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Richard Eccleston and Richard Krever

This chapter provides an overview of the origins, evolution and structure of the Australian federation before describing the impact of the 2008–9 financial crisis on both the national economy and on intergovernmental relations. It argues that while Australia was not adversely affected by the crisis and its immediate aftermath owing to an effective stimulus program and the benefits of an unprecedented resources boom, mounting budget pressures are putting Australia’s highly centralized federal financial system under political pressure. The chapter suggests that in the absence of reform the Australian states are especially vulnerable to declining grants from the federal government. Despite these mounting fiscal pressures the federalism reform process launched in 2014 has been abandoned and there is little political enthusiasm for reform.

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The Future of Federalism

Intergovernmental Financial Relations in an Age of Austerity

Edited by Richard Eccleston and Rick Krever

The crisis and its aftermath had a dramatic short-term effect on federal relations and, as the twelve case studies in this volume show, set in place a new set of socio-political factors that are shaping the longer-run process of institutional evolution and adaptation in federal systems. This illuminating book illustrates how an understanding of these complex dynamics is crucial to the development of policies needed for effective and sustainable federal governance in the twenty-first century.​
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Richard Eccleston, Richard Krever and Helen Smith

This chapter establishes the conceptual and theoretical foundations for the ensuing volume. It summarizes the debates concerning the key features of federal governance before providing an overview of the existing explanations of change in federal systems, with a particular emphasis on the application of new institutionalism to explanations of ‘federal dynamics’. The second section of the chapter focuses on the literature on the impact of financial and economic crises of federal governance before providing an empirical account of the economic impact of the 2008–9 financial crisis on the 12 cases included within the volume. The chapter concludes by outlining how an actor-centred institutionalism is applied to the case studies that follow.