What Is A Unitary State? Pros, Cons, Examples

Some unitary countries have a high level of subnational spending as well, such as Denmark, Finland and Sweden. By contrast, in countries where local governments have limited competencies, the level of spending is also limited (e.g. Greece, Ireland, Luxembourg, New Zealand and Turkey). It is important to underline that there are no clear-cut frontiers between the different sources of revenue.

In 2016, taxes represent the main source of revenues for subnational governments in the OECD (45%) before grants and subsidies (37%). Revenue derived from local public service charges , property income and social contributions represented 15%, 2% and 1% of subnational government revenue respectively. In federal countries, subnational expenditures are, in most cases, higher than in unitary countries because they combine those of the state and local governments.

Subnational governments are a legal entity directly elected by universal suffrage and having their own budget, staff and decision power. Both devolution and delegation of tasks fulfil this definition, but to different degrees. Local government status, organisation, responsibilities and financing are defined by state constitutions and laws, and often differ from one state to another. Governed by state legislation, local governments do not have independent relations with the federal government. Local government reforms are decided by the federated states and not the federal power, which has no say on those matters (e.g. Australia, Canada and the United States).

Finally, equalisation instruments may also limit the fiscal autonomy of subnational governments, especially horizontal equalisation (from wealthy jurisdictions to the poorer ones, also called the “Robin Hood principle”). Another victim of Nigeria’s problematic federal system is the security sector, especially in the area of policing, where the federal government has exclusive powers. The constitution continued the practice of operating a highly centralized police structure—a relic of British colonialism. The inflexibility inherent in the policing system has led to an ineffective force, dogged by issues of poor funding, a history of human rights violations, and unqualified allegiance to the central government—all to the detriment of the people.

In many countries with federal systems of government, the central government retains some exclusive powers as is necessary to enable uniformity in governance. For example, in the United States, the federal government retains the powers of the treasury, the military, and immigration. In the Nigerian case, the exclusive powers retained by the central government go beyond ensuring uniformity.