Since the mid-seventies, several states in Latin America, Southern Europe, and Central and Eastern Europe have gone through a profound process of democratisation. On each occasion, policy-makers and policy scientists were asked to think about the most appropriate constitutional and institutional architecture. Among the issues that were discussed was the question of whether a parliamentary, presidential, or semi-presidential system should be created or whether the legislature should be elected by Proportional Representation or by a majoritarian electoral formula.

In democratising societies with a multinational character (to name some examples such as Spain, Russia, and South Africa), a question was put on whether powers should be decentralised, as a means of enhancing the coexistence of various nationalities within their state borders. Such a process of decentralisation could lead to the formation of a federal state. Robert A. Dahl, an American political scientist, in his book titled Democracy, Liberty and Equality opines that a federation is a political system in which “some matters are exclusively within the competence of certain local units/provinces or regions and are constitutionally beyond the scope of authority of national government, and where other matters are constitutionally outside the scope of the authority of the smaller units.” 

States that institutionalised democratic federalism gave further thought to which powers should be entrusted to the regional levels of government and which powers should be best-taken care of at the federal level. Policymakers could not rely on an existing blueprint prescribing the most appropriate way of dividing competencies in a federal state. In contemporary federations, the responsibilities of the federal and regional policy levels cannot always be disentangled. One such example relates to fiscal federalism; in most contemporary federations the tax capacity of the federal government surpasses that of the regions. Yet welfare services are frequently provided by the regional or provincial governments. That financing of these expenditures requires that the federal government actively support the regions, at least if one of its objectives is to offer comparable standards of welfare provision across the federation. 

SCO And Realising The Dream Of Pakistan As A Regional Connectivity Hub

The fiscal dependence of the regions on the center ideally requires that the politico-economic concerns of the regions are accommodated when the center debates the allocation of federal grants to the regions and introduces legislation to such effect in the federal parliament

Political scientists have studied the nature of the dependence of the provinces on the center. They have also suggested some institutional designs and mechanisms for not only regulating........

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