There are actually three exponentiation operators: (^), (^^) and (**). ^ is non-negative integral exponentiation, ^^ is integer exponentiation, and ** is floating-point exponentiation:
(^) :: (Num a, Integral b) => a -> b -> a
(^^) :: (Fractional a, Integral b) => a -> b -> a
(**) :: Floating a => a -> a -> a
The reason is type safety: results of numerical operations generally have the same type as the input argument(s). But you can’t raise an Int to a floating-point power and get a result of type Int. And so the type system prevents you from doing this: (1::Int) ** 0.5 produces a type error. The same goes for (1::Int) ^^ (-1).
Another way to put this: Num types are closed under ^ (they are not required to have a multiplicative inverse), Fractional types are closed under ^^, Floating types are closed under **. Since there is no Fractional instance for Int, you can’t raise it to a negative power.
Ideally, the second argument of ^ would be statically constrained to be non-negative (currently, 1 ^ (-2) throws a run-time exception). But there is no type for natural numbers in the Prelude.