Do courts affect the ways in which federalism works? This paper assesses the ability of judicial review to create incentives for central and regional governments in a federation to abide by the federal division of powers. The literature suggests that judicial predictability increases the chances that these governments respect the terms of the federation, by introducing costs to overreaching policies. I argue instead that anticipating the court’s behavior allows governments to develop transgressing strategies that are not available under conditions of judicial uncertainty. If governments can predict judicial rulings they may be able to exercise coercion or to engage in negotiations in order to by-pass judicial review and get away with violations against the existing federal division of power. I also argue that the different levels of government in a federation are more able to protect their powers when they do not share party label. This is so because partisan independence allows each government free access to the court to denounce each other‘s policies, making overreaching policies more easily detected. I test this argument with the case of Spain. I compiled a data set that includes every decision on federalism from 1980 to 2006 and show that conditions favoring coercion and negotiation tend to result in governments removing litigation from the Court’s docket, while court decisions tend to settle conflicts more often when the two governments in conflict do not share party label. The case of Spain is an ideal environment to test this argument because its recent but intense period of constitutional litigation on federalism provides a comprehensive but manageable data set. Spain’s adoption of the standard European system of concentrated judicial review implies that every case in court is the result of an explicit political choice, which makes it easy to identify the actors involved in conflict.
