Should More Power be Delegated to the Regions?

Georgia right now is a unitary state – most of the decisions are made at the level of the national government. Except for Tbilisi and Adjara, the governors in the regions are directly appointed by the president. Regional and local budgets (even in Tbilisi and Adjara) are based on subsidies from the center and not on taxes collected locally. This system removes almost all accountability of the regional and local governments to the people they are supposed to govern, and makes them totally dependent on the national center.

Recently, there has been talk about making the positions of all regional governors elected – similar to what is currently being done in Tbilisi and Adjara. While this is a step in the right direction, I believe that it is only a minor step that should be followed up by more serious commitments to federalism. To put it bluntly: Georgia should move away from being a unitary state and adopt a federal form of government.

Before describing what steps I believe are necessary to fulfill this transition, I would like to briefly discuss why federalism is a better form of government. There is a lot of literature written on advantages and disadvantages of federalism and its contrast with unitary systems of government, so, I will hardly say anything new. The disadvantages that are typically put forth by the critics are:

1. In any federalist system there is at least some confusion on which powers are within the competence of the national government and which are within the competence of the regions. In a poorly designed system this confusion might render the government utterly ineffective

2. Federalism can make lives of ordinary people more complicated as they need to be aware of different sets of laws that exist in different regions. This also applies to running a business as regulations might vary greatly from one region to another

3. Some people argue that federalism cannot function well due to popular ignorance. That is, most people know much less about their local governments than they do about the national one. For example, in the U.S. people quite frequently are unaware of who their mayor or governor is, and voter turnout in local elections is frequently below 25%

4. There is more regional inequality under a federalist system than under a unitary one. One reason for this is that each region gets the benefits of its natural resources, and the regions which are natural-resource-poor are left behind

5. Lastly, it is possible that federalism can make it easier for a region (or a group of regions) to rebel against the national government, thus, jeopardizing the existence of the country

Some of these points have merit – though I would say that many of them can be addressed by designing a proper federal system. But I would say that even these negatives are overshadowed by the benefits of federal form of government:

1. Federalism introduces another actor into the system of “checks and balances.” In a modern democratic state the power is typically separated between Legislative, Executive, and Judicial branches. Under the federal system, the fourth player are the regional governments. In other words, there is more separation of power, and as such less possibility of authoritarianism or tyranny

2. Local governments know local issues much better and thus, the policies can be tailored to specific regions. There doesn’t need to be a single national policy that works for people in one region but doesn’t really work for people in other regions. This arrangement reduces the “tyranny of the majority”, at least on the national level

3. Federalism provides a “laboratory” environment for policies and promotes innovation. That is, a region can adopt a novel policy and if it proves successful, other regions might follow. If the policy proves to be unsuccessful, the damage would be contained within one region and would not affect the entire country

To summarize: the core advantage of federalism is that it enables a much greater degree of personal freedom, ensures much better protection of human rights, and stimulates progress. Under federalist systems, each region competes with another region to offer a better environment for for its people. The regions that ignore the needs of the people in one way or the other, face the danger of falling behind and being deserted by its inhabitants. This keeps the politicians in check and prevent the governments from going haywire with their policies.

Now, what does Georgia need to do to move toward becoming a federalist state? Well, there would be significant changes to the constitution required, and the general principles should be as follows:

1. Georgia should be divided into 12 – 15 regions with equal level of autonomy
2. The government of each region should be elected by the people of that region – without any oversight and control from the national government
3. The regions should have the power to raise their own revenues via regional and local taxes. The subsidy of the national government shall not exceed 10% (or some similar small number) of the regional budget
4. Clear separation of powers should be defined between the regional and the national governments

Point #4 would probably require the most work. The difficult part would be to strike the right balance between how much should be left to the national government and how much should be delegated to the regions. I do not think that delegating almost everything to the regions (except for national defense and foreign policy) would be appropriate for Georgia. For example, having different criminal codes for each region in Georgia is probably not a good idea (though in the U.S. each state defines its own criminal code, save for a few crimes that are designated as federal crimes). In my opinion, the following could stay within the national competence:

1. National defense and border protection
2. Immigration and naturalization laws
3. Foreign policy
4. Civil and Criminal law, including: property law, contract law, tort law, family law etc.
5. Part of commerce regulation, specifically: bankruptcy law, competition law, corporate law
6. Part of law enforcement, specifically: agencies requiring significant investigative capabilities (e.g. against organized crime)
7. Part of general welfare: some support to education system, part of the safety net etc.

The regions could assume whatever remains. Specifically:

1. Majority of infrastructure investment
2. Day-to-day law enforcement (e.g. patrol) and investigation of local and minor crimes
3. Moral laws (or laws regarding “victimless crimes” – e.g. gambling)
4. Utilities and emergency services (probably on local rather than regional level)
5. Most of the education (e.g. universities and public schools should be subjected to regional authorities)
6. Big part of safety net – e.g. re-training programs, shelters for homeless etc.
7. Labor laws – e.g. minimum wage
8. Land-use and Natural Resource laws
9. Most of commerce regulation: occupation licensing, business licensing, building codes, construction permits etc.
10. Health and safety standards, environmental regulations

I am sure, if current Georgian government decides to pursue the ideas of federalism, there will be a lot of debate on what these two lists should actually include. And the final result may be very different from what I’ve outlined above. But the important point is to start thinking about separating national and regional governments and empowering the regions to be more autonomous. The current government has a unique chance in this regard as the idea of delegating more power to the regions is supported by the opposition. In the end, following through on this will make Georgia a more democratic, free, and successful country than it currently is. And this is better for everyone involved.