Mythologies of intergovernmentalcooperation (and competition) in Canada

David Péloquin

Presentation to the2nd Annual Horizontal Policy Management Conference

Ottawa, April 16-18, 2007

Contents

Cooperation and / or competition

Cooperation: from spontaneous to structured

Accountability: a double-edged sword?

Key messages

1

2

3

4

Cooperation and / or competition1

The myth of the “benevolent central government”: no distinction made between the broad public interest and that of

the central government central government viewed as principal – not as agent sub-national governments viewed as agents of central government

under its ultimate control

Implications: supremacy of central government accountability of sub-national governments to central government

44

Who are the clients? (and who are their agents?)

The myth of the “unworthy servants of the people”: governments (central and sub-national) viewed as largely

self-interested – not primarily motivated by the public interest governments as (untrustworthy) agents of “the people” requiring

close supervision through a system of “checks and balances”

Implications: inter-governmental competition (both horizontal and vertical) as a

supplementary “check and balance” primary accountability of all governments to “the people”

55

Who are the clients? (and who are their agents?)

The reality of multiple “publics” and their many “agents”: multiple stakeholders – electorates, media, academics (and

civil society generally) as well as governments – with overlapping (and often shifting) identities and allegiances

governments as composite entities with multiple centres of power – most motivated by the “public interest” (but some maybe not)

inevitable competition among governments, their various agencies and organizations within civil society for support / legitimacy among subsets of the population

66

Who are the clients? (and who are their agents?)

Significant economic literature on the existence, advantages and challenges of competition between and within governments: governments not benevolent dictators but complex organisms that

pursue an amalgam of private and public interests for the citizen – as for the consumer – a multitude of suppliers of

public services (and competitors for their allegiance) is potentially beneficial as a source of “checks and balances”

But: citizens also want order, clarity in roles/responsibilities and intergovernmental harmony (as public goods in/of themselves)

Intergovernmental cooperation within an (inherently) competitive dynamic

77

There is no necessary contradiction between: an underlying competitive dynamic between governments the much-observed phenomenon of governments cooperating

(usually in the public interest)

However, this happy outcome of a (different kind of) “invisible hand” depends crucially on: a high degree of (overlapping) policy autonomy on the part of more

than one level of government (not a “joint decision trap” !) an engaged electorate (supported by media and “public academics”)

willing and eager to hold them accountable

No necessary contradiction between cooperation and competition

88

Provincial-local

Federal

0 50 100 150 200 250 300 350CAD millions

99

Income support / Income support / social servicessocial services

SupportSupportto industryto industry

EnvironmentEnvironment

Educationand researchHealthHealth

Transport /communication

Areas of overlapping federal and provincial expenditures Policing /Policing /protectionprotection

Debt Debt serviceservice

Defence /Defence /foreignforeign

Transfers to otherTransfers to othergovernmentsgovernments

Debt Debt serviceservice

OtherOther

Significant overlap in Canada:in both expenditures …

Significant overlap in Canada:

Significant overlap in Canada:… and in access to revenuesSignificant overlap in Canada:

Provincial-local

Federal

0 50 100 150 200 250 300 350CAD millions

Property taxesProperty taxes

FederalFederaltransferstransfers

OtherOther

Investment Investment incomeincome

User feesUser fees

Payroll taxes

CorporateCorporatetaxestaxes

Sales and consumption

taxes

PersonalPersonalincome taxincome tax

1010

Jointly occupied tax fields

Cooperation Cooperation and / orand / or competition competition 11

Cooperation: from spontaneous to structured2

“Natural sorting” of roles and responsibilities, reflecting: “first mover” / “follow the leader” public aversion to “wasteful” overlap and duplication

Regular exchanges of information and informal-to-formal meetings of first ministers, ministers and officials (hundreds annually)

Semi-codified “rules of the game” (e.g. the 1999 “Social Union Framework Agreement” or SUFA)

Hundreds of actual agreements on specific policy issues A few examples of highly formalized joint decision-making

(e.g. the Canada Pension Plan)

The many faces of cooperation

1212

Intergovernmental cooperation in Canada ranges from:

Main forms of cooperationMain forms of cooperationNature of policy Nature of policy jurisdictionjurisdiction Example(s)

Informal information sharing, Informal information sharing, consultations and coordinationconsultations and coordination

Parallel jurisdiction Parallel jurisdiction (with “spillovers”)(with “spillovers”)

Employment insurance / social assistance;

many regulatory matters

Informal information sharing, Informal information sharing, consultations and coordinationconsultations and coordination

““Coordinate” Coordinate” jurisdictionjurisdiction

Criminal law / administration of justice

Joint decision-making (CPP) and Joint decision-making (CPP) and informal coordination (QPP)informal coordination (QPP)

Concurrent Concurrent jurisdictionjurisdiction

Public contributory pension plans (i.e. CPP/QPP)

1313

The form of cooperation varies by policy area… Constitutionally “fixed” jurisdictions

Main forms of cooperationMain forms of cooperationNature of policy Nature of policy jurisdictionjurisdiction Example(s)

Harmonized tax collection agreements Harmonized tax collection agreements (TCAs);(TCAs);

“first mover” / “follow the leader”“first mover” / “follow the leader”Taxing powerTaxing power Management of jointly

occupied tax fields

Specific-purpose transfersSpecific-purpose transfers(with few conditions);(with few conditions);

non-binding commitments;non-binding commitments;“first mover” / “follow the leader”“first mover” / “follow the leader”

Spending powerSpending power

Most major programs(e.g. health, education);

income support through tax expenditures; support to industry and to the arts

1414

The form of cooperation varies by policy area…Constitutionally “fluid” jurisdictions

… in accordance with comparative advantageGovernment-funded

policy “pillars”(usually highly subsidized)

Income Income supportsupport

e.g.: pensions,e.g.: pensions,socialsocial

assistanceassistance

NoNo clear clear comparative comparative advantageadvantage

Services & Services & “in-kind” “in-kind” benefitsbenefits

e.g.: education, e.g.: education, health care,health care,

social servicessocial services

Clear Clear provincialprovincial advantageadvantage

“Assisted self-help”policy pillars

(unsubsidized or partly subsidized)

Tax-Tax-assisted assisted savingssavings

e.g.: private e.g.: private retirement retirement

savings planssavings plans

StrongStrongfederalfederal

advantageadvantage

Contributions-Contributions-funded funded

insuranceinsurance

e.g.: CPP, e.g.: CPP, employment employment insuranceinsurance

MostlyMostlyfederalfederal

advantageadvantage

Direct or Direct or assisted assisted lendinglending

e.g.:e.g.:studentstudentloansloans

Modest Modest federalfederal

advantageadvantage

1515

… and (in some cases) according to certain rulesExample: Social Union Framework Agreement (SUFA)

In 1999, federal government and nine provinces committed to: “social union principles”: equality, accessibility, citizen participation,

partnerships with stakeholders, sustainable funding removing barriers to inter-provincial labour mobility transparency and public accountability to citizens (not to each other)

through measuring and reporting on social program results “working in partnership” (including joint planning and collaboration,

reciprocal notice and consultation) guidelines on use of federal spending power (when new federal transfers

created or new direct federal spending in areas affecting provinces) dispute avoidance and resolution

1616

Accountability: a double-edged sword?3

22 Cooperation: from spontaneous to structuredCooperation: from spontaneous to structured

Cooperation Cooperation and / orand / or competition competition 11

1818

Does anyone here like being held accountable?

Probably not (in most cases) …

… though most of us instinctively grasp its broad benefits: maximizing public benefits of government actions (and minimizing

private “capture” of public funds or the benefits they generate) responsiveness to evolving needs/demands of citizens pressure to constantly improve programs/policies through

experimentation and emulation of “best practices” ability to identify/redress errors sooner, rather than later

1919

Need to be aware ofwhat makes for effective accountability

“Critical political mass”: engaged electorates, journalists, “public” academics and a vigorous

civil society engrained habits of public inquiry and discourse

Transparency: public access to information that is relevant, timely and comparable

across jurisdictions open fora to enable stakeholders to defend their interests (relative) policy simplicity

Free entry by alternative providers of public services

Need to be aware of when accountability can be dysfunctional

Need to be aware of

2020

“Self-appointed guardians of virtue”: de facto accountability to more powerful government (usually the

central government), rather than to local citizenry especially problematic when “senior” government doesn’t

understand the policy area

Absence of “critical political mass”: inadequate local “checks and balances”

Unrealistic or unattainable targets: may foster widespread sense of ongoing policy failure

Key messages4Accountability: a double-edged sword?Accountability: a double-edged sword?33

22 Cooperation: from spontaneous to structuredCooperation: from spontaneous to structured

Cooperation Cooperation and / orand / or competition competition 11

2222

Key messages Cooperation across orders of government is not inconsistent with

the reality of intergovernmental competition …… and can even be a sign of a healthy competitive dynamic between

(in Canada) highly autonomous public policy entrepreneurs Cooperation does not imply “joint decision-making” and can take

many forms Governments should focus on what they do best (“comparative

advantage”) – though this can/does evolve over time Need realistic accountability based on clear roles/responsibilities,

transparent policy-making and timely, relevant information