, partnerships, and policy networks which cut across organizational boundaries –

in essence governance.” These inter-organizational or cross-entity moves include partnerships

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and alliances with nonprofit and for-profit private organizations, cooperation in services delivery

among adjacent governments, establishment of quasi-nongovernmental organizations (local

housing authorities, hospital trusts), local community neighborhood public-NGO partnerships,

joint public-private nonprofit associations, public-private economic development corporations,

intergovernmental partnerships and networks, public-private strategic planning partnerships, and

private joint development corporations. These interdependencies introduce newer dimensions to

IGR, conclude Blanco and Gomá (2002: 29). In orchestrating these cooperative partnerships and

networks, local government does not lose functional responsibility but takes on an additional

role; “city governments and their officials possess some legal and fiscal levers that can keep

governmental units at the centre of collaborative transactions…that outweigh NGOs” (Agranoff

and McGuire 2003: 43; see also Márquez 2007: 131).

Reinforcing Local Democratic Choice. A final cross-national trend involves enhancing

local democracy by strengthening alternatives to the electoral channel through civic engagement.

Many countries have seen a steady downward turn in electoral turnout rates for local elections,

and in other countries turnout has been traditionally low. Nevertheless, interest in other forms of

local political participation has not necessarily waned, as global forces have encouraged “rooted

cosmopolitans” to take contentious and/or concerted action at the local level (Tarrow 2005). This

has led to the implementation of a series of local democratic instruments in different countries:

local referenda; petitions that are transformed into council agenda items; services user boards;

citizen-written motions that go on local ballots; hearings for prior appraisal of actions; permanent

consultative forums (disabled, women, immigrants); future (planning) scenario workshops that

involve citizens; multistage—look, appraise, act—citizen dialogue; partnership boards to

encourage social integration; youth councils; opinion surveys; consultation by Internet; and

calculating an electronic democracy balance sheet.

These approaches, obviously influenced by the NPM customer orientation, “define the

citizen as a ‘consumer,’ making choices about the kind of services he or she wishes to avail of”

(Loughlin 2001: 391). These mechanisms, which are designed to improve relationships between

local government and the general public, have to some degree also been introduced in a number

of local governments in federal countries (Font, Font, y Subirats 2002).

To sum up, contemporary local governments are now challenged with more than the life

amenities. They are no longer exclusively the “water and sewer providers” of federalism. They

operate at the street level of the welfare state, orchestrate important infrastructure provisions,

actively promote their economies, are impacted by forces beyond their borders, engage in a

myriad of connections and partnerships in area-based and functional means, and undertake newer

forms of management in the public sector, while promoting new forms of democratic choice. For

academics, all of this change calls for a newer, non-traditional local government research

tradition.

Conclusion: Four Emergent Research Questions

In the second decade of the 21st century local governments in federal systems are closely

embedded in their systems of governance. They are no longer insulated from the trends of

governing that extend up and down the federal system. Bulpitt’s (1983: 15) characterization of

British government in the 19th

century as divided into “high” and “low politics,” where central

and local officials were isolated perhaps no longer applies anywhere, but particularly not in the

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federal systems of the world. Working together at policy and fiscal programs, inside and outside

of governments, appears to be the norm that transcends any constitutional divisions of power.

Local governments as a result should neither be the “forgotten children” of federal

operation nor should their seat at the table of intergovernmental affairs be at the edge of the

room. IGR today integrates local governments in federalism in important ways that overcome

any legally subordinate status as they have become policy implementers, as regulated bodies, as

deliverers of many different types of local services, and as promoters of the community within

their basic civil jurisdictions (Agranoff 2012). It is perhaps less important who allocates their

powers than how the powers and responsibilities that they experience work to advance local,

state-provincial, national, and supranational aims. In effect, it is an “elevating” position of local

governments that has come as a result of the transformation of IGR from more divided powers to

welfare state to externalization to networking. The question remains, then, why do local

governments continue to experience such junior partner or secondary legal and political status

and relative invisibility within their federal systems? This is the first broad concluding research

question.

To extend this thinking, are there integrating forces that local governments have that

make them key partners? The foregoing discussion implicitly suggests two important answers.

First, the local entities are at the implementing or end stage points of the “food chain’ of policy

and program. It is where people live and work and their governments at the local level are at a

most primary contact point of government. Nevertheless, their impact is primarily related to the

routines of everyday execution in the hands of local officials. They unfold thousands of times

behind the scenes and can be easily overlooked in IGR. Second, it is primarily locally where the

enduring challenges of promoting economies, eliminating poverty, integrating immigrant

populations, and enhancing democracy take place. Higher level governments can enable, the

locals directly experience and execute. Moreover, externalization is most intense at this level, as

more direct services are subject to be contracted and potential partnerships are forged. For

example, here is where the poor mostly live and where sewers and drainage projects cross sectors

and jurisdictions. This suggests a second broad research question. How does relative federal

intergovernmental power line up in the light of those who have the tools of law and money and

who have the tools of execution? Understanding relative power relationships are distinctions

widely recognized and analyzed only in broad perspective but rarely researched in the kind of

detail required to understand the IGR of how local governments fit within federations.

As government blends into governing by externalization it means that governmental has

incorporated the non-governmental. Adding to long-standing federal grants and regulations as

the core of IGR, are new partnerships, joint ventures, mutual services agreements, contracts for

services, loans and interest buy-downs, and many other tools of government (Agranoff 2012;

Salamon 2002). It is therefore time to focus on governance research, that is managing across

boundaries and sectors. The probability is that it is unlikely to be a “one best way” to manage in

this post-bureaucratic setting. Fenwick and McMillin (2010) argue that in this era of governance

there is no unifying prescription for public service reform. Actors will have to make sense out of

the governance environment through their lived experiences and the meaning assigned to what

they do. This is the only possible response, they argue, to an environment where the past is not a

good guide to the future. Thus, broad research question number three involves a detailed,

process-oriented organizing perspective that frames language that asks the core performance

question related to problem solutions (Stoker 1998). How does the organization and operation of

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governance processes (e.g., managing intergovernmentally) contribute to public problem

resolution and add public value?

That raises the final question, related to how IGR has evolved beyond its early legalistic

foundations to involve networks as forms of managing interaction. It focuses on where the

boundaries of the state in governing are located. Theories of the hollowed-out state and

bureaucracy’s end fall short of the realities. Contracting and services delivery outside of

government plus networks are indeed signature forms of the information age but continue to

operate in the shadow of bureaucracy. The latter has taken on new roles but has not withered

away. Research makes clear that government agencies remain as the central and authoritative

partners in networked arrangements, guiding interacting partners toward decisions that respect

law and political considerations, regulatory and fiscal concerns, and promoting a fair playing

field among participants (McGuire and Agranoff 2010; Olsen 2006). Wondolleck and Yaffee’s

(2000) study of ecosystem networks reveals the verity that government agents are the final

decision makers. Public agency representatives “provided essential leadership that guided the

groups while simultaneously representing its own interests in the process. It ensured the side-

boards provided by existing law and regulations were in place and understood and that those

individuals present recognized that implementation of decisions could occur only through

established administrative process…” (244). Hirst (2000) concludes that government remains the

agent that pulls the various forces together, distributes power and responsibilities, is the focus of

political identity, and is the main instrument of political legitimacy. And in IGR “…each public

agency is a bounded jurisdiction; it maintains day-to-day operational control over any potential

moves that involves its programs” (Agranoff 2007b: 219). The fourth research question then is,

what are the boundaries of the “federal state” as governments operate with its interlocutors in

IGR?

The status of local entities in federal countries needs to be recognized and elevated in

important research and conceptual terms in the era of the network. Regardless of their

constitutional position vis-à-vis their systems they have become integral parts of their country’s

governance systems. In the network era federal IGR in turn needs to be understood as three-

tiered in consideration in place of two-tiered consideration. It is an ambitious but realistic

prescription.

IPSA-Madrid 7/12

21

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