2021_Federalism and urban primacy by audrc

International Journal of Urban Sciences

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Federalism and urban primacy: political dimensions that influence the city–country divide in Australia

George

Wilkinson, Fiona Haslam McKenzie & Julian Bolleter

To cite this article: George Wilkinson, Fiona Haslam McKenzie & Julian Bolleter (2021): Federalism and urban primacy: political dimensions that influence the city–country divide in Australia, International Journal of Urban Sciences, DOI: 10.1080/12265934.2021.1997631

To link to this article: https://doi.org/10.1080/12265934.2021.1997631

Published online: 09 Nov 2021.

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INTERNATIONALJOURNALOFURBANSCIENCES

https://doi.org/10.1080/12265934.2021.1997631

Federalismandurbanprimacy:politicaldimensionsthat inﬂuencethecity–countrydivideinAustralia

GeorgeWilkinson a,FionaHaslamMcKenzie b andJulianBolleter a

aTheAustralianUrbanDesignResearchCentre,Perth,Australia; bCentreforRegionalDevelopment, UniversityofWesternAustralia,Crawley,Australia

ABSTRACT

WithAustralia’spopulationsettotripleinthetwenty-firstcentury, itsfederalgovernmentisinvestingindecentralization.Thisis becauseAustralianstatesexhibithighurbanprimacy,whereone cityisdominantlylarge.Institutionalperspectivesofprimacy suggestpoliticalfactorsareusuallysignificantdrivers.For example,stronglocalismanddecentralizedsettlementpatterns areusuallyconcomitantwhilstthesamecanbesaidof centralizedgovernanceandprimacy.Itisunclearhowinstitutions mightinfluenceprimacyinAustralia’slargestates.Tobetter understand,wecontextualizeAustralianfederalismwithinthe primacydebate.Usingeighteenmeasuresofintergovernmental power,wedeterminedthattheAustralianfederationiscomprised ofcomparablystrongfederalandstatetiers,underlaidbyweak localandregionalgovernment.Theresultssuggestprimacyin Australianstatesisreinforcedbyinstitutions,contrastingthe universalityofenvironmentaldeterminismandsuggestingan opportunitytodecentralizeAustralia’sgrowingpopulation throughthedevolutionofdecisionmakingpowers.

Highlights

ARTICLEHISTORY

Received11September2020

Accepted19September 2021

KEYWORDS

Urbanprimacy; decentralization;Australia; institutions;cities

. Australia’spopulationforecasttotripleby2101,exacerbatingstateurbanprimacy

. Governmentdecentralizationeﬀortsoverlookinstitutionaleconomicsanddevolution

. ThisresearchquantiﬁesAustralia’sinter-governmentalbalanceofpower

. Stateurbanprimacyisconcomitantwithcentralizedfederalandstateinstitutions

. Weaksub-state(local,regional)powerimpairsbottom-upeconomicdevelopment

1.Introduction

Urbanscientistshaveobservedhowthedeﬁnitionandmorphologyofacitychangeswith innovation.Acceptingtheirevolutionarynature,Batty(2013)delineatedcitiesbythe gravityoftheirnetworksandinteractions.Thispurposefullyenduringandfunctional deﬁnitionisoperationalizedinurbaninformatics,wheredatascientistsexaminecities’

CONTACT GeorgeWilkinson george.wilkinsoniii@research.uwa.edu.au TheAustralianUrbanDesignResearch Centre,1002HayStreet,Perth,WesternAustralia6000,Australia

underlying ‘circulatoryandnervoussystems’ (Foth, 2009,p.xxvi).Likewiseininstitutionaleconomics,theeconomicskeletonofanurbansystemisaproductofinstitutions,theunderlying ‘rulesofthegame’ whichsculpturbansystemsandinter/intranationalgrowthdifferentials(North, 1990,p.3;Rodrik, 2000).Thislogichasguided studiestomapinstitutions(e.g.capitalcitystatus,localism,propertyregulations)to settlementpatterns(Anthony, 2014;Kim&Law, 2016).Garza(2016)examinedintraurbandeterminantsofsettlementpatternsinLatinAmerica,explicitlyconnectinginstitutionalhistorywithpoliciesandpracticesthatexacerbateprimacy.Similarly,inthis paperweexaminetheinterfacebetweeninstitutionsandprimacyinAustralianstates. Australianstateshaveexhibitedhighurbanprimacyintheircapitalssincecolonization(Weber, 1899).Primacyusuallysignifiesaneconomically,politicallyandculturally dominantcapitalcity(Short&Pinet-Peralta, 2009).Generally,verylargecitiesarecapital citiesgivencapitalsagglomerategovernmentjobs,lobbying,andbusiness,providing steadygrowth(Ades&Glaeser, 1995).Forexample,in TheWorldAccordingto GaWC,theGlobalandWorldCitiesResearchNetwork(GaWC)ranked394cities,of which318arenationaland/orsub-national1 capitals(Taylor, 2020),challengingthe notionofcapitalsas ‘special’ casesofurbanization(Turner&Turner, 2011).Ofthe75 non-capitalcitiesfeaturedinGaWC’sranking,theyareeitherformercapitals2,capitaladjacent,orholdspecialadministrativedesignationbelowthesecondtierofgovernment (e.g.countyseatsintheUnitedStates).Interestingly,35non-capitalcitiesareAmerican (e.g.LosAngeles,Chicago,Dallas),whilsttheremainderarescatteredinternationally. InstitutionalistssuggestdevolvedintergovernmentalpoweracrossfourtiersofgovernmentintheUSenablesnon-capitalcitiestothrivebycultivatinglocalism/regionalism andempoweringsub-stategovernment(Galiani&Kim, 2011;Kim&Law, 2012, 2016). StudiesofurbanhierarchyinAustralianstatesevokeenvironmentaldeterminism (Rowland, 1977)and first-moveradvantages(Brennan&Brennan, 1963;Johnston, 1969;Neutze, 1977;Robinson, 1962)toexplainthecontinueddominanceofformercolonial,nowstate,capitals.Indeed,presentdayAustraliancapitalswereamongstthefew habitableoasescitedbyeighteenthandnineteenth-centurycolonists,servingaslogical hubsinAustralia’schallengingwilderness(Statham, 1990).However,theirexclusive economicsuccessledBird(1965)andStatham(1990)toperceptivelyaskifthefounders hadremarkableforesight,choosingtheonlypocketsofthecontinentcapableofholding millionsdespitehavinglittleexperienceofAustralia.Contrarytoenvironmentaldeterminism,institutionaleconomicssuggesthighprimacyisoftenconcomitantwithand symptomaticofcentralizedgovernanceinlarge,wealthycountries(Ades&Glaeser, 1995;Atienza&Aroca, 2013;Henderson, 2003).Thislogichasnotbeenappliedor testedinanAustraliancontextandthereforetherelevanceofinstitutionaltheoriesin theemergence,persistence,andprojectedintensificationofurbanprimacyinstates (AustralianBureauofStatistics, 2013)isnotwellunderstood.

ToaddressthisgapweexaminehowpowerisdistributedinAustralia’smodeofpoliticalorganization,federalism,whereagroupofsemi-autonomousstatesareunitedbyan overarchingpolity.Governmentpowerisexaminedandmeasuredinthefederalism,local governmentandpublicadministrationliteratures(Fenna, 2019;e.g.Rondinelli, 1981; Watts, 1999).Consultingtheseworksweassembledeighteenindicatorsofatier’ s power,suchasrevenueandexpenditures,controlofinfrastructure,andtheabilityto electleadership(see Table1).Theindicatorsassumepowerisameasurablegoodthat

canbedistributedorconcentrated,mutuallyexclusiveoradditiverelativetoeachtier.We classiﬁedpowerintopolitical, ﬁscal,andadministrativedimensions.Collectivelythe measuresclassifyeachtier’srelativestrengthandconveytheoverallbalanceofpower.

We findAustralianfederalismischaracterizedbystrongfederal,strongstate,and weaksub-stategovernment.Australia’sbalanceofintergovernmentalpowerisconsistent withanabsenceoflargenon-capitalcitiesbecause,asexplainedlaterinthispaper,Australiancitiesinthemunicipalsensehavecompromisedpoliticallegitimacyandlittle powertoindependentlyspearheaddevelopment.Developmentinnon-capitalcity regionsisreliantupontop-downinitiativesforwhichthereiscompetition,oftenrenderingsupportshort-termandsporadic.Werecommendthatiffederal/stateendeavoursto decentralizepopulationgrowth(asdescribedinDrum, 2018;McCormack&McKenzie, 2019;RegionalAustraliaInstitute, 2016)areindeedresolute,theyconsiderdevolutionof powerintosub-stategovernance.ThisisparticularlysalientgivenAustralia’santicipated twenty-firstcenturypopulationgrowth,fromapproximately20millionin2001toover 70millionin2101(AustralianBureauofStatistics, 2013).Shouldpopulationgrowthconcentrateinprimatecities,thecapitalswillabsorbrisingcongestioncosts,growththat mightbemorevaluableinregionalAustralia(Archer,Houghton,&Vonthethoff, 2019;Weller&Bolleter, 2013).

Thearticleisstructuredasfollows.First,weintroduceinstitutionaleconomicswithin thecontextofurbanprimacy.Second,wediscussdecentralizationpolicyinAustralia.

Table1. Measuresofgovernmentpower.

ID Metric

P1Constitutionalrecognition

DimensionWeight Sources

Political0.022Rondinelli(1981);Watts(1999);Painter (2001);Burtonetal.(2002)

P2Geographicboundaries Political0.071Rondinelli(1981)

P3Democraticelections Political0.028Schneider(2003);Schragger(2010)

P4ExecutivedemocraticallyelectedPolitical0.017Slater(1989);Henderson(2000)

P5GovernancecanbesuspendedPolitical0.076Henderson(2000)

P6StatutoryrightsandsafeguardsPolitical0.118Slater(1989);Rondinelli(1981)

F1Tiertaxrevenueaspercentofnational taxrevenue Fiscal 0.050Watts(1999);Willisetal.(1999);Henderson (2000);Schneider(2003);Schragger(2010)

F2Federalrevenuebefore&aftercurrent transfersaspercentofallpublicsector expenditure

F3Ownsourcerevenueaspercentoftotal tierrevenue

F4Tierexpenditureaspercentofnational expenditure

Fiscal 0.047Watts(1999)

Fiscal 0.068Watts(1999),Henderson(2000),Schneider (2003)

Fiscal 0.058Slater(1989);Watts(1999);Willisetal. (1999);Henderson(2000);Schneider (2003);ArzaghiandHenderson(2005)

F5PowertoplaceconditionsovergrantsFiscal 0.076Willisetal.(1999)

F6Fiscalstatutoryauthority/rightsFiscal 0.120Slater(1989)

A1Provisionofeconomicinfrastructure: Electricity Administrative0.020Henderson(2000);Fenna(2019)

A2Provisionofeconomicinfrastructure: Potableandwastewater Administrative0.020Henderson(2000);Fenna(2019)

A3Provisionofeconomicinfrastructure: Transportation Administrative0.020Henderson(2000); Fenna(2019)

A4Provisionofeconomicinfrastructure: Communications Administrative0.020Henderson(2000);Fenna(2019)

A5ProvisionofsocialinfrastructureAdministrative0.042Henderson(2000);GalianiandKim(2011); Fenna(2019)

A6Overalladministrativeauthority/rightsAdministrative0.129Slater(1989);Watts(1999)

Third,weintroduceAustralianpoliticalinstitutions.Fourth,wedescribeaclassiﬁcation researchstrategytomeasureAustralia’sbalanceofpower.Fifth,weshareresultsand describethebalanceofpower.Finally,wediscussourresults,focusinguponweak sub-stategovernance,signsofdecentralization,federal ﬁscalomnipotence,andhow thesetopicsrelatetoprimacy.

2.Institutionaleconomicsandurbanprimacy

Inneoclassicaleconomics,marketsareconceivedasdriversoftheeconomy.Onthis pointinstitutionaleconomicstakesexception,rejectingthesingularityofmarket forcesandemphasizing ‘therulesofthegame’ (North, 1990,p.3).Theterminstitution referstoformalandinformal,largelypermanentbutevolvingconstraintsthatstructure capitalaccumulation,includingeconomic(e.g.property,contracts,patents)andpolitical (e.g.democracy)institutions(Acemoglu,Johnson,&Robinson, 2005;Glaeser,LaPorta, Lopez-de-Silanes,&Shleifer, 2004;Huggins, 2016).Relativetoneoclassicaleconomics, institutionalistsexaminethe ‘forceswhichconditionandchanneltheformationof marketsandtheexerciseofindividualchoiceandbehaviour’ (Samuels, 1995,p.572). AccordingtoSamuels,marketsdon’tallocateresources,institutionsdothroughtheir controlofallocation.

Inurbanscience,theinstitutionallenshasbeenoperationalizedtoexaminethechallengesofurbanandregionaldevelopment(e.g.Lejano&Kan, 2015;Moulaert,Jessop,& Mehmood, 2016).Likewise,thislenshasinformedanalysesofprimacydeterminants. Internationalstudies ﬁndprimacyiscommoninthecapitalsofgeographicallysmall, developingeconomieswithurbanpopulationsbelowtwomillion(Davis&Henderson, 2003;Short&Pinet-Peralta, 2009).Thesefactorsvarycasebycase,howeverinnearly all,evenlargedevelopedcountrieswithurbanpopulationsgreaterthantwomillion, institutionslikecapitalcitystatusremainrelevant(Henderson, 2003).Whetherthe capitalmakesthecity,orthecitymakesthecapital,empiricalevidencesuggests capitalcitystatusconstitutesacompetitiveadvantage(Anthony, 2014;Aroca& Atienza, 2016).

Primatecitiesareusuallycapitals,butnotallcapitalsareprimatecities.Scholarsattributethevariablepopulationmagnetismofcapitalstoinstitutions,specificallythebalance ofintergovernmentalpowerandhowthisgovernsinfrastructureprovision(Henderson, 2003;Kim&Law, 2016;Rossman, 2018).TheurbaneconomistHendersonconceivedof infrastructureasamagnetofagglomeration;ifyoubuildit,theywillcome(Henderson, 1974, 1980).ForHenderson(1982)economicgeographyreflectsthepolitical-institutionalprocessesgoverningresourceprovision.Economic,demographic,andpolitical factorscoalescetodeterminewhereinfrastructureisdistributed,howoften,withwhat capital,andultimatelywherecitiesgrow(Henderson, 2003;Henderson&Becker, 2000).ForHenderson,centralizedurbanizationisindicativeofcentralizedinstitutions. Populationgrowthmodelsaddedquantitativemettletoinstitutionalism.Inastudyof theAmericas,KimandLaw(2012;alsoseeGaliani&Kim, 2011)measuredcapitalcity populationmagnetismtobestrongestwheresub-nationalgovernmentisweak(e.g. Chile,Argentina),weakestwheresub-nationalgovernmentisstrong(e.g.Canada, USA).ComparingCanadianandAmericanpopulationgrowth,KimandLaw(2016) measuredstrongercapitalcityeffectinprovincesascomparedtostates,attributing

thistoweakerlocalgovernmentinCanada.TheydeterminedCanadianlocalgovernmentsaremorereliantupon,andhavelittlebasistooppose,interventionistprovinces whereasUSlocalgovernmentsareaﬀordedbroaderprotections,rightsandrevenue channels(Kim&Law, 2016).Thus,stronglocalgovernmentspossesstheautonomyto developregardlessofpoliticalstatusorhowtheirpotentialisperceived,whileweak localgovernmentrendersdevelopmentbeholdentoandbottleneckedinhighertiers.

Aninstitutionalperspectivemayexplainsomecomponentsofprimacybutitshould notbetakeninisolation.ThedevelopmentofgovernmentinAustraliabeganwithBritish colonialinstitutions(e.g.religion,laws,bankingsystem,etc.)(Statham, 1990).Overtime, factorendowments(e.g.naturalresources,environment)createdopportunitiesand exactedcosts,bothshapingpoliticalinstitutions(Acemoglu,Johnson,&Robinson, 2001;Dahl&Tufte, 1973).Forexample,theUnitedStateshasvastarablelandsconducive todecentralizationandlocalism.Incontrast,Canada’smoreconcentratedarableregions mayhavecreatedopportunitiesforcentralizedprovincialgovernmentstoprevail.LikewiseinAustralia,environmentalrestraints,particularlyaccesstoreliablepotablewater, concentratedpopulations.Still,theextremityanddurationofprimacyinstatecapitals warrantsinvestigationintodimensionsthathavebeenrelevantinternationally.

3.DecentralizationinAustralia

Figure1 featuresapopulationdensitymapofAustraliaillustratingtheconcentrationof populationaroundstatecapitalssuchasSydney,Melbourne,Brisbane,Perthand Adelaide(AustralianBureauofStatistics, 2016).AccordingtoEversoleandWalo (2020),colonialcentralizationeventuatedAustralia’scity–countrydivide,theideathat non-capitalregionsarenon-metropolitan,collectivelyreferredtoasregionalAustralia. Alleviatingregionaldisadvantages,notprimacyperse,haslongbeenpartofAustralia’ s politicallandscape(Archer, 2015).Thisappliesasmuchtoimprovingthestandardof livinginnon-capitalregionsasitdoestomanagingcongestioncostsinthestatecapitals. However,initiativestodecentralizeeconomicdevelopmentinstateshavelargelybeen unsuccessful(Bolleter, 2018;RegionalAustraliaInstitute, 2015;Tonts,Martinus,& Plummer, 2013). ‘Governmentconcerntochangethenationalpopulationdistribution hasbeenaconsistentelementinallpostwarfederalgovernments,’ tolittleeﬀect (Archer, 2015,p.97).Perhapsthisisbecausegovernmentdecentralizationstrategies havelittlealignedwithevidence-basedrecommendationsforachievingdecentralization.

Intheory,thetermdecentralizationusuallyreferstodevolution, signifyingthedownwardtransferofdecisionmakingintolowertiersofgovernment(Bird, 2000).Proponents suggestthisiseconomicallyoptimalonthebasisthatitovercomescentralplanningand giveslocalregionscontroltodevelopindependently,unlockingthepotentialofsecond citieswhichcanbestuntedundercentralization(Rondinelli, 1983;Rondinelli,McCullough,&Johnson, 1989).Otherbeneﬁtsincluderestrainingcentralauthority,boosting localparticipation(Grant&Drew, 2017),fosteringjurisdictionalcompetition(Cheng, 2019),andbroadeningpublicsectorcapabilities(Arzaghi&Henderson, 2005).Indeed, Schneider(2003)andCheng(2019),bothofwhomreﬁnedthemeasureofdecentralization,suggestedthemostsuccessfulformsofdecentralizationdevolvedpowersub-nationally,specifyingthatdecentralizedeconomicdevelopmentisnotpossibleamidstweak localism.SimilarlyinAustraliatheeconomistStilwell(1974,p.15)argued

Figure1. MapofAustraliafeaturingpopulationdensityandstate/territorialcapitalcities.Source:ABS (2016).

decentralizationofpoliticalpowerisaprerequisitetodecentralizeddevelopment.Nearly ﬁftyyearslater,callsforlocalismand/orregionalismremaintopical.Liaros(2019) extolledadecentralizedmodelofhumansettlementwherecommunitiesareresponsible forinfrastructure(e.g.renewableenergy),ratherthanrelyingupondistributions.

Inpractice,whilstmanycountrieshaveembarkedupondecentralizationprogrammes (Manor, 1999),thereissignificantcriticismoftheefficacyofthesereforms,particularly wheredecentralizationisviewedasasingular,sudden,and finiteeffortasopposedtoan ongoing,carefullysequenced,evolutionaryprocessofcapabilitybuildingandadaptation (Falleti, 2005).Furthermore,Rodden(2004)explainsthatmanyreformsonlypartially devolvepower,suchaswhenexpendituresaredevolvedyetthecentralgovernment retainsrevenueraisinganddistributesresourcesprescriptively.Suchexamplesconstitute thedecentralizationofheavy-liftingnotdecisionmakingandthereforeRoddenemphasizedmulti-factormeasuresofdecentralizationtoensureaclearunderstandingofwhat exactlyhasbeendecentralized.SimilarcritiquescanbemadeofinitiativesinAustralia wherefederalappealsfordecentralization,suchas RegionsattheReady (Drum, 2018) or RegionalDevelopmentandDecentralizations (CommonwealthofAustralia, 2017), focuseduponthegeographicfootprintofcentralgovernment,notpowerdevolution (alsosee:Bolleter,Freestone,etal., 2021). ‘Decentralisationwasinterpretedasthe

relocationofcentralstructuresintonon-capital-cityregions,ratherthananypossible decentralisationofdecision-makingpower’ (Eversole&Walo, 2020,p.300).Common todecentralizationinitiativesinAustraliaisstableintergovernmentalpowerdespiteprescientcallsforlocalismandregionalism(Brown, 2007b;Brown&Bellamy, 2010;Paül& HaslamMcKenzie, 2015).

ResignationaboutdecentralizationshouldnotsignifythatAustralia’sregionsare undesirable.Archer(2015,p.10)remarksthatregionalAustraliais ‘neglectedinconsiderationofthenation’sdemography Non-metropolitanpopulationsaresometimes depictedasstatic,homogenous,declining,conservativeormoribundbutinfacttheyare asdynamic,heterogenousanddiverse’.Verifyingthisdynamismwasrapidnon-capital citygrowthinrecentdecadesasAustralianssoughtmoreaﬀordable,lesscongestedcommunities(RegionalAustraliaInstitute, 2020).TheRegionalAustraliaInstitute(RAI) describedthesetrendsasan ‘opportunityforregionaltownsandcitiestogrowtheir populationand[advance]regionalprosperity’ (RAI, 2020,p.42),todivertAustralia’ s expectedhighpopulationgrowthintonon-capitalcityregionsandavoidamega-city future.AccordingtoArcheretal.(2019,pp.29–30),todosomeansthecapitalsavoid congestioncostsanddiminishingliveabilitywhilstthenationasawholebeneﬁtsfrom ‘biggerneteconomicgains assmallercitiesgrowandcapturefurtheragglomeration economies’ .

4.AnintroductiontoAustralianinstitutions

FormillenniaAboriginalAustralianswere ‘buildingdamsandwells,planting,irrigating andharvestingseed;preservingthesurplus andmanipulatingthelandscape’ asagriculturalists,asettlementsystemwithitsownimplicitinstitutions(Pascoe, 2018). Indeedindigenousthinking,suchas ‘kinship-mind’ and ‘story-mind’ (Yunkaporta, 2019),aswellasenvironmentalmanagementstrategies(Graham&Maloney, 2019)are increasinglypartofthesustainabilitydebate.Indigenousinstitutionsarealso ﬁnding theirwayintothepoliticalarena,suchasthe ‘UluruStatementfromtheHeart’ ,a 2017ConstitutionalreformmovementadvocatingforgreaterindigenousvoiceinAustralianfederalism.

Undercolonizationindigenousinstitutionswereoverwritten,littleinformingthose governingAustraliatoday.Aftercolonization(1788–1901),Australiawasfederated underitsConstitutionin1901.Federationdidnotsignifyindependencebuttheunion ofAustraliaintoasinglecolony.Legalsovereigntygraduallyformalizedoverthetwentiethcentury,culminatingintheAustraliaActof1986whichrecognizedtheindependenceofAustralia’sParliamentandHighCourt,thoughbothenjoyedpractical independencelongbefore(Grant&Drew, 2017;Warhurst, 1993).

Australia’sConstitutionrecognizestwotiersofgovernment,theCommonwealthand states.ThefoundersadoptedtheAmericantraditionofa ‘strictlylimited’ federalgovernment,howeverfederalencroachmentintostatepolicyarenashasbeensubstantial (Fenna, 2019,p.49).Forexample,state ﬁscalpowerswerefederallycooptedduring theworldwars(Burton,Dollery,&Wallis, 2002)amidsta ‘federalinvasionofdirecttaxation’ thatwasneverrescinded(Smith, 1993,p.46).Advocatesoffederationpromised regionalAustraliathatafederatedAustraliawouldunitesixcentralizedcoloniesand resultinAmerican-styledfederalrestraint,creationofnewstates,andlocalism

(Brown, 2007a,p.235).However,Australia’strajectoryischaracterizedbyoncepowerful statesbeingdominatedbyagrowingcentralgovernment(Braun, 2011;Craven, 1992; Fenna, 2007, 2012;French, 2012;Galligan, 2012;McMinn, 1994;Saunders&Foster, 2014).

LocalismisnotabsentfromAustralia,thoughitsthirdandlocaltierofgovernmentis notprovidedforintheConstitutiondespitetwofailedreferendatoincludeit(1974, 1988).AccordingtoAulichandPietsch(2002),thefoundersleftlocalgovernment ‘ on theshelf’,tobeformalizedafternationalcohesionwasdealtwith.Eachstatemanages anindependentsystemoflocalgovernmentwithover ﬁvehundredLGAsnationwide. LGAsvarywidely,includingsmallruraltowns,crowdedcitiesandlarge,country-sized shires.WhilstLGAcapabilitieshavebroadenedinthelast ﬁftyyears,theyremain highlybeholdencreaturesofstates,not ‘well-springsofathrivingdemocraticpolity’ (Grant&Woods, 2016,p.247).Thus,cursoryglanceatAustralia’sthirdtierofgovernmentsuggestsprimacyinstatesappearsconcomitantwithweaklocalism.

5.Methodology

Aninstitutionalinterpretationofprimacyreliesupontwostylizedfacts.First,urban systemsaremassconcentrationsofinfrastructure,thecomponentsofwhichare enabledandregulatedbygovernment.Second,theintergovernmentalbalanceof powersculptsanurbansystembysteeringinfrastructureprovision(e.g.transportation infrastructure,services).Weask, HowispowerdistributedbetweenAustralia’stiersofgovernment?Whatfeaturescompoundprimacyinstates? Inouranalysiswediscusseachtier asamonolith;within-tiervariationisnegligibleforourpurposes(Dollery,O’Keefe,& Crase, 2009).Australianterritoriesareomitted,ourfocusisprimacyinstates.

Weutilizeaclassificationresearchstrategy,aprocessofcreating ‘newknowledgeby sortingandstructuringdataintoasystemoforganization,usingtypicalproperties,patterns orthemes’,enablingthetestingoftheory(Swaffield&Deming, 2010,p.126). Givenaninstitutionaltheoryofprimacy,wherecentralizedurbanizationisconcomitant withcentralizedpower,weassembledindicatorstoclassifytherelativepowerofeachtier ofgovernment.Thegovernmentpowerindicatorsusedinourstudyarepresentedin Table1,representingpolitical, fiscalandadministrativedimensionsofpower.Political powerreferstoatier’sConstitutionalrecognition,powertoelectleadershipandlegislate. Fiscalpowerreferstoatier’spowertoraise,distributeandspendmoney.Administrative powerreferstoatier’sabilitytoimplementlegislation,scopeofactivitiesadministered anddegreeofautonomytherein.Foreachmeasureatier’spowerisclassifiedand scoredasstrong,moderateorweak(1.0,0.5,0.0respectively).Usingtheanalytichierarchyprocess(Saaty&Vargas, 1991)weweightedmeasuresbasedupontheirabilityto enable/impedeatier’scivicleadership(e.g.strategicplanning,infrastructureprovision, fiscalcontrol,processownership).Ourweightingsareadmittedlysubjective,asSaaty (2008,p.85)explains,aninescapablereality ‘evenwhennumbersareobtainedfroma standardscaleandareconsideredobjective,theirinterpretation[remains]subjective’ . Wetermthecumulativescore, PowertoLead,indicatingthepowerofatier’spolitical unitstospur,steerandowneconomicdevelopmentintheirterritories.

MeasuringPoliticalPower: Politicalmeasuresfocusonrecognition(P1,P2),elections (P3,P4),protectionsandpermissions(P5,P6).Recognitionisdeterminedbygeographic

delineationand/orprovisionintheConstitution.Votingiscapturedbydemocraticelectionsandwhethertheexecutiveiselected.Protectionsandpermissionsreferstolegal meansofsuspendingatier’sactivitiesandauthority,permissionsandrights.Fordata weutilizedAustraliangovernmentdocuments/reports(AustralianBureauofStatistics, 1912–2012;AustralianGovernment, 2020a;AustralianLocalGovenmentAssociation, 2020;CommonwealthofAustralia, 2010),aswellasreviewofthefederalismandlocal governmentliteratures.

MeasuringFiscalPower: Fiscalmeasuresfocusonrevenueandtransfers(F1,F2),selfsufficiency(F3),expenditure(F4),and fiscalauthority(F5,F6).Revenueandtransfers measureeachtier’sroleintaxationandrelianceupongrants.Self-sufficiencyismeasured byown-sourcerevenue(OSR)asapercentoftiertotalrevenue.OSRequalstierrevenue (includingtaxes,salesofgoods/services,interest,dividends,royalties,etc.)minuscapital grants,currentgrantsandsubsidies.Forexpenditurewemeasuredeachtier’sexpenditureasanationalpercentage.Foroverall fiscalauthoritywedeterminedeachtier’ s abilitytoconditiongrantsand fiscalauthority/rights.FordataweutilizedAustralian BureauofStatistics(ABS)(1912–2012, 1975–2018, 1994–2020)statisticsandreviewed the fiscalfederalismandlocalgovernmentliteratures.

MeasuresofAdministrativePower: Administrativemeasuresfocusupontheprovision ofinfrastructure(A1–A5)andautonomy(A6).Infrastructureincludeseconomic(e.g. electricity,water,transport,communications)andsocial(e.g.criminaljusticesystem, education,healthcare,welfare)componentsessentialtoeconomicdevelopment,with greaterweightinggiventoeconomicinfrastructureduetoitsprerequisiterole (Fulmer, 2009).Finally,wemeasuredautonomyasadministrativerightsandauthority ofeachtier.Fordataweutilizedgovernmentdocuments/reports(Webb, 2004)and reviewofthefederalismandlocalgovernmentliteratures.

6.Results

Ourresultsarepresentedintwoparts.First,wepresenteachdimensionofpowerseparately.Second,wepresentthecumulative PowertoLead

PoliticalPowerResults: Table2 summarizesthepoliticalpowerresults.Startingwith recognition(P1),thefederalandstategovernmentsareintegralsubjectsoftheConstitution,localgovernmentisnot(CommonwealthofAustralia, 2010).Withgeographic delineations(P2),alltiersofgovernmenthavemutuallyobservedboundaries,though LGAboundarieshavebeenwidelycontested/redrawnbystategovernments(Dollery, 2009).Intermsofelections(P3),federalandstateelectionsarecompulsoryforcitizens (ABS, 1912–2012)andLGAelectionsarecompulsoryinQueenslandandVictoria (Bowman, 1983).Australia’sexecutive(P4)isinherited,notelected(Commonwealth ofAustralia, 2010).InpracticethemonarchdelegatestheirresponsibilitiestoaGovernor General(GG),theactingheadofstate,conventionallychosenonadviceofthePrime Minister.Statesareorganizedsimilarly,theirheadsofstatearethesamemonarch,representedbyappointedGovernors(ABS, 1912–2012).Withinlocalgovernment,40%of mayorsareelectedwhiletheremainderareelectedcouncillorsselectedbycouncil (Sansom, 2014).

Federalgovernancecannotbesuspended(P5)byothertiersandtheCommonwealth haslimitedrightstosuspendstategovernmentactivities.However,theGovernorGeneral

Table2. Measuresofpoliticalpower(P1–P6).

IDMetricnameFederalStateLocalFederalStateLocalFederalStateLocal Sources

P1Constitutional recognition FederalFederalStateStrongStrongWeak0.0220.0220.000CoA(2010);AustralianGovernment(2020a);GrantandDrew(2017), Sansom(2009)

P2Geographic boundaries Yes/ Stable Yes/ Stable Yes/ Unstable StrongStrongModerate0.0710.0710.035ALGA(2020);AustralianGovernment(2020a)

P3DemocraticelectionsYesYesYesStrongStrongStrong0.0280.0280.028ABS(1912–2012);Bowman(1983)

P4Executive democratically elected NoNoYesWeakWeakStrong0.0000.0000.017ABS(1912–2012);Sansom(2014)

P5Governancecanbe suspended Yes/ Rare Yes/ Rare Yes/ Frequent ModerateModerateWeak0.0380.0380.000Painter(2001);Burtonetal.(2002);Head(2007);Fenna(2019);Australian Government(2020a)

P6Statutoryrightsand safeguards ManyManyFewStrongStrongWeak0.1180.1180.000Vince(1997);Painter(2001);Burtonetal.(2002);Head(2007);Sansom (2009);GrantandDrew(2017);Fenna(2019);AustralianGovernment (2020a);Steytler(2009) 0.2770.2770.080 Maximumpossiblescorepertier:0.332

andGovernorshavereservepowerstosuspendfederalandstategovernmentsrespectively(e.g.1975dismissaloftheWhitlamfederalgovernmentwhichtriggeredaconstitutionalcrisis).Bothtiersremainmoderatelypowerfulgiventhissuspensionpotential israrelyexercisedandhotlycontested,howeveritremainsalegalreality.ForLGAs, localgovernanceisatthediscretionofstatesandcanberevokedatanytime(Grant& Drew, 2017;Vince, 1997).

Relativetostatutoryrightsandsafeguards(P6),theCommonwealthhasinvadedstate legislativearenasexpandingitscontrol(Fenna, 2019).Head(2007)attributedfederal intrusiontotheHighCourt’sexpansiveinterpretationoffederalpower.Still,states possessconstitutionalsafeguards,distinctivegovernmentstatus,thepoliticalloyalties ofresidents,andinstitutions(Painter, 2001,p.138).Wethereforeclassifybothfederal andstategovernmentsasstrong.Conversely,theproclivityofstatestointervene, abolish,redrawandreorganizeLGAsdemonstratesweakness.Whilethispowerisnot uniquetoAustralia(Americanlocalgovernmentsarealsocreaturesofstates),Australian statesexerciseitfrequently,aheavyhandillustratedin ‘balkanised’ capitalcityregions, urbanareascomprisedofmanysmallLGAsandthestate’smonopolisticmetropolitan control(Sansom, 2009;Steytler, 2009).

FiscalPowerResults: Table3 summarizestheresultsfor fiscalpower.In financialyear 2018–2019theCommonwealthreceipted81.39%ofpublicrevenueswhilststatesand localgovernmentscollected15.44%and3.38%respectively(F1),signifyingvertical fiscalimbalance(VFI)(ABS, 1994–2020).VFIisawellexaminedfeatureofAustralian federalism,wherebyfederalrevenuegenerationexceedsfederalspendingobligations (Burtonetal., 2002;Mathews&Grewal, 1997,p.767;McNeill, 1997,p.25;Twomey &Withers, 2007,pp.37–38).AustralianVFIisregardedasextremeand ‘oneofthe mostcontroversialfeaturesofAustralian fiscalfederalism’ (McNeill, 1997,p.25).

Federalgovernmentrevenues(F2)accountfor72.45%ofnationalexpenditure(ABS, 1994–2020).Removingsubnationalgrants,federalgovernmentrevenueaccountsfor 28.38%,illustratingthescaleofAustralia’sfederaltransferprogramme,calledhorizontal ﬁscalequalization(HFE),whichintendsthesameminimumstandardofserviceforall Australians(Burtonetal., 2002;McLean, 2004;Worthington&Dollery, 2000).State relianceuponHFEwasapparentinmeasuresofown-sourcerevenues(OSR)(F3), whereOSRcomprisedonly54.26%ofstaterevenues.Federalandlocalgovernments demonstratestrong ﬁscalself-reliance,theirOSRs98.79%and86.23%respectively (ABS, 1994–2020).

Excludingcurrenttransfers,expendituremeasures(F4)illustratestrongfederaland stateroles,29.77%and33.21%ofnationalexpenditurerespectively,whilstlocalgovernments accountfor5.65%,upfrom4.25%in1994–1995(Grant&Drew, 2017).Intermsof conditioninggrants(F5),federalfundingisnotconditionedorprescribedbyothertiers. Betweenthefederalandstategovernmentstheproportionofconditionalpaymentshas increaseddramatically,from1%in1920toover50%bythe2010s(Fenna, 2019,p.40; Grewal&Sheehan, 2004,p.566).Statesremainmoderatelypowerfulgiventheir controloverweakLGAs.Forexample,statesengageincostshifting,wherethey devolveresponsibilitiestoLGAs.Thisindirectlyconditionsgrantsandexpenditureby steeringLGAactivities(Dollery,Byrnes,&Crase, 2008).

Weclassiﬁedthefederalgovernment’ s ﬁscalauthorityandrights(F6)asstrongdueto itsabsolutecontrol.Forexample,theAustralianLoanCouncilcoordinatesandregulates

Table3. Measuresof ﬁscalpower(F1–F8).

F1Tiertaxrevenueaspercentofnational taxrevenue

F2Federalrevenuebefore&aftercurrent transfersaspercentofallpublic

F4Tierexpenditureaspercentofnational

F5PowertoplaceconditionsovergrantsYesYesNAStrongModerateWeak0.0760.0380.000GrewalandSheehan(2004);Dolleryetal. (2008);Fenna(2019)

F6Fiscalstatutoryauthority/rightsHigh/ManyModerate/ Some Limited/ Few StrongModerateWeak0.1200.0600.000DepartmentoftheParliamentaryLibrary (2002);APC(2008);Dolleryetal.(2009); Sansom(2009);

*FinancialYear2018–2019

.1900.067 Maximumpossiblescorepertier:0.419

federalandstateborrowing.AccordingtotheDepartmentoftheParliamentaryLibrary, theCouncilhasundergonedecentralizingchanges,includingnolongerborrowingon behalfofstates,allowingstatestoenterinto financialarrangementsastheychoose, andallowingstatestoissuesecuritiesintheirname(DepartmentoftheParliamentary Library, 2002),butitsexistencemeansfederalpermissionsarerequiredforstatesto borrow.Statesretainamoderateamountof fiscalpowergivenlargeexpendituresand LGAcontrol.ThoughLGAsarelargelyself-reliant,theyoperateina ‘non-discretionary’ environment(Dolleryetal., 2009,p.289)withnoguaranteeof fiscalautonomy(Sansom, 2009).

AdministrativePowerResults: Table4 summarizestheadministrativemeasures.For infrastructureprovision(A1–A5),Webb(2004;alsoseeAustralianProductivityCommission, 2008)describesadecentralized,coordinatedwebofinfrastructureprovision thatreliesheavilyuponstates.Theprovisionofelectricity(A1)andwater(A2)are largelyimplementedandmanagedbystateswithsomelocalsupport.Allthreetiers providetransportation(A3)andsocial(A5)infrastructure,thoughbig-ticketitemsare thepurviewofCommonwealthandstates.Theprovisionofcommunications(A4)is sharedbetweenthefederalandstategovernments.

Relativetooveralladministrativeauthorityandrights(A6),thefederalgovernment hasexpandedadministrativelysinceFederation.However,itwouldbeoverstatedto suggesttheserightsarebeyondmoderateoroutweighstates.Fenna(2019)emphasized thatstatesremaincriticalimplementorsamidstthefederalgovernment’sexpandeddirection.Forlocalgovernment,historicallyLGAsplayedaminorroleexceptinafewmetropolitancases(e.g.Brisbane)andwereotherwise ‘heavilymonitoredandconstrained’ (Grant&Woods, 2016,p.245).Despitethis,weclassiﬁedLGAsashavingmoderate administrativeauthorityandrightsgiventheyhaveinheritedmanystateandfederalgovernmentactivities(Bowman, 1983;Marshall, 2010).

6.1.Powertoleadresults

Figure2 featureseachtier’scumulative PowertoLead score.Wherethemaximumscore was1.000,thefederalgovernmentscored0.840,states0.706andlocalgovernment0.273. Thefederalgovernmentwasequalwithstatesinpoliticalpower,hadhigher ﬁscalpower, andweakeradministrativepower.Stategovernmentshaveacomparable,albeitweaker, measureof PowertoLead thanthefederalgovernment.Statesareadministrativelyand politicallystrongbut ﬁscallyweak.Localgovernmentsareweakoverall,theweakest tierinalldimensions. PowertoLead isconcentratedinthefederalandstategovernments whilstlocalgovernmentsaresubstantiallyweaker.

7.Discussion

7.1.Weaksub-stategovernment

Simultaneousweak PowertoLead inlocalgovernmentandcentralizedurbanizationin Australianstatesisconsistentwiththetheoreticalthrustofinstitutionaleconomics andtheexperienceofprimacyinternationally,albeitAustraliaexhibitsasub-national version.Thatis,Australiamaylacklargenon-capitalcitiesbecausecitiesaspolitical

Table4. MeasuresofAdministrativePower(A1–A6).

A1ProvisionofelectricityNo MostSomeWeakStrongModerate0.0000.0200.010Webb(2004),APC(2008),CoA(2010), Fenna(2019)

A2Provisionofpotableand wastewater No MostSomeWeakStrongModerate0.0000.0200.010Webb(2004),APC(2008)

A3ProvisionoftransportationYes YesYes

A4ProvisionofcommunicationsYes YesNo

A5Provisionofsocial infrastructure Yes YesYes

A6Overalladministrative authority/rights

Figure2. PowertoleadbytierofAustralianGovernment.

unitsarehamstrungincriticalways.However,weaklocalgovernmentshouldbeinterpretedinthecontextofitsnascency,havingemergedintheshadowofstates,anotable diﬀerentiatorfromtheexperiencesoftheUnitedKingdomorUnitedStateswherelocalismwastheinitialcondition(Kelly, 2011).Australiansettlersoftenarrivedreluctantly toaharshclimateandinvariablyrelieduponaresourcefulcentralgovernment.Sinceits modest,scattered,andsometimesimposedinception(e.g.1838,PerthTownTrust),local governmenthasmaturedinto(byglobalstandards)asophisticated,adaptable,andcomplimentarytierofadevelopedpublicsector.Thismaturationwilllikelycontinue.

Theaforementionedweaknesspertainstosub-stategovernmentgenerally.Thelackof aregionaltierisnoteworthygiventhesupportiveroleregionalgovernancecanplay(Paül &HaslamMcKenzie, 2015;vanStaden&HaslamMcKenzie, 2019).Hadwedonethis analysisofCanadaandtheUnitedStates,fourtierswouldhavebeenassessedincluding counties,aformaltierbetweenlocalandstate/province.Burton(2017)andtheAustralianProductivityCommission(APC, 2017)discussedthecomplexitiesderivingfroma systemwherestatesdoubleasmetropolitanauthoritiesandlocalgovernmentsdouble ascounties.BurtonwascriticalofAustralia’srelianceuponappointed,insulated,and easilydissolvedspecialpurposebodiesintheabsenceofelectedmetropolitangovernment.Likewise,theAPCrecountednumerousstrategicplanningissuesarisingfrom weaksub-statestructuresandcapabilities,suchasfragmentedandduplicitousregional developmentinitiatives.

Aqualification – whilstwecharacterizelocalgovernmentasweak,eachstatemanages anindependentsystemandweaknessvaries,asinQueenslandwherelocalismisrelatively strong.Asofthe2016census, fiveofthetenmostpopulatedLGAsnationallywerein southeastQueensland(Brisbane;GoldCoastCity;MoretonBayRegion;CityofLogan andSunshineCoast)(AustralianBureauofStatistics, 2019).Queenslandstandsapart foritsgeographicallylarge,highlypopulated,economicallysignificantLGAs,starting in1925whenthestategovernmentamalgamated(whatwasthen)metropolitanBrisbane

intotheCityofBrisbane,creatingthenation’smostpopulousLGA(still),thegeographicallylargestcapitalcityLGA,andaneconomicallypowerfulpolitywitha2019–2020 budgetapproximatelyhalfthatofTasmania(BrisbaneCityCouncil, 2020;Tasmanian Government, 2020).Still,thisstrengthshouldnotbeoverstated.TheQueenslandgovernmentmayhavepowerfulLGAsbutitcontinuestoforciblyandfundamentallyreshuﬄe theLGAlandscapeasrecentlyas2008,when125LGAswereamalgamatedinto73 (Dollery,Grant,&Kortt, 2013).

7.2.Signsofdecentralization

Governmentinitiativeshavehistoricallyassumedtop-downorchestrationofdecentralization,howevertherecentfederalCityDealsinitiativesuggeststhisparadigmischanging.CityDealsarenegotiatedpartnershipsbetweenalltiersdesignedtodevolve decisionmakingandcoordinateregionaldevelopment(AustralianGovernment, 2020b).AccordingtotheRegionalAustraliaInstitute(RAI),everyadditional100,000 migrantstosmallcitiessavesbillionsofdollarsincongestioncostsandreducedmortgage payments(RAI, 2016).However,despitethispotentialforregionalAustralia,capital cities ﬁgureprominentlyinCityDeals.Fiveofeightdealsfocusoncapitalregions (WesternSydney,Perth,Adelaide,Hobart,Darwin),withaninthintheworksforsoutheastQueensland,orGreaterBrisbane.Thescopeofcoordinationisalsosometimes limitedrelativetotheregionalizationethosofcitydeals(Pill,Gurran,Gilbert,& Phibbs, 2020).Forexample,thePerthandAdelaidedealsengagewithcapitalcity LGAsonly,notadjacent/contiguousLGAs,therebyconcentrating ‘dealings’ withingeographicallysmall,centralfractionsofmetropolitanregions.

Wefurthermoresharedcriticismsaboutthepoorefficacyofinitiativestodecentralize urbanizationinstates(RAI, 2015).States’ highprimacybearsthispointout,however resurgenceinnon-capitalregionssuggestsAustralia is decentralizing,tosomedegree (RAI, 2020).Sincethe1980smanyAustralianshaveembarkeduponsea-change,echange,andmorerecent flee-changelifestylemigrationsintoregionalAustraliaasa resultofretirement,remotework,andCOVID-19(Bolleter,Edwards,etal., 2021; Burnley&Murphy, 2004;Guaraldaetal., 2020).Thesecounter-urbanizationtrends presentalltiersofgovernmentwithopportunitiestomeettheconsumptivedemands oflifestylemigration(Benson&O’Reilly, 2016).Indeed,newcitieslikeGoldCoast andSunshineCoastinQueenslandalreadyhave(Mullins, 1990).Generally,capitalproximateregionshaveboomedacrossAustraliainrecentdecades(e.g.Mandurah,WA; CentralCoast,NSW;EasternMelbourne,Vic),howevertheirgrowthmaynotberecognizedasdecentralizationgiventheABS(2019)includestheirpopulationsaspartofthe greatercapitalcity,aconventionnotutilizedinsoutheastQueensland.Still,decentralizationatthemetropolitanscaleisapparent,coincidingwithsignificantLGAcapability buildingstartinginthelate1970s(Dollery&Marshall, 1997).

7.3.Fiscalcentralization

Australia’sexperienceoffederal ﬁscaldominanceisconsistentwithprimacyinternationally(Grewal&Sheehan, 2004;Sansom, 2009).Thequickpaceatwhichthefederalgovernmentascendedfromnothingtoanentitymorepowerfulthanstatesisremarkable,

renderingAustralia ‘morecentralisedinitspolitics, ﬁnancesandoperationsthanmany unitary,non-federalsystems’ (Brown, 2007b,p.16).Thus, ﬁscallyweakLGAsshouldbe understoodinlightofstateslosingthepowerstheymighthavebeenexpectedtodevolve.

Australia’ssystemofhorizontal fiscalequalizationstandsoutforitsrigour,efficacy, andfairnesstoredressfederaldominance(Matthews, 1994,p.16;McLean, 2004, p.22).However,Commonwealthcontrolnegativelyinfluencesaccountability.Earning revenueshapespublicsectorincentivesandperformancewhilstgrantsobscureresponsibility. ‘Forthesereasons,[vertical fiscalimbalance]isstronglydisapprovedbymost economists’ (McNeill, 1997,p.25).Chapman(1997)deridesAustralia’scultureofgrantsmanshipaswasteful – lowertierslobbywhilsttheCommonwealthbaitswithgrantsto advanceitsagenda.Anothergrantsmanshiptactic,LGAskeeppropertyrateslowto maximizeassistance(Sansom, 2009).Inastudyofvaluecapture,wherepropertyvalue increasesresultingfromnewinfrastructurearetaxed(Pettitetal., 2020),Murray (2017)determinedthatlocalgovernmentshavemechanismstoderivesignificant fundsviavaluecapture,howeverpropertytaxexemptionsandbudgetingpracticescan nullifythis.

Thegrantssystemisalsocorruptedwhenallocationsaresubjectto ‘porkbarrelling’ andpoliticalcalculus,somethingformerNSWPremierGladysBerejiklianconcededis common(Davies, 2020).Anotherdimensionofcorruptiondirectlyimpactingspatial developmentispropertyrezoning,whichMurrayandFrijters(2016,p.110)founddisproportionatelybeneﬁtslobbyists,representing ‘oneofthebiggestrent-seekingactivities forlocalandstatepoliticsinQueensland’.Itisnotourintenttosuggestcorruptionis uniquetoAustraliaorprimacy,butwesuggestinasystemwherelowertiersaremendicant,corruptiondistractsacentralizedgovernmentfrombeholdendependencies.

Theresultsofthisstudyalsorevealmissing kinds of fiscalpower.Specifically,outside ofgrantsLGAfundingoptionsformajorinfrastructurearerestrictive(AustralianProductivityCommission, 2008).Theneedfornewrevenuestreamsisrepeatedindebates aboutLGAinfrastructurebacklogs(Dolleryetal., 2008, 2009;Grant&Woods, 2016; Johnson, 2003).Somerecommendincreasedusageofdebt(Comrie, 2014;Grimsey, 2013) suchasAmerican-styledmunicipalbonds(Byrnes,Dollery,Crase,&Simmons, 2008;Dollery,Kortt,&Grant, 2012;Grant&Woods, 2016),debtsissuedbysub-national governmentsoncapitalmarkets.AccordingtoYoung(2012),largedomesticdebt marketsunderliedecentralizedeconomicdevelopment.IntheUnitedStatesfor example,fourtiersofgovernment(federal,state,countyandlocal) ‘haveusedcapital marketsto financetheirneedsforsometwohundredyears.[It]fuelledthecountry’ s industrialandwestwardexpansion andvirtuallyeverysubnationalinfrastructure component’ (Young, 2012,pp.929–933).TheUSmunicipalmarketisvaluedat$3.9trillionand financesovertwo-thirdsofinfrastructureprojectsintheUnitedStates(MunicipalSecuritiesRulemakingBoard, 2020).Alargemunicipalbondmarketisbydefinitiona decentralized fiscalarenathatenablesnumerouslocationsto financeinfrastructuresimultaneously,sourcingcapitalindependentfrom,orinconcertwith,highertiersofgovernment.TheabsenceofacomparablemarketrendersAustralia,inrelativeterms, fiscallyhamstrung.

Finally,theinstitutionalfocusofthispapershouldnotbeconfoundedwithcausation. Australianinstitutionswerebornamidstisolation,lowpopulation,aharshenvironment andeighteenth-nineteenthcenturytechnology,factorsthatsculptedinstitutionsand

requiredstrongcentralcontrol.Indeed,byconcentratingscarceresourcesprimacysupportsearlydevelopment,howeverwithincreasingwealthandurbanizationprimacy usuallydeclines(El-Shakhs, 1972).Itisthistransitionpointwheninstitutionsofold mayreinforcecentralization.Thus,causationisbesidethepoint.Theoretically,we emphasizereinforcement(e.g.centralizinginstitutionaldimensions)becauseAustralia isnolongeranisolated,lowlypopulatedantipodebutoneoftheworld’slargesteconomies.Furthermore,theenvironmentalconstraintsandrisksoftheeighteenthandnineteenthcenturieshavechanged.Whatitmeanstobehospitableordesirablehasto somedegreebeenupendedbyinnovation(Benson&O’Reilly, 2016;Portnov&Hare, 2012).TheserealitiesandourresultssuggestAustraliahasopportunitiestodecentralize thatitsinstitutions,intheircurrentform,areillsuitedtosupport.

8.Conclusion

Urbanprimacyisassociatedwithatop-heavyintergovernmentalbalanceofpower.To determineifthisisrelevantinAustralia,weexaminedpolitical, fiscalandadministrative dimensionsofpowertomeasureeachtierofgovernment’sstrength.Weaggregatedour resultsintothe PowertoLead,aclassificationrepresentingeachtier’sabilitytospearhead/lead/owneconomicdevelopment.Ourresultsindicatedthat PowertoLead isconcentratedwiththefederalandstategovernmentswhilstsub-stategovernmentisweak. Overall,weidentifiedtwocoreinstitutionalfactorsthatexacerbateprimacyinstates. First,thereisnopolitical-institutionalfoundationuponwhichbottom-upeconomic developmentcanbeindependently,capablyspearheadedandsustainedbylocalor regionalgovernments.Second,thepublicsector’srelianceupongrantsandprivate capitalrestrictionshamstringthepaceofdevelopment.

AmongscholarsofAustralianfederalismourcharacterizationofintergovernmental powerisfamiliar.LessfamiliaristheconnectionwithAustralia’ssettlementpattern. AnalysesofprimacyinLatinAmerica,AfricaandAsiapointtocolonizationandinstitutionstoexplainprimacyinthesecountriesandtheirsubnationalterritories,yetAustralianstateshavebeenomitteddespiteretainingthecolonialmonarchandexhibiting higherprimacy.OurresultsindicateLGAweaknessandstate/federalcentralizationare consistentwithprimacyinternationallyandinstitutionaleconomicstheoretically,speciﬁcallyAustralia’ssub-nationalversion.WeintendourstudytopullAustralianinstitutions intotheprimacydebate,introducingitspublicsectortoreformstrategiesassociatedwith decentralization(e.g.devolution),anoutcomeithassoughtforoveracentury.

Notes

1.Capitalsinthesecondtierofgovernment.

2.Formerfederal,stateorlong-servingcolonialcapitals.

Acknowledgements

ThepaperwasproducedaspartofGeorgeWilkinson’sPhDprogrammeattheUniversityof WesternAustralia.Authors’ contributions – GeorgeWilkinson:Conceptualisation,Methodology, Validation,FormalAnalysis,Investigation,DataCuration,Writing – OriginalDraft,Reviewand

Editing,Visualisation,ProjectAdministration.FionaHaslamMcKenzieandJulianBolleter: Resources,Writing – ReviewandEditing,Supervision.

Disclosurestatement

Nopotentialconﬂictofinterestwasreportedbytheauthor(s).

Funding

GeorgeShoemakerWilkinsonIII’stuitioniscoveredbytheAustralianGovernmentResearch TrainingProgram(RTP)FeesOﬀset(Domestic).

Dataavailabilitystatement

Dataavailableuponrequest.

ORCID

GeorgeWilkinson http://orcid.org/0000-0001-6942-7537

FionaHaslamMcKenzie http://orcid.org/0000-0002-7223-7731

JulianBolleter http://orcid.org/0000-0002-1514-2007

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