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Capital Cities

Finance and Governance of Capital Cities in Federal Systems

The Forum invited experts from 11 federations to contribute papers based on a common template which asked them to analyze (i) the local governing structure, (ii) their roles, responsibilities, and revenues, and (iii) their fiscal relationship with the federal government, as well as reflect on differences in national cultures, historical development, constitutions, political structures, and ideologies. An important issue which these papers were the extent to which the federal government compensates capital cities for their unique role. This theme draws on capital cities in the following countries as case studies: Australia, Belgium, Canada, Ethiopia, Germany, India, Mexico, Nigeria, South Africa, Switzerland, and the United States. Additionally, the findings of this project have been in demand in Sudan, Somalia, Nepal and Pakistan.

Capital cities are unique because they are the seat of the national government and they host national institutions such as legislative buildings, national museums and arts centres, and other institutions for which the federal government is responsible. Capital cities take on political, administrative, and cultural/symbolic roles that are different than other cities in the country. At the same time, they are cities where people live, use local services, and engage in local political activity. Although many of the political, cultural, and symbolic functions of capital cities in federal countries are similar, there is considerable variation in many of the other characteristics of these cities. In terms of finance and governance, national capitals differ with respect to (i) the local governing structure, (ii) their roles, responsibilities, and revenues, and (iii) their fiscal relationship with the federal government. These distinguishing features reflect differences in national cultures, historical development, constitutions, political structures, and ideologies.

The purpose of this theme is to examine federal policy towards its capital city in ten federal countries with a particular emphasis on the funding arrangements and governance of capital cities. Each chapter will examine the role of the federal government in the finance and governance of the capital city and the extent to which the federal government compensates capital cities for their unique role. This theme draws on capital cities in the following countries as case studies: Australia, Canada, Ethiopia, Germany, India, Mexico, Nigeria, South Africa, Switzerland, and the United States.

Theme Coordinator: Enid Slack, Munk Centre for International Studies, University of Toronto