Thursday, September 11, 2014

More on Scotland and Catalonia

In the last few days, as the Scottish referendum approaches, we have seen some intellectual heavy weights either openly arguing against the independence project of Alex Salmond, or proposing something much better: a federal Britain. Paul Krugman has asked the Scots to "be afraid, very afraid" and to think twice before swallowing the idea that currency union without political union is possible. Will Hutton, one of the most important intellectuals of the British left, has explicitly advocated for a "federal Britain," something that I openly support. Meanwhile, the best predictors (prediction markets, where investors put at stake their own money, so that their average bets amount to a measure of the "wisdom of the crowds") of the referendum's result say that the NO vote is still much more likely to win. But, of course, these are only predictions.
Meanwhile, as I argue today in an on-line debate in Europp, Catalonia should find a better way than a secession referendum to decide about its future constitutional status, in a world of overlapping and shared sovereignties where the nation-state is becoming obsolete. If and only if, over an extended period of time, a very large and stable majority shows an unambiguous support for a detailed “independent” constitutional project within a clear international framework, then some democratic procedure accepted by all relevant actors should be established to peacefully negotiate and finally take a final decision about it. These conditions clearly do not apply today.
Most internationally recognised legal scholars and political scientists believe that the right to secede should be restricted to extreme cases. Accordingly, secession referendums are the exception in developed democratic countries, especially in the context of the European Union and the Eurozone, which are in a complex process of increasing political integration and redistribution of sovereignty.
There are three commitment problems, well-known to social scientists, associated to the unrestricted use of a referendum of independence in federal systems:
1) Federal governments should not be too powerful, and focus on the creation of the legal and regulatory frameworks for markets to operate efficiently (including a strong currency and clear borders), and commit both not to expropriate prívate investments and not to interfere with federal units, according to the theory of market preserving federalism due to Weingast and his co-authors.
2) Potential majorities or elites in federal units should commit not to cheat opportunistically on the specific investments made by large minorities assuming the permanence of some federal institutions: educational degrees, retirement benefits for federal civil servants, language skills, factor mobility, currency…
3) The governments of federal units should commit not to use their resources to promote the partition of the federal state. Otherwise potentially federal states will be reluctant in the future to decentralise in contexts where it would be desirable to do so. When federal units are relatively rich, there should be a mutual commitment for the units to fairly, boundedly and transparently contribute to the common resources and for the federation to preserve self-government and the participation of the federal units in shared decision-making.
Unless these commitments are respected, societies may fail to build the stable federal systems that are necessary in our increasingly integrated economies. To preserve commitments, democratic societies build institutions that constrain the unrestricted use of majority rule. That is why we have constitutions, international treaties and courts of justice. To the extent that, as I believe, it is desirable that both Spain and the EU become better federations, the use of a unilateral independence referendum as a decision mechanism would jeopardise this objective. It would also trigger internal and external cascade effects that would make it impossible to focus the energies on a more integrated and democratic Europe.
Spanish and Catalan leaders should instead build on our common values to submit to the final decision of the electorate an agreement on a shared institutional architecture that can be legal and stable in the European context, and give satisfaction to historical grievances.

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