The “Regional State” in Chile’s proposed new Constitution: advantages and challenges for decentralization and equal territorial development

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Chile’s draft Constitution establishes a “Regional State” model with territorial entities that have political, administrative, and financial autonomy. While this offers many advantages in terms of delivering public services and bringing government closer to the people, a gradual and responsible transition from the current constitutional order must be considered. Key for a successful decentralisation process will be robust multilevel government coordination – writes Esteban Szmulewicz Ramírez

On 4 September 2022, Chile will hold a referendum on a new Constitution, drafted by a directly elected Constitutional Convention. Among many interesting innovations, the proposed new Constitution establishes a so-called “Regional State” composed of autonomous regions, autonomous communes, indigenous territorial autonomies and special territories.[1] Many observers have pointed out that this territorial and institutional reorganization would transform Chile from one of the most centralized States in the OECD into a deeply decentralised one. These territorial entities would all have legal personality and competences to govern themselves, with political, administrative, and financial autonomy, as part of the single and indivisible territory of Chile.

This proposal originated in the Constitutional Convention’s Thematic Committee on “form of the State, planning, autonomy, decentralization, equity, territorial justice, local governments and fiscal organization”. The main expectation, as the long and intertwined title of the Committee implies, that decentralization would bring about more equal territorial development, democratization from the bottom up, and better connected public services, also echoed previous official reports, namely the 2014 Presidential Commission report and the 2013 Annual Report on Human Rights by the National Institute of Human Rights.

The Regional State model

First, in terms of political autonomy, the autonomous regions will have Regional Governments (RG) with directly elected Governors and Regional Assemblies. These regions would draft their own administrative framework statutes, which must then be approved by the Chamber of the Regions (which would replace the Senate) and the Congress of Deputies as “laws of regional agreement” (explained below). RGs will have broad regulatory (but not legislative) powers. Although in the future it is possible for both Congress and the Chamber of the Regions to delegate legislative power to the regions, this is subject to a petition by regions and later approval by both branches of the legislature. These bodies can approve or reject the petition, without specified reasons nor constitutional prerequisites for regions seeking this power.

Second, in terms of administrative autonomy, public service provision will in principle be transferred from the centre to the regions and municipalities. Municipalities are recognized as local governments with a series of essential competences in public policy, and not merely administrative bodies as in the current 1980 Constitution. Additionally, due to the territorial subsidiarity principle, competences should be allocated to the lowest government level possible, although this must be reconciled with the general and comprehensive competence of the central State over public services and its duty to secure equal standards in the provision of public goods and fundamental rights regardless of where in Chile a person lives. The increased competences might benefit citizens’ daily lives, since in many cases they connect with crucial issues of territorial and social development, such as local governments’ competence over protecting local ecosystems and cultural heritage, as well as regional governments’ competence over innovation and competitiveness in the region, among many others.

In financial matters, the proposal mandates subnational governments to progressively execute a significant part of the public budget.

Third, in financial matters, the proposal mandates subnational governments to progressively execute a significant part of the public budget. Limited regional debt is allowed subject to the fulfilment of a series of substantial conditions. The issue of indebtedness must be considered with great caution, because it can lend itself to abuse, especially given the experiences in some Latin American countries. Additionally, in terms of revenue, territorial entities may only levy taxes and duties in accordance with the law. An important new competence for subnational governments will be to create regional or municipal public enterprises, after authorisation by a “law of regional agreement”.

Equal territorial development

The proposed Constitution also entrenches principles of territorial equality, such as solidarity and inter-territorial compensation, macroeconomic and fiscal stability, and fiscal coordination. For instance, the State “shall make unconditional direct transfers to territorial entities that have fiscal revenues of less than half of the weighted average of these” and the “regions and communes that have revenues above the weighted average of fiscal revenues shall transfer resources to those with revenues below the average”. This mechanism of redistribution is a positive development that should foster equal territorial development, provided that subnational governments target their budgets to finance social services and improve social wellbeing indicators.

Even though the Regional State model opens the door to further decentralisation, major differences compared to Spain’s autonomous communities or Italy’s regions can still be observed. Although the centralist tradition in Chile has been important in securing the presence of the State throughout the territory, the limits of this model for Chile from the point of view of the democratic participation of citizens and of territorial development have been made clear in recent decades.

In terms of advantages, the new territorial organization of the State will allow regions to elaborate, implement and finance an important set of public policies and to have elected authorities directly accountable to the citizens, bringing government closer to the people. Additionally, the proposed constitutional provisions incorporate principles on decentralisation that will guide both the interpretation of the Constitution and legal and public policy implementation.

Asymmetrical bicameralism

Still, decentralisation is a process that starts with the Constitution but does not end there. Therefore, numerous laws will be needed to enact and consolidate the process. This is why the Chamber of the Regions, which replaces the existing Senate and will give rise to “asymmetric bicameralism”, will contribute to the exercise of “shared power” of the territories in national decisions that impact the development of decentralization.

Regional representatives in the Chamber of Regions will be directly elected by the citizens. The final number of representatives per region would be determined by law, ensuring that each region has at least three representatives and an equal number of representatives per region. This Chamber’s main competence relates to the “laws of regional agreement”, which are pieces of legislation that must be approved by both branches of the legislature, as opposed to other regular bills that only pass through the Congress of Deputies, and not through the Chamber of Regions. Laws of regional agreement include all constitutional reforms, laws regulating the organization, attributions and operation of the main public institutions; the constitutional states of exception; creating, modifying or eliminating taxes; laws implementing the rights to health, education and housing; the yearly budget law; the political-administrative division of the country; laws that regulate territorial and urban planning; those that regulate the protection of the environment; laws regulating popular voting and scrutiny, and also political organizations. In addition, the Chamber, in conjunction with the Congress of Deputies, has the power to approve international treaties and to participate in the appointment of high authorities, such as the Council of Justice, the Constitutional Court, the Comptroller General of the Republic, the National Prosecutor, and the National Defender.

The profound restructuring means that the Chamber of the Regions loses some powers vis-à-vis the Senate, which currently represents a typical case of symmetrical bicameralism in terms of the legislative process.

The profound restructuring means that the Chamber of the Regions loses some powers vis-à-vis the Senate, which currently represents a typical case of symmetrical bicameralism in terms of the legislative process. The Chamber of the Regions would further lose the Senate’s specific and significant role in directly appointing members of the Constitutional Court, and confirming some presidential appointments to other judicial and public bodies. Notwithstanding the fundamental change that the elimination of the Senate represents, still “there is no insignificant bicameralism”. In other words, all second chambers exercise some kind of influence and power, even if it is an asymmetrical bicameralism. Further, it must be remarked that some of the initial proposals by the Thematic Committees dealing with this matter pointed to a much more asymmetrical system, and even unicameralism was on the table for a brief moment. Civil society and academic concerns over this, as well as the internal movements in the Constitutional Convention, led to the final proposed structure analyzed in this article.

The Chamber of the Regions will represent some degree of separation of powers internal to the structure of the legislature and it will counterbalance to some extent the executive power. The fact that bills sponsored by the President need to be approved by both chambers, in case of laws of regional agreement, as well as the fact that the Chamber of the Regions acts as jury for impeachments initiated in the Congress of Deputies, including that of a sitting President, are examples of some of the mechanisms by which the Chamber of Regions could place a check on the powers of the executive.

In addition, the Constitutional Court will resolve conflicts of competence in matters of regional agreement laws and also in other matters between the Congress of Deputies and the Chamber of Regions, or between these institutions and the President of the Republic. Therefore, the Constitutional Court will play an important role in enforcing an adequate balance of powers.

Challenges ahead

The challenges lie in multilevel coordination, especially considering the fragmentation of political parties, the development of indigenous territorial autonomies, and the effects of fiscal decentralisation, particularly as it may relate to territorial equality. To this end, a gradual and responsible transition from the current constitutional order must be considered. Key for a successful decentralisation process will be robust multilevel government coordination. Although the proposal creates new institutions for this purpose, particularly the so-called Council of Governorates, composed of all the Regional Governors together with the President of the Republic at the national level, and the Council of Mayors at the level of each region, the process will be complex, especially with respect to the relationship with indigenous autonomies. Even though the roadmap to full implementation of the Regional State remains unclear, the transitional provisions point to a period between two to four years in order to introduce the necessary legislation and elections to the new offices, although some observers have highlighted that this might take even longer.

A centrifugal model might encourage separate and independent institutions that result in segmented and localized decision-making processes. Instead, the multilevel government designed by the proposed Constitution is one that combines “autonomy” with inter-territorial and inter-institutional coordination and cooperation. The experience of the Covid-19 pandemic in countries like Spain and Italy, as well as the South African case, demonstrates the importance of these multilevel coordination and cooperation institutions, although the Chilean case points more toward coordination than to cooperation since the centre will still lead intergovernmental relations, including financial relations.

Conclusion

In conclusion, Chile’s proposed new Constitution represents a significant advance in regional authority in Chile, considering its history, and its political, legal and administrative culture. It will be crucial that the laws for the development of the Regional State allow the transition from a complex network of institutions at the territorial level, and their relationship with the central level, to a coherent and articulated system of “collaborative or cooperative territorial development”. To this end, a gradual and responsible transition must be considered, as well as the respect for the rule of law and the system of competences, in order to create an authentic model of “multilevel constitutionalism”.

[1] The analysis of indigenous territories cannot be separated from other constitutional clauses recognizing indigenous rights, such as reserved seats in representative institutions, the rights to land and natural resources, among others. Considering this, and their special characteristics, both indigenous territorial autonomous and special territories would require a separate and detailed analysis beyond the scope of this article.

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Esteban Szmulewicz Ramírez is a PhD Candidate at Leiden University Law School in the Netherlands. He is also Professor of Constitutional and Administrative Law at Universidad Católica del Norte, Chile. Email: esteban.szmulewicz@ucn.cl.   

The author is deeply appreciative of the wonderful comments by Sharon Pia Hickey and Kimana Zulueta-Fülscher, from IDEA International, on a draft version of this work. I am particularly in debt to Sharon, whose support throughout the process has been paramount. Also, I am thankful to Ricardo Mena for his motivation to embark on this project. Any mistakes are the responsibility of the author.

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Suggested citation: Esteban Szmulewicz Ramírez, ‘The “Regional State” in Chile’s proposed new Constitution: advantages and challenges for decentralization and equal territorial development’, ConstitutionNet, International IDEA, 23 August 2022, https://constitutionnet.org/news/regional-state-chiles-proposed-new-constitution-advantages-and-challenges-decentralization-and

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