Federalism and Constitutional Reform: What it means?

With the release of the draft of the new constitution for public feedback, the debate of federalism has been on the mainstream. The Liberty Discussion Group also picked up a reader on federalism to hone their understanding of the concept of federalism and some of the attributes of a competitive federalism. As an exercise, the members of the group met on the 29th of August 2015 to discuss James M Buchanan’s essay “Federalism as an Ideal Political Order and an Objective for Constitutional Reform.

The takeaways for the members of the group were:

1. In a competitive federalism, there must be constitutional limits on the domain of the federal government to protect the citizenry from the discretionary powers of an all-powerful federal government.

2. The states must be granted the right to secession as a mechanism to put a check on the powers of the federal government.

3. In order to capacitate the states (and the subsequent local governments) to handle the local issues effectively, guarantee accountability and withhold the demands of the citizenry, the institutions of the unitary governance mechanism should be devolved.

4. There should be provisions so as to allow competition between the states to reap the benefits of competition just as well as consumers benefit from competition between the producers in a free market.

Participants had their doubt about whether Nepal should work on making its decentralisation more efficient or go for an outright devolution altogether. Members also had concerns over whether federalism based on identity of the people is the right way to go about federating the country. The session ended with a lot of the participants’ concerns discussed upon, and a general understanding to further the discussions through the social media platform of the group.