Are overlapping state and federal responsibilities a good thing?

An Essential Research poll published today on Pollytics blog is one of the most interesting I have seen on federalism:

Question: Do you think the following services should be mainly the responsibility of the Federal Government or State Governments?

I suggests that the Australian public is not quite as centralist as other polling can lead us to believe. The federal government does not have majority support for exclusively taking over any of the areas of traditional state responsibility – though they are ahead of the states on all but water supply. The interesting point in this poll is the significant support for joint state and federal responsibility.

The political class conventional wisdom – among centralists and federalists alike – has been that joint responsibility is a problem. It leads to duplication and the ‘blame game’.

In various speeches and papers over the last few years (eg this one), the economist Jonathan Pincus has been the most significant dissenter from this perspective.

Pincus argues that ‘vertical competition’ – competition between the states and the Commonwealth, as opposed to the ‘horizontal competition’ between states traditionally favoured by federalists – by-and-large has served the Australian public reasonably well.

If the states perform badly, people turn to the federal government for solutions. This is pretty much what has happened. But despite the general loss of confidence in state governments, being able to turn to them to solve problems as well has its benefits. It gives voters two chances at resolving their issues. Governments at each level eager for voters respond to their concerns. The Essential Research poll shows significant minority support for the Pincus perspective.

The Pincus position seems to me to have considerable merit. The idea of horizontal competition between the states, while theoretically attractive, struggles to move beyond a few supporting examples, usually relating to tax. Not many people move states for better health or education systems (though one reason I don’t want to move back to Sydney is its dysfunctional health system). It’s far easier for citizens if governments compete for their support in the same geographic area.

So maybe we should not worry so much about the bureaucratic messiness that sometimes emerges from joint responsibility. It is the price we pay for for a system that is much more responsive overall than one based on exclusive state or federal responsibility.

7 thoughts on “Are overlapping state and federal responsibilities a good thing?

  1. What does the actual empirical evidence say on the matter? It’s easy to see how it might help in places with hopelessly dysfunctional governments like NSW, but it’s easy to see the flip-side also where you proliferate more rules, bureaucracy, conflicts, etc. , especially because we’re talking about governments and voters, not businesses.


  2. If the states perform badly, people turn to the federal government for solutions. This is pretty much what has happened. But despite the general loss of confidence in state governments, being able to turn to them to solve problems as well has its benefits.

    Can you think of any examples of the other situation — people turning to state governments if the federal government is performing badly? Sure, some states are quite protective of particular responsibilities, but I think the vertical competition model relies on the public occasionally demanding that their state take things back from the commonwealth. I can’t imagine vertical competition being effective if it’s a one way street, so to speak.


  3. By the nature of this it is hard to get comparative empirical evidence. Most of the complaints revolve around hospitals, but it is not clear to me that exclusive responsibility will solve what I think are problems inherent to trying to manage them on a free to the patient basis. I prefer joint responsibility on universities and schools.


  4. Leon – I don’t think the theory relies on the states moving in on Commonwealth responsibilities, since constitutionally there are few of these. Rather in areas of original or evolved concurrent powers voters make demands of both levels of government. This has clearly been the case in health and education, the two biggest issues of the day if the ‘most important issues’ polls are a guide. The Howard government was sometimes criticised for letting its ‘share’ of funding for various services drop relative to the states, but this is perhaps just another way of saying that there was a different political dynamic at state level which meant that they were more responsive.


  5. Andrew, the Pollytics question is not well put. It should have made a distinction between the funding and administrative responsibility. It may be that most see a centralist funding responsibility – but not an administrative one.


  6. Fred – While that is obviously an important distinction for those who have to design policies, I don’t think it is one a pollster should try to make as it requires more knowledge of how things are done than most respondents are likely to have.


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