01 Federalism

Sharing power without erasing difference

Federalism is the political art of building a common home without requiring everyone inside it to become the same. Neither absolute centralisation nor complete fragmentation offers a satisfactory answer to political diversity. A centralised state can suppress regional autonomy and local judgment; a loose alliance may lack the authority to solve common problems. Federalism tries to combine the strengths of both.

Its central question is therefore not simply who holds power, but at which level power should be exercised—and how those levels should govern together.

1. Definition

Federalism is a political order in which authority is constitutionally divided between common institutions and constituent political units: states, regions, provinces, Länder, cantons or communities. Neither level is merely an administrative branch of the other. Each possesses autonomous authority in at least some areas, while both participate in governing the whole.

Federalism is therefore better imagined not as a pyramid, with power descending from the top, but as a series of overlapping circles. It combines self-rule - the capacity of communities to govern their own affairs - with shared rule over matters that affect everyone.

At its most ambitious, federalism is more than a constitutional arrangement. It is a discipline for organising power throughout society: decisions should be taken as close to citizens as reasonably possible, but at a wider level whenever scale, solidarity or cross-border consequences make collective action more effective. The point is not to place every decision at the lowest level automatically. It is to place it at the right level.

2. The word

The word federal derives from the Latin foedus: a covenant, pact, treaty or alliance.

That origin matters. A federal order is not supposed to begin with conquest or subordination, but with agreement. Its constituent parts bind themselves together because they recognise both their interdependence and their continued distinctiveness.

This does not mean that every partner must be identical or that every responsibility must be shared equally. Federal systems can be symmetrical or asymmetrical. What matters is that the distribution of authority is governed by constitutional rules rather than by the unilateral will of the centre.

Federalism binds through consent—but consent must be translated into durable institutions.

3. Historical origins

Federalism is neither a modern invention nor an exclusively Western one. Across history, political communities have asked how smaller societies can preserve autonomy while becoming strong enough to defend themselves, trade or maintain peace.

The Greek leagues: federalism and its corruption

Ancient Greek communities created leagues and common institutions to coordinate defence and foreign policy.

The Achaean League, particularly from the third century BCE onwards, developed recognisably federal institutions. Its cities retained local government while participating in common assemblies, magistracies, diplomacy and military organisation. It offered an early example of political communities combining autonomy with collective action.

The Delian League provides the opposite lesson. Created as an alliance against Persia, it gradually became dominated by Athens. Contributions became tribute, departure became practically impossible, and a shared alliance turned into an instrument of Athenian power.

The lesson is deeply federal: cooperation without safeguards against domination can cease to be cooperation at all.

Switzerland: unity constructed gradually

The traditional Swiss founding narrative begins with the Federal Charter of 1291, an agreement among Uri, Schwyz and Unterwalden. What emerged was not yet a modern federation but a network of alliances among largely autonomous cantons, created partly for mutual defence and the protection of local privileges.

For centuries, the cantons retained their own laws, religious traditions and political systems, while meeting through the Tagsatzung, a congress of cantonal delegates. The arrangement survived expansion and conflict, but its common institutions remained weak.

Only in 1848 did Switzerland become a modern federal state, with a federal constitution, parliament and government. Its development shows that federalism is often not created in a single founding moment. It can grow through centuries of negotiation between autonomy and common authority.

The Haudenosaunee Confederacy: peace through union

Long before the creation of the United States, the Mohawk, Oneida, Onondaga, Cayuga and Seneca nations - later joined by the Tuscarora - formed the Haudenosaunee Confederacy under the Great Law of Peace.

The Confederacy joined separate nations in a common political order while preserving their internal autonomy. A Grand Council of fifty chiefs governed through deliberation and consensus. Haudenosaunee society was matrilineal: clan mothers selected the chiefs representing their clans and could remove them when they failed in their responsibilities.

It was a sophisticated constitutional order designed to end warfare without erasing the identities of its member nations. Colonial figures, including Benjamin Franklin, were familiar with it. The precise extent of its influence on the US Constitution remains debated, so it is best understood as an important living example of political union known to the colonists - not as the single blueprint for the American federation.

4. Core principles

Constitutional non-centralisation

In a federation, powers are not simply delegated downward by a central government that can reclaim them whenever it wishes. The authority of both the federal and constituent levels is protected by the constitutional order.

The centre cannot normally abolish a constituent unit, rewrite its competences or remove its constitutional status on its own. Changes to that balance therefore require more than an ordinary political majority.

Self-rule and shared rule

The constituent units govern themselves in designated areas while participating in decisions concerning the federation as a whole.

Self-rule without shared rule produces isolation. Shared rule without self-rule produces centralisation. Federalism depends on maintaining both.

Subsidiarity and proportionality

Public authority should intervene at the smallest level capable of acting effectively. Higher levels should take responsibility where lower levels cannot achieve the objective adequately, especially when problems cross borders or require large-scale coordination.

Subsidiarity is therefore not a blanket preference for smaller government. Climate policy, monetary stability, defence, trade and the regulation of multinational companies may require action at continental level. Street design, local culture and neighbourhood services usually do not.

A higher authority should also do no more than is necessary. That is the companion principle of proportionality.

Participation in the common government

A federation cannot be governed solely by its population as one undifferentiated national mass. Its constituent units must also have a meaningful voice in central decision-making.

This is often achieved through bicameralism. One chamber represents citizens broadly according to population; another represents the constituent units. Representation in the second chamber may be equal, weighted or linked to regional governments. The exact design varies, but the principle remains: the parts must participate in governing the whole.

Independent arbitration

Disputes over competences are inevitable. A constitutional or supreme court therefore commonly acts as an independent referee between the federation and its constituent units.

Federal systems also need consultation, negotiation and a political culture in which disagreement is not treated as disloyalty.

Solidarity and equal citizenship

Federalism protects diversity, but it cannot allow geography to determine the basic worth of a citizen.

Financial transfers, common social standards and constitutional rights are often necessary to prevent regional autonomy from producing permanent inequality. A functioning federation balances local freedom with the promise that citizenship retains a meaningful common content throughout the federation.

5. Major thinkers

Johannes Althusius

In Politica Methodice Digesta (1603), Johannes Althusius described society as a network of interconnected associations or consociationes. Families, guilds, cities and provinces were not creations of an all-powerful sovereign. They possessed purposes and forms of authority of their own.

Political order was constructed from below through association. Higher communities existed to perform functions that smaller communities could not perform alone, rather than to absorb them. His emphasis on covenant, layered association and popular sovereignty made him one of modern federalism’s most important precursors.

Montesquieu

Montesquieu asked how small republics could preserve their freedom without becoming militarily defenceless.

His answer was the république fédérative: a republic composed of several smaller republics. Through federation, they could combine the internal liberty of a small political community with the strength of a larger state.

Federalism thus became a solution to the apparent choice between republican freedom and geopolitical survival.

James Madison

Madison’s most important contribution was his argument that political diversity could protect liberty.

In a large republic, numerous interests, regions and factions would compete. This plurality could make it more difficult for one faction to capture the entire political system. Federalism became part of a broader constitutional architecture of divided institutions, multiple veto points and competing centres of authority.

The American Senate’s equal representation of the states was partly a compromise between large and small states. Yet the resulting system embodied the idea that both citizens and states should be represented.

Daniel Elazar

The twentieth-century political scientist Daniel Elazar helped revive the covenantal understanding of federalism. He popularised the formulation that federal systems combine self-rule and shared rule.

For Elazar, federalism was not simply decentralisation. It was non-centralisation: a network of constitutionally protected centres that govern separately in some matters and jointly in others.

Altiero Spinelli

Altiero Spinelli transformed federalism from a constitutional theory into a European political project.

While imprisoned by the Fascist regime, Spinelli and Ernesto Rossi drafted the Ventotene Manifesto. They argued that Europe’s system of sovereign nation-states had repeatedly produced militarism, rivalry and war. Peace could not depend indefinitely on treaties among governments that retained the right to reverse course. It required democratic institutions capable of exercising authority above the nation-state.

Spinelli’s federalism was not a plan to abolish Europe’s nations or cultures. It was an attempt to prevent national governments from monopolising sovereignty and to build a democratic European order based on shared institutions, citizenship and law.

6. Different federal traditions

Dual federalism

Dual federalism seeks a relatively clear division of responsibilities between the federation and its constituent units. Each level operates primarily within its own policy domains.

It is sometimes described as layer-cake federalism: distinct layers placed above one another. The nineteenth-century United States came comparatively close to this model, although the separation was never absolute.

Cooperative federalism

In cooperative federalism, responsibilities overlap. The central government, constituent units and sometimes municipalities jointly develop, fund or implement policy.

This is marble-cake federalism: the different layers remain visible, but they run through one another. Germany, Austria and Switzerland contain strong cooperative elements.

Its advantage is coordination. Its danger is blurred responsibility: when every government participates, each may claim credit for success and blame another for failure.

Multinational and asymmetrical federalism

Some federations exist not merely to divide territory but to accommodate distinct linguistic, national, cultural or historical communities.

Those communities may receive different powers or institutional arrangements. Federalism then becomes asymmetrical: not every constituent unit possesses precisely the same competences.

Belgium is an especially complex example, combining territorially based Regions with language-based Communities. Its structure demonstrates both the flexibility of federalism and the risk that institutional ingenuity becomes difficult for citizens to understand.

Fiscal federalism

Fiscal federalism concerns the financial relationship between levels of government.

Who raises taxes? Who pays for education, healthcare or infrastructure? How much revenue should constituent units control, and how much solidarity is owed across internal borders?

Without sufficient financial autonomy, self-rule may become symbolic. Without equalisation, federalism can produce radically unequal public services. Every federation must therefore balance autonomy, responsibility and redistribution.

European or supranational federalism

European federalism applies federal principles beyond the traditional nation-state.

The European Union already possesses several federal characteristics: common institutions, directly applicable law, a court, an elected parliament, shared competences and, for many members, a common currency. Yet the member states remain central actors, retain major sovereign powers and control treaty change. The EU is therefore neither a conventional federation nor a classical confederation.

A federal Europe would not necessarily mean transferring everything to Brussels. Properly understood, it would mean creating democratic authority at European level where European action is necessary, while protecting national, regional and local autonomy elsewhere.

The weakness of the present Union is not simply that powers overlap. Powers overlap in almost every mature federation. The problem arises when overlapping authority makes democratic responsibility difficult to see. European federalism should therefore pursue greater capacity where collective action is required—and greater clarity about who is responsible for what.

7. The promise - and the price

Federalism can protect minorities and regional cultures, reduce the concentration of power, encourage political experimentation and make large, diverse states governable. It allows communities to remain different without requiring them to live apart. But federalism is not automatically democratic or efficient.

It can protect local liberty, but also local oligarchies. It can encourage experimentation, but also competition over taxes and standards. It can bring government closer to citizens, but create duplication and confusion. It can restrain central power, but generate vetoes and paralysis. It can preserve diversity, but also constitutionalise divisions so thoroughly that citizens cease to imagine a common political community.

Federalism succeeds only when autonomy is accompanied by responsibility, solidarity and a willingness to govern together.

8. Common misconceptions

“Federalism means centralisation”

Federalism may transfer authority upwards when states form a union, but it also limits the centre by constitutionally protecting the powers of the constituent units.

It is not the concentration of power. It is its organised division.

“Federalism is the first step towards separatism”

Federalism can reduce demands for separation by allowing distinct communities to preserve their identity and influence common decisions.

Badly designed federalism can also deepen territorial divisions. It is a method for managing difference, not a guarantee that political unity will survive.

“Federalism is inherently weak and inefficient”

Federal systems may be slower because more governments must cooperate. Yet slowness can also represent consultation, scrutiny and resistance to arbitrary power.

Switzerland, Germany, Canada, Australia and the United States show that federal states can possess considerable economic, administrative and geopolitical capacity. Effectiveness depends on institutional design, not simply on the number of governmental levels.

“Every federation follows the same model”

There is no standard federal blueprint.

The United States primarily organises territorial states. Belgium combines Regions and Communities. Switzerland grants extensive autonomy to cantons and municipalities. Germany integrates the Länder into federal legislation and administration.

Federalism is a family of political arrangements, not a single constitutional machine.

“Federalism and confederalism are the same”

In a federation, common institutions derive their authority from a constitutional order and normally exercise power directly over citizens. The constituent units cannot usually withdraw unilaterally.

In a confederation, the common institutions derive their authority mainly from the member states through a treaty. Decisions remain more dependent on those states and often operate through national governments rather than directly upon citizens.

“Subsidiarity means that the lowest level should always decide”

Subsidiarity favours proximity, but not powerlessness.

A municipality cannot regulate global technology companies. A region cannot defend a continent. A country cannot stabilise the climate alone. Federalism sends authority downward where possible—but upward where necessary.

9. Why it matters today

Federalism matters today because Europe is once again being tempted by the apparent safety of the nation-state.

That instinct is understandable. In periods of crisis and external threat, people tend to withdraw into familiar communities. The national border appears to offer protection, control and political clarity. But Europe carries the heavy baggage of its own history. The catastrophes of the twentieth century demonstrated that retreating into competing national sovereignties does not necessarily bring greater security. It can produce rivalry, powerlessness and conflict.

The most urgent challenges of our time do not stop at national borders. Climate change, defence, the war in Ukraine, migration, energy, digital regulation, international law and the completion of the European financial market cannot be adequately addressed by twenty-seven governments acting mainly on their own. More nationalism does not bring these problems closer to a structural solution. It pushes such a solution further away.

This is why Europe needs to rediscover the political imagination of Robert Schuman and Altiero Spinelli: the conviction that cooperation should not remain dependent on temporary goodwill between governments, but must be anchored in common democratic institutions.

European integration has often advanced through crisis. That is hardly an ideal method, but it means that the present moment is not the time to retreat. Precisely when international instability makes cooperation more difficult, deeper cooperation becomes more necessary. The intuitive response may be to return to the national cocoon. The historical and political response should be to strengthen the structures that allow Europeans to act together.

Brexit offers the clearest recent warning. “Take Back Control” promised that leaving common European institutions would restore sovereignty over migration, trade, public spending and economic policy. Yet the British experience has shown how limited such sovereignty becomes in an interconnected world. Formal freedom to decide does not automatically produce greater practical control. A country may leave a political structure, but it cannot leave geography, economic interdependence or the need to negotiate with larger powers.

Greater autonomy, when defined simply as freedom from common institutions, can therefore become an illusion. It may reduce a country’s influence over decisions that continue to affect it.

The same principle applies to more everyday questions. Mobility, labour markets, infrastructure, housing and business investment increasingly extend across municipal, regional and national borders. Within those borders, governments often encounter legal and institutional limitations. Across them lie workers, markets, knowledge and opportunities. The appropriate political scale is therefore rarely self-evident.

The debate about effective government is still too often reduced to a crude choice. One side demands more government, public ownership and national control. The other calls for privatisation, deregulation and a smaller state. Both begin too late in the argument.

Before asking whether government should do more or less, we should ask which level of government is capable of doing the job effectively, democratically and accountably.

That is the distinctive contribution of federalism. It does not prescribe that every responsibility should move upwards - or downwards. It asks where authority belongs. Some decisions should remain local. Others require regional or national coordination. Still others can only be addressed effectively at European level.

A confederal or nationalist logic begins from the assumption that the nation is the primary political reality and that common institutions are secondary arrangements between sovereign governments. This inevitably privileges the national level, even when the problem itself is transnational.

A federal logic opens a broader political toolbox. It allows solutions to be local, national, European - or deliberately shared between several levels. It replaces the sterile choice between either/or with the more demanding architecture of both/and.

Federalism is therefore not merely an idealistic project for European unity. It is a practical response to interdependence. In a world where power, markets, risks and responsibilities increasingly cross borders, the question is no longer whether sovereignty should be preserved intact. It is how sovereignty can be shared intelligently enough to become effective again.

Federalism does not promise escape from interdependence. It offers a democratic way to govern it.

10. Conclusion

Federalism is frequently presented as a technical arrangement of parliaments, competences and constitutional articles. At heart, however, it expresses a political ethic.

It rejects the idea that unity requires uniformity, that autonomy requires separation, or that sovereignty must be concentrated in one indivisible centre.

Federalism does not ask which group should finally capture the state. It asks how power can be shared so that no group, territory or centre can permanently dominate all the others.

Federalism binds through consent. Its architecture is unity without submission.

11. Further reading

Johannes Althusius - Politica Methodice Digesta The intellectual source for federalism from below: society as a web of associations rather than a pyramid built around one sovereign.

Alexander Hamilton, James Madison and John Jay - The Federalist Papers The indispensable constitutional defence of the American federation (specifically Papers 10, 39, 45, 46 and 51).

Altiero Spinelli and Ernesto Rossi - The Ventotene Manifesto The essential statement of European federalism as an answer to nationalism, war and the sovereign nation-state.

Ronald L. Watts - Comparing Federal Systems Probably the most useful modern comparative introduction. Moves beyond the American model and examines how different federations distribute authority, represent their constituent units and manage diversity.

Mathieu Segers — The Origins of European Integration The book covers the prehistory of European integration from 1937 to 1951. It shows the historical world from which European integration emerged and restores the competing projects, anxieties and federal ideas that preceded the familiar institutional history of the EU.