What Australian federation can teach us about the future of world politics, and vice versa

Abstract

In 1901 six political entities that could have been independent states chose instead to federate. When New South Wales, Queensland, South Australia, Tasmania, Western Australia, and Victoria – but not New Zealand – ceded sovereignty to a collective, they acted on some goals or interests that were prior to their desires for autonomy. Which goals or interests? I develop a theory of political confederation driven by interests in market regulation. When the governing coalition of a state can enrich itself by creating a common market with a partner but these gains come with risks of the partner's opportunism, it will willingly cede authority to a federal government that can make credible assurances. I discuss existing scholarly work on Australia's founding and present some new evidence from the decision-making process in New South Wales that supports the argument that the commercial motives for federation were pivotal. I draw on two sources of literature that, until now, have developed in isolation from each other. The first is from Australian political development studies, specifically on the political history of the Australian federation movement and the choices of six colonies to give up their independence and form the commonwealth. The second is from political economy and international political studies, specifically on how governance issues influence how states form in the first place. Each of these scholarly pursuits can benefit by taking the other seriously; that is, our ideas about the future of world politics apply in an interesting way to Australian federation, and vice versa. I proceed in three parts. First, I describe existing theories in international relations and political economy on how the demands of governance shape political institutions. These arguments address changes in macro-institutions – changes such as the amalgamation and breakup of states, the growth of empires, and the creation of international organizations – and explain these changes with changes in patterns of trade, economic production, and military technology. Here I present a part of the general theoretical argument I make in my dissertation on political confederation. The argument I present in this paper demonstrates, in the abstract, that a common desire for a common market may lead a group of states to form a federation (an arrangement in which they cede authority to a common federal government that has the power to issue binding laws) even though it might not lead them to form a customs union (a less drastic arrangement in which they pledge to each other to cooperate without creating a common authority).