Intra-governmental disputes are often more common in federal compared to unitary systems. This is a result of both the reasons for creating federal systems (to accommodate diversity) and the form that federal systems take (at least two levels of government). These disputes might be different governments or between individuals and corporations about matters like the allocation of resources and exercise of powers.

Many of these disputes concern interpretations of the law. They might relate to questions about who has what powers, or whether a law or act exceeds the authority of the government, or about conflicts of laws (which system or rule of law applies in particular situation). The responsibility to resolve these disputes ultimately lies with the courts. This means that all governments and nongovernment groups require good legal expertise and advice.

However, there are also frequent disputes about policy. Because of the more blurred lines of responsibility, policy disputes are often more frequently in cooperative federations than in decentralized federations. These disputes can be settled through negotiations, either between governments or between (or even within) political parties. Therefore, systems which emphasize co-operation also need several committees and commissions for settling claims to rivers and so on, the equalization of development, the allocation of money, co-ordination of planning, etc. An important requirement for a functioning federal system is that actors must be prepared to accept that decision-making might become complex and more time consuming.

Constitutional Dispute Resolution Mechanisms

One important factor that distinguishes federalism from other forms of decentralization is its protection in the constitution. Federal constitutions make sure that the center cannot take away the powers of the sub-national units. Federal systems also require that legal disputes between the federal entities are finally resolved through electoral or judicial means.

At least two federations do not give all aspects of final arbitration on the constitution to their high court. In the case of Switzerland, citizens decide on the validity of contested federal (not cantonal) laws by referendum. Any amendments to increase the powers of the federal authorities have to be submitted to a referendum, and in this way the people directly control the balance within the Swiss federation. In Ethiopia, the House of the Federation, elected by the state legislatures, has final authority, subject to legal advice from judges.

In most federal constitutions the ultimate decision in any issue of the powers of the various governments would be a matter for the Supreme Court or Constitutional Court (not all countries have a specifically constitutional court). For example, Supreme Courts serving as final decision maker in the USA, Canada, Australia, India, Malaysia and Austria if there is a conflict between different levels of government.

The neutrality of the judges in a constitutional court can promote internal peace. However, judges are not free from their own views or preferences on the kind of federalism they prefer. For the United States it has been shown that federalism rulings may either strengthen state rights or the federal government depending on the contemporary majorities in the Supreme Court. (Sturm 2013: 60) Building the capacity and independence of the judiciary is very important in new federal states. Resolving such disputes can put a high court in the sometimes difficult position of rejecting an action or law that a powerful government considers important. Without a strong, competent and independent judiciary, the autonomy of the subnational units may be encroached on without any redress. The structure and jurisdiction of the courts is therefore an important to making sure that intergovernmental relations are based on the rule of law.

Power Sharing Arrangements/Consociationalism

Consociationalism describes arrangements where political structures make provisions to include members of various ethnic, religious or language groups in the central government, political party system, civil service, etc. For example, in Belgium the federal cabinet must be composed equally of Dutch-and French speakers (the prime minister is not included and could be either). Parliament normally deals with issues through majority votes, but a proposed measure that is considered to be of vital interest to one of the cultural communities will require a double majority of deputies from both communities, with each deputy voting as an individual.

In many federations, there is a form of either formal or informal representation of all groups or territories in the federal cabinet. For example:

• In Ethiopia, the federal executive consists of the ceremonial president and a powerful Prime Minister along with his or her cabinet. The composition of the cabinet seeks to reflect the country’s diversity as a result of constitutional principle and practice.

• In Nigeria, under the federal character principle enshrined in the Constitution, a candidate for president or governor is expected to exercise his or her powers of appointment with due regard to the federal character of Nigeria, or the diversity of people within the state and the need to promote national unity. The president is specifically required to ‘appoint at least one minister from each state, who shall be an indigene of such state.’

• In Switzerland, the composition of the Federal Council has mirrored the representation of the four major political parties in the federal parliament none of which holds a majority.

• In Spain specific portfolios are often reserved to ministers from certain autonomous communities.

The Issue of Secession

There is no standard constitutional approach to dealing with the possibility of secession. Many federations have constitutional provisions that assert the eternal unity of the country or exclude the possibility of secession. The United States, Mexico, Brazil, Nigeria, India, and Spain are such examples. In other cases, such as Australia, Germany and Switzerland, the constitution is silent on the issue.

Ethiopia’s new constitution is unusual in providing a formal right to secession, though this remains controversial and untested International law sees the right of secession as legitimate only in cases of severe abuse of the human rights of a population and as a result of decolonization. The international community is normally against secession because it can destabilize international relations.