Most federations, which resulted through democratic means and practices, have a common feature—desire for national unity on the one hand and regional autonomy on the other. However, the historical experiences of a country in dealing with matters of distribution (of both wealth and power), of demands for autonomy and a common desire for co-existence will affect the structure of a federal system.

Federal states are characterized by multi-level politics. National governments do not give up their right to determine the direction of national level politics, but when they govern, they take regional interests into account. A pre-condition for a functioning federalism is the respect of the center for a degree of regional autonomy.

However, the central government must retain the powers it needs to effectively and efficiently deal with issues that are of importance to the nation as a whole. The right to regional autonomy and the need for efficient and effective governance imply that rules must be developed to organize productive and stable co-operation of both the national and regional levels of government.

The Governance of Diversity in “Holding Together” Federations

There are both opportunities and risks involved in creating a holding-together form of federalism. When designing a federal system, countries need to consider these opportunities and risks carefully in order to create an institutional system that maximizes the opportunities and minimized the risks.

In diverse countries where ethnic autonomy movements are strong, unitary states may fail to satisfy a community’s need to protect its identity, its desire for autonomy and the recognition it seeks for its culture. Federalism can give cultural minorities the means to develop their language and culture, protect their religion and have more control over natural resources. This can reduce the possibility of ethnic conflict and pre-empt units from seceding from the union.

On the other hand, opponents of federalism say that by reducing the dependence of sub-national units on the central government, this makes it more likely that those sub-units might want to secede. Also, federalism requires central governments to spend a great deal of time and energy in negotiating with various regional and ethnic authorities. Critics argue that this can reduce the effectiveness and efficiency of the national government. Federalism can also reduce the ability of the central government to promote equitable economic development across the country (through fiscal management for example).

Minorities Communities Within Minority States

An important part of holding-together federal systems is the protection of minority interests by granting them more political autonomy. One way to deal with the concerns of the minority groups is to grant these groups a limited autonomy in areas where they might constitute a significant proportion of the population.

However, in cases where there are other groups living in those areas, the adoption of a federation turns previously dominant groups into minorities in some federal units. In order to prevent endless ethnic conflicts at local levels and to protect these ‘new’ minorities, different countries have developed various mechanisms to protect regional minorities (inside regions that are dominated by national minorities). The most common protection is a strong bill of individual and citizen rights. This limits the ability of regional governments to abuse the rights of minority communities living in their region by making thee rights enforceable by the federal judiciary.

Another approach relates to decentralizing power within regions to ensure that where a regional minority is concentrated in a cluster of villages or in small towns, that should be given a degree local autonomy. This might include a requirement for regional governments to include representatives from minority communities. In 2000, these solutions were proposed in Sri Lanka to protect Sinhala and Muslims in the north-east and Tamils in the south. In Switzerland, there are three levels of government (national, cantonal, and communal), which are constitutionally protected. Many federations, such as Bosnia-Herzegovina, and recently, India, have moved to three tiers, in which local councils and municipalities are constitutionally protected.

Strategies for Dealing with Diversity in Federal Systems

To address these opportunities and risks, federal countries have developed various institutional approaches to preserve unity and manage diversity.

There are two main strategies: one emphasizes the autonomy of minorities (‘building out’ strategies), the other one emphasizes inclusion and responsiveness to diversity (‘building in’ strategies).

1. ‘Building out’ advocates the representation of groups and minorities as such, with full institutional recognition of differences. These strategies are prominent in the federal systems of Ethiopia, Nigeria, and Switzerland.

2. ‘Building in’ strategies promote citizens’ equality before the law and generally opposes the institutional recognition of group identities, although accepting and respecting cultural or other diversity in private realms. These strategies are prominent in the federal systems of the US, Germany, and Spain.

A more balanced approach to these two strategies can be seen in the federal systems of India, Canada, and Australia. However, elements of both strategies can be seen in all federal countries. 

Building National Parties The most common means of influencing party system development in conflict-prone societies is to introduce regulations that govern their formation, registration, and behavior. Such regulations may require parties to demonstrate a cross-regional or nationwide composition as a precondition for competing in elections. Some transitional states have introduced such measures in recent years. • In Turkey, for example, parties must establish regional branches, hold regular conventions and field candidates in at least half of all provinces to be eligible to contest national elections. • In Russia, one of President Putin’s first reforms required political parties to register regional branches in a majority of Russia’s 89 regions. • Nigeria continues to require parties to display a ‘‘federal character’’ by including members from two-thirds of all states on their executive council and ensuring that the name, motto or emblem of the party not have ethnic or regional connotations. • In Indonesia, the world’s most populous emerging democracy, parties must establish an organizational network in two-thirds of all provinces across the archipelago, and in two-thirds of the municipalities within those provinces, before they can compete in elections. Source: Political Parties in Conflict-Prone Societies: Encouraging Inclusive Politics and Democratic Development

Case Study: Language Policy in “Holding together” Federations An important justification for federalism is that it ensures the protection of minority cultures. For example, a national minority (that is dominant in a sub-national region) would be given the power to promote its culture, better than it would in a unitary state. One of the great advantages of federalism in linguistically diverse countries is that it allows different languages to predominate in different areas. Many countries provide publicly funded schools and some access to government services in minority languages. Some also provide broadcasting facilities and support cultural and community institutions for minority cultural groups. Minority rights could include education in whole, or in part, in the minority language; access to some government forms in the minority languages (such as tax or census forms;) and the right to interpretation in court proceedings. In many countries that provide for minority rights, these rights are legally and/or constitutionally guaranteed. An advantage of decentralizing language policy is that it allows regional minorities (e.g., Kayin who live in Bago region) to use their national language as well as national minorities. This can address the danger that regional minorities are marginalized within states or regions that are dominated by a group who speaks a different language (e.g., Myanmar speakers in Bago region). Often, some language rights at both the central and sub-unit levels are protected in the federal constitution (e.g., Canada, India, Switzerland, Ethiopia). In other cases, language policy is the decision of the sub-unit level of government. Some examples of how language policy is dealt with in federal countries include: • Ethiopia has two major indigenous languages, as well as 11 minor and many tribal ones: there is no official language and all enjoy equal recognition in principle. English is also used in education and government. Amarhic is the working language of the federal government and a working language of some state governments; each state chooses its language(s) of work. • India has 40 languages with more than one million speakers and 18 constitutional languages: Hindi (mother tongue of 18 per cent and spoken by over 40 per cent) is the leading indigenous language; English is important as a link language. States may choose which constitutional language is official and provide services in official or other languages. • Nigeria has three important indigenous languages that are official, but at least 450 others; English is the principal language of government and education, though local languages can be used; some rights of citizens, e.g., in the courts, are based on a language that is understood, not preferred. Source: Federalism in Asia and beyond: The Wildbad Kreuth Federalism Days 2012