Classifying governments by who rules at the top is only half the story. Equally important is how power is divided between the center and the regions. Countries differ greatly in whether provinces, states and cities have their own powers or simply carry out national decisions.

Unitary states

In a unitary state, sovereignty rests with the central government. Regional and local governments exist, but their powers are granted by the center and can be changed or abolished by it. Most countries are unitary, including France, Japan, China, Italy, Sweden and most smaller states. France is a classic example: since the Revolution and Napoleon, it has been organized around a strong central administration, though it has given its regions more powers since the 1980s.

The United Kingdom is unitary but has undergone devolution: since 1998 to 1999, Parliament has transferred substantial powers to elected bodies in Scotland, Wales and Northern Ireland. In law, Parliament could take these powers back, though in practice that would be politically very difficult.

Federal states

In a federal state, sovereignty is constitutionally divided between a national government and regional governments, such as states, provinces or cantons. Each level has powers of its own that the other cannot simply remove. Changing the division usually requires a constitutional amendment approved by both levels. About two dozen countries are federations, including the United States, Canada, Mexico, Brazil, Argentina, Germany, Switzerland, Austria, Belgium, Russia, India, Pakistan, Nigeria, Ethiopia and Australia. Because several are very large, federations are home to a large share of the world's population.

The United States created the first modern federation with its Constitution of 1787. Its Tenth Amendment reserves to the states or the people powers not delegated to the federal government. Over time, though, federal power grew greatly.

Federations take different forms. In the American model, states run many of their own programs. In Germany's cooperative federalism, the federal government makes most laws, the states, called Länder, carry out most of them, and state governments are represented directly in the upper house of parliament. India, the world's largest democracy, has a federal structure with a strong center, which can, under certain conditions, take over the government of a state.

Why federalism?

Countries choose federalism for several reasons. It can hold together large territories, as in the United States, Brazil and Russia. It can accommodate linguistic, religious or ethnic diversity, allowing groups that are minorities nationally to govern themselves where they are majorities, as in Switzerland, with its German, French, Italian and Romansh speakers, or India, many of whose states are organized by language. It can bring decisions closer to citizens, a principle called subsidiarity. And states can serve as testing grounds for policies, which the American judge Louis Brandeis famously called “laboratories of democracy.”

Federalism has costs too. It can produce inequalities between regions, duplication of government, and conflicts over which level is responsible. In some cases it has been used to protect injustices: in the United States, appeals to “states' rights” were long used to defend slavery and later racial segregation. And federalism alone cannot hold together a country whose regions want to separate; the federations of Yugoslavia and Czechoslovakia broke apart in the early 1990s.

Confederations

In a confederation, independent states join together for common purposes, such as defense or trade, but keep their sovereignty, and the central body depends on them. The United States first operated under the Articles of Confederation, ratified in 1781. The central Congress could not tax, regulate trade or enforce its decisions, and needed states' agreement for major actions. Its weakness led to the drafting of the Constitution in 1787. Switzerland was a confederation for centuries before becoming a federal state in 1848, though it still calls itself the Swiss Confederation.

The European Union

The European Union fits none of these categories neatly. Its member states remain sovereign and can leave, as the United Kingdom did in 2020. But the EU has its own parliament, directly elected by citizens; a court whose rulings bind member states; a common currency used by many members; and laws that take priority over national laws in many areas. Scholars often describe it as unique, a body with features of both a confederation and a federation.

Worked example: who handles it?

Consider how three countries might handle school curriculum.

• France (unitary). The national education ministry sets a national curriculum for all public schools. A pupil moving from Lille to Marseille follows largely the same program.
• Germany (federal). Each Land sets its own school system, and the Länder coordinate through a joint conference. School structures differ from state to state.
• United States (federal). States and local school districts set most policy, with federal funding conditions. Curricula vary widely.

Each arrangement has advantages: national consistency and equality in France; local choice and experimentation in Germany and the United States. Each also has drawbacks: uniformity that ignores local needs, or inequalities between rich and poor regions. The choice between unitary and federal design is really a choice about which differences a society is willing to accept in exchange for local self-government.