You’ve heard the terms ‘federal government’, ‘federal reserve’, ‘federalist society’, and a few others. But the term itself, federalism, seems to mean different things depending on who you ask. So, what exactly is it, and what are some of the examples of federalism in the modern world?
In this article, you will get to know federalism in its many different forms. You’ll also find out how beneficial federalism might be, as well as what some of its setbacks are.
Federalism in a Nutshell
Before we can move on to list some of the prominent examples of federalism, we need to define our terms. Very broadly speaking, federalism refers to a compound mode of governing with a central (‘federal’) government and smaller regional governments.
The central government is the overarching legal body whose job is to oversee the matters of the country itself. In other words, the laws it passes and regulates concern everyone in a particular country.
On the other hand, regional governments cover laws specifically related to their own sub-unit of the country. That sub-unit can be anything, with some examples including:
Both the central and the regional governments tend to have overlapping laws, ex. laws regarding the criminal justice system, taxation, education, etc. However, they tend to operate independently from one another. More importantly, both have the capability to create and enforce new laws or change existing ones, again independently from one another.
Federalism generally differs from both confederalism and the unitary state in several key elements. For instance, in a unitary state, the central government is largely dominant over regional governments and the statutory delegation of powers comes directly from the top.
On the other hand, within a confederalist government, the central power is directly subordinate to the regional governments, and all matters of state come from the regional level. In a sense, federalism takes certain components from both of these systems and strives for a balance.
Different Types of Federalism
Of course, federalism isn’t exactly the same in every country. Depending on various factors, it can differ greatly between nations, even ones that share a common cultural heritage. So, before moving on to the various examples of federalism across the globe, this article will cover its different and diverse types.
1. Cooperative Federalism
Judging by its name alone, cooperative federalism is rather self-explanatory. It’s a type of federalism where all levels of government actually work together when trying to solve specific overlapping social or political issues. It has also been called ‘marble cake federalism’ for reasons we will cover below.
Broadly speaking, the federal government and regional governments — or state governments, in the case of the US — don’t interfere in each other’s affairs. But during certain situations, like nationwide crises, the federal government can slightly overstep its bounds. In other words, it can enact policies and pass laws that go beyond state laws and regulations, with the goal of handling the crisis as smoothly as possible.
Of course, these bounds are overstepped only with the cooperation of the regional governments. In other words, the lines between federal and state law are not crossed, but rather blurred, like patterns of a marble cake. Once the crisis is over, those new laws and regulations are usually no longer enforced.
2. Competitive Federalism
Competitive federalism refers to the need for regional governments to compete amongst each other in order to advocate for more beneficial economic systems.
Sometimes, the central government will take charge of issuing grants and setting limits on general welfare spending. State governments, on the other hand, seek to have more control over these issues, so they work hard on reducing the level of federal control. Naturally, this type of competition is also desirable between state governments and the federal government itself.
The key to successful economic growth is healthy competition, as any business owner will tell you. This same logic can be applied to the way you run a country. By enabling a level of competition, you allow for more streamlined and available services to the constituents.
But more importantly, you reduce the influence of the central government when it comes to regulations, giving your regional governments more freedom to expand and grow economically.
3. Centralized Federalism
This type of federalism is somewhat more restrictive than others. As its name suggests, the central government is responsible for setting every single policy that concerns its citizens, no matter what state or region they live in. On the other hand, regional governments have a job to enforce these laws as prescribed.
There are lots of good and bad sides to this type of federalism. After all, it makes sense that the highest authority in the country should pass laws and legislate regarding issues that concern the general public. Some of these issues include the healthcare system, food distribution, the manufacturing industry, etc.
But countries that have multiple regional governments can’t really enforce universal law across the board. For example, two states in the US have different resources, climate, demographics, and GDP, so a successful policy in one might be disastrous for the other.
4. Creative Federalism
In a sense, creative federalism is more of a transitional phase between cooperative and centralized federalism. It reached its peak during the 60s, under president Lyndon Johnson.
Within creative federalism, the central government becomes more and more involved in the welfare programs of individual states. Slowly, but surely, it created project grants that applied for the entirety of the US. In addition, it focused on encouraging citizens to actively partake in intergovernmental affairs.
The direct result of creative federalism is the loss of influence that state governments had over their own citizens. In contrast, the central government grew in prominence and would therefore enact laws that bypassed those of each individual state.
5. Dual Federalism
Earlier, we described cooperative federalism as marble cake federalism. In contrast to this metaphor, we also have layer-cake federalism, more commonly known as dual federalism.
Simply put, dual federalism refers to the type of governance where the central and the regional governments work separately from one another. They are as autonomous as possible, and each of them handles different segments of the law. Proponents of this type of federalism believe that central and regional governments holding the same amount of power is beneficial. After all, state and federal authorities, according to them, are clearly defined and the two governments each have their own duties to cover.
Over time, however, the lines between these authorities blur. As a result, certain regional laws become regulated by the central government, and vice versa. But that doesn’t go against the fact that the division still exists. The reason behind the term ‘layer-cake federalism’ is simple enough to identify. Unlike marble cakes, this type of dessert has individual sections, all clearly separated from each other.
6. Fiscal Federalism
As its name suggests, fiscal federalism has a lot to do with investments and fund allocation. In short, the central government can allocate specific funds to regional governments to support a national program.
More often than not, however, these allocations come with particular requirements that the state government needs to fulfill. Block grants and unfunded mandates are some of the many methods that fiscal federalism is represented through.
Depending on how the central government approaches its investments, fiscal federalism can alter whatever type of federalism is in power at the time. For instance, the central government can be invasive with its requirements, which can undermine the influence of state governments. On the other hand, it can provide more autonomy to the states, moving closer to dual or cooperative federalism.
7. Bush-run Federalism
Federalism under President George W. Bush, implemented between 2001 and 2009, does not have a specific type designation ascribed to it. However, it’s still noteworthy enough to be seen as a separate entity altogether. And the reason behind why it’s so distinct is quite simple. Social and political circumstances during Bush’s presidency were unique and thus it called for a different way of running things.
Despite being a representative of the Republican party, President Bush enacted many policies that gave more power to the federal government. For instance, federal spending increased by 33%, most of it geared towards funding the US defenses and the creation of the Department of Homeland Security.
Due to the events of September 11th, the federal government took a hands-on approach when it came to financing wars in Iraq and Afghanistan.
But President Bush also enacted domestic policies which resulted in increased government spending on Medicare and education. In other words, it was the type of invasive federalism that put the federal government front and center. As a result, it directly took control of many aspects of governance, overriding the power of state governments.
8. Judicial Federalism
Judicial federalism concerns the Supreme Court’s role in influencing the way in which the country is governed. The Supreme Court has the ability to rule on what is or rather isn’t considered constitutional. With that in mind, it can also determine the type of federalism that the country will apply depending on the circumstances.
In practical terms, judges that preside over the Supreme Court can decide whether a law falls under federal or state government jurisdiction. So, in certain times of crisis, it can give more power to the central government. On the other hand, it can allocate power to any of the local governments and reduce federal influence over the final decision.
The most important aspect of these allocations of power is whether or not they’re constitutional. However, that also means that each change proposed by the Supreme Court will depend on how it interprets the Constitution for each particular situation.
9. New Federalism
Stemming from the Reagan era in the 1980s, this form of federalism is characterized by taking away power from the central government and distributing it to the state governments. It was a means of making the power balance somewhat more equal and enabling the states to govern themselves without the looming pressure of the federal government from above.
One method applied to achieve this was through the use of block grants. The federal government gave these grants to the state governments with the intention of funding specific projects. However, the key component of each grant was that there were no real restrictions on their intended purpose.
To put it simply, a state government could use a block grant and spend it in any way it sees fit, without the federal government interfering.
10. Progressive Federalism
Progressive federalism is one of the newest types on this list. It came into prominence during the Obama presidency and it’s generally a mix of several other aforementioned types of federalism.
Within progressive federalism, the laws and policies issued by the federal government are still enforced by each individual state. However, the major difference is that states now have the ability to change those items in any way they see fit. For example, they could add or subtract from specific government-issued policies depending on the issue they’re facing.
This particular type of federalism is an excellent model for experimentation. Firstly, it allows the state governments more autonomy when it comes to legislation. Next, it still actively enforces certain beneficial federal government policies, but with different changes that vary from state to state.
But most importantly, it allows both the federal and the state governments to see how these changes work in practice. From that point, the federal government can pass future legislation in accordance with how these earlier changes performed. That way, both types of governments can draft future policies that align better with each others’ needs and interests.
Other Types of Federalism
The previous 10 types of federalism are more or less ‘set in stone’. They represent a particular set of governing rules that defined a generation of federal governance in the US (as well as other countries).
However, federalism changes and evolves depending on what the country requires at a certain point in history. In other words, we are bound to see other types of federalism in the coming decades, and they are bound to contain elements of all the past types, in one form or another.
Aside from the prior 10, however, there are also three types of federalism that are not defined by a historical period but are a bit broader in scope. Those three types are:
• Contemporary federalism
• Horizontal federalism
• Vertical federalism
This subtype refers to any particular federalism that is in power during a specific point in time. For example, during the Reagan era, New federalism was contemporary, while Progressive federalism was considered contemporary during President Obama’s terms in office.
In the United States, horizontal federalism refers to the relationships of all 50 states under the federal government. More often than not, it covers how changes in one particular state can affect others. Also, it deals with setting specific limits on the powers of a state so that it doesn’t infringe upon the legal autonomy of other states.
When talking about vertical federalism, people generally refer to the hierarchical relationship between two levels of government within a federal state. It deals with the federal government checking on any actions or inactions of particular states and, likewise, the state governments checking on the federal government.
Pros and Cons of Federalism
All examples of federalism globally come with their positive and negative sides. After all, no two federations are alike, and you need to take many different factors into account when applying a particular type of federal governance. And considering how often federalism evolves, each individual example will come with its own particular elements that you’ll have to address, different from all past types.
The Pros of Federalism
First and foremost, within federalism, you can individualize laws within a state based on what the local populace needs. For instance, health regulation in Florida might not be suited for you, but you can have an excellent set of health benefits in Alabama. While federal law still applies where necessary, in practice, it can be superseded by local state laws.
Next, there isn’t a centralized power overlooking everything. This is actually beneficial for both the state and the federal governments. After all, the state government can handle its own laws and policies more effectively and directly with a degree of autonomy. Consequently, the federal government doesn’t need to invest too much time and effort in micromanaging the country.
Then there’s the governing process itself. Within individual states, local members of a community can directly affect government decisions and participate in legislation. They can do this by joining county seats, school boards, etc.
Finally, there are plenty of other advantages to having a federal system in place. Some of them include:
• Recognition of local interests and differences
• An increase in flexibility
• Legal, economic, and practical innovation
• Reduction and prevention of succession (i.e. nepotism)
• A greater degree of local autonomy
• A vital Congress
• Healthy and necessary competitiveness between different jurisdictions
The Cons of Federalism
One of the biggest setbacks with federalism is the fact that you will have a lot of difficulties when you try to devise a nationwide policy. That’s true for all examples of federalism across history.
Since different states and regions have specific needs and conditions, a national policy would not be possible without some massive compromises. And in a federacy as big as the United States, getting a national policy to pass is all the more difficult.
Additionally, if a major, nationwide issue arises, the members of a federacy will be slow to respond. That’s mainly because each individual cluster handles its own problems and issues, which are major for their communities, but local in character.
Moreover, sometimes there are judicial inconsistencies. For instance, if you legalize a substance or pass a particular regulation law in the majority of states, but it still doesn’t pass on a federal level, which one takes precedence?
Other potential setbacks of federalism include:
• An increase in obstructiveness
• Lack of proper accountability
• An inefficient government
• Harmful spillover effects
• Precedence of local powerful groups over national interests
• Lack of uniformity in government policies
• The creation of a parochial Congress
• Weakening of political parties
• Weakening of nationalism.
Examples of Federalism Across the Globe
In 2022, there are quite a few countries that employ a certain type of federalism. This article focused on the United States, but governments with federal systems can be found on every continent across the globe. These are the most well-known examples:
• Argentina — the country consists of 23 provinces with the capital, Buenos Aires, having a special autonomous status
• Australia — consists of 6 federated states and 10 federal territories
• Austria — consists of 9 states
• Brazil — consists of 26 states and one Federal District where the capital, Brasilia, is located
• Canada — consists of 10 provinces and 3 territories
• Ethiopia — consists of 9 regions and 2 chartered cities, Addis Ababa and Dire Dawa
• Germany — consists of 16 states
• India — consists of 28 states and 8 union territories
• Mexico — consists of 31 states and one Federal District, where the capital, Mexico City, is located
• Nepal — consists of 14 zones
• Nigeria — consists of 36 states and one federal territory
• Pakistan — consists of 5 provinces, 2 territories, and 2 autonomous areas
• Sudan — consists of 18 states
• Venezuela — consists of 23 states, one federal dependency, and one district where the capital, Caracas, is located.