12 Different Types of Federalism (with Examples and Pros & Cons)

Washington DC Capitol dome with american flag.

Federalism is a political system that believes each state under a central government can have its own laws and customs while still sharing unified laws, customs, and currency. The central or federal government and regional governments (provincial, state, cantonal, territorial or other sub-unit governments) share the governing power.

The best example for a country with a Federalist political system is the United States. The Founding Fathers John Adams and Alexander Hamilton also founded the Federalist party during the first administration of George Washington in 1789-1793. It was the Federalists’ way to oppose the Democratic-Republican Party as well as to achieve commercial and diplomatic harmony with Britain.

Types of Federalism

Centralized Federalism

A hundred-dollar bill with a printed federal reserve.

Mostly associated with the 1960s, this was an era when the federal government essentially forced the different states to implement certain policies by grants-in-aid, or intergovernmental transfers. Examples include birth control, Medicare/Medicaid, consumer safety acts, food stamps, and other programs to help fight poverty, and even federal aid to schools.

Centralized federalism centers on the idea that the federal government should be responsible for setting all national policies, and the state and local governments should be responsible for carrying out these policies. Nowadays, France and Great Britain are good examples of centralized federalism.

In the United States, all governmental responsibilities are divided up between state and federal governments. The federal government can pass blanket laws or specific policies that affect each individual state; however, the individual states can govern anyone who lives within their borders.

In the U.K., for example, states do not have the same power. Everything is controlled by the federal government in the United Kingdom. This makes their government quite different than the government in the United States because states have a lot of control and power in the U.S.

Competitive Federalism

This type of federalism is mostly associated with the 1970s and the 1980s, and it began with the Nixon Administration. In competitive federalism, there were many efforts to reduce federal control over the grant programs and to revise the federal government’s involvement in spending on general welfare.

It resulted in more streamlined services, and it has since fueled a reaction against any type of regulatory federalism. Since the size of the federal budget is becoming more limited in regards to policy making, Congress has been more and more willing to use items such as coercive grants and even mandates in order to achieve the policy objectives that were in place during the 1970s and 1980s.

Competitive federalism creates competition between a central government and state governments, mostly regarding the leveling of the overlapping between two or more state governments in order to advocate for better and common economic interests. It is known that a successful economy will carry on healthy competition and competition between governments, which is beneficial. When this competition exists between members of a federation, it is called competitive federalism.

Cooperative Federalism

This term describes the belief that all levels of government should work together to solve common problems. Popular in the 1930s after the Great Depression, and lasting up until the 1970s, miscommunication and power struggles between state and national governments began that led to the national government taking control of the situation in order to fix certain problems, such as the economy.

The federal government instituted national programs to help repair the nation, including the REA and WPA. The central government needed a unified plan of action to take care of all Americans, so certain boundaries previously reserved for the states were crossed, and the result was that the distinction between state and federal powers became less defined. This resulted in what is now known as marble cake federalism.

Why is the term “marble cake federalism” used? Two cake, marble cake, and layer cake show two different types of federalism. The marble, or swirly part, symbolizes cooperative federalism, in which the powers are not divided but instead shared by all levels of government. The layer cake symbolizes dual federalism because the different layers represent different and distinct powers that both the states’ governments and the national government have.

Creative Federalism

Creative federalism refers to the type of federalism that gave more power to the national government and bypassed the state governments to do so, thereby allowing the federal government to have direct control over statewide programs.

Also known as “picket fence federalism,” it was most prevalent during the Lyndon Johnson years and his Great Society. During this time, the national government began to interfere more in welfare programs to help build up the nation and alleviate some of the problems that existed at that time.

During this time, the state government was often overlooked because the national government decreed what should and could be done in the states. This directly affected the local governments and the citizens of each state. As a result, the state governments weakened, and grants were used as a way to make the state governments comply with whatever the national government wanted.

Dual Federalism

Men of different parties, shaking hands.

No longer applicable in many ways, this was the belief that having separate but equally powerful branches and government levels that allow both the state and national level to have the power to balance each other out would work.

The belief known as concurrent powers is an attempt to balance these two out, and it involves powers that are shared between the states and the federal government. Over time, however, these concurrent powers blurred, and they are now less clear than they ever were. This type of federalism is also known as layer cake federalism.

Many believe that the idea of dual federalism is an optimistic view because it states that the federal and state authorities are clearly defined and do, in fact, exist. It believes that the two levels of government, state, and federal, can live side by side and be treated equally while holding the same power.

One of the reasons it is called layer cake federalism is that it imagines a distinct separation between the two governments’ duties. Under dual federalism, for example, education should be handled by the states, since it isn’t mentioned in the Constitution.

Federalism under President Bush

President Bush during his speech.

Although not an actual type of federalism, this form of federalism is associated with George W. Bush’s presidency, and it showcased important changes and events in the history of this country. As a result, it drastically changed the type of federalism in the national government. In essence, it gave extreme power to the federal government, in part because control and unity were needed during times of need in this era.

Disasters such as 9/11 and the resulting war on terrorism required a stronger and more powerful central government in order to deal with the nation’s issues. Moreover, acts such as No Child Left Behind were seen as an extreme version of preemption, as the national government was overriding state and local governments, which, in practical terms, gave the national government more power.

Fiscal Federalism

Fiscal federalism refers to the use of funds allocated from the national government to the state governments so that a national program is supported. A good example of fiscal federalism is the categorical grant, whereby the national government gives money to the states, and that money has requirements attached.

Just like judicial federalism, fiscal federalism can have a huge impact on the type of federalism that is present at the time. The process used to distribute the money can actually shape the type of federalism in that particular era. Fiscal federalism can also be represented through block grants and unfunded mandates.

Judicial Federalism

A gavel with the national flag of USA.

Judicial federalism refers to the ability of the Supreme Court and judicial review to influence the type of federalism during certain times in the country. This happens mainly because of the judiciary and the Supreme Court’s ability to rule on what is constitutional and what is not.

In essence, the Supreme Court can decide whether the state or the central government should have power over certain laws. Supreme Court justices can allocate where the power goes, which is based on how they choose to rule and on their views of the Constitution.

Miscellaneous Types of Federalism

Federalism changes according to the needs of the state and federal governments and new ones pop up all the time. In addition to the basic types of federalism, there are others, including:

  • Contemporary federalism: this describes whatever type of federalism is present at the moment; it accommodates shifts between the nation and the states, the growth of federalism’s fiscal nature, and even debates on ideas regarding the limit of the national government’s power.
  • Horizontal federalism: this is the view of the power and the interactions being shared between the 50 states in the U.S.
  • Vertical federalism: this is the view of the central government having the ultimate power over the country.

New Federalism

This form of federalism came about in the 1980s after Ronald Reagan was elected. In it, more power was returned to the states because the national government wanted to even out the balance of strength between state governments and the national government.

Block grants were developed as a way to achieve this shift in balance. Block grants were grants given to the states with little restrictions on how they could use the money. Therefore, the national government was giving states funds for essentially whatever they wanted to do.

The Devolution Revolution was another result of this era. This was a drive to give more power to the states, and it had a great stride in the reformation of unfunded mandates. Unfunded mandates were what the national government issued to the states so that they would comply with certain orders without offering the funds of the state. It also prevented Congress from passing federal programs that could potentially cost a lot of money, which, in practical terms, returned more power to the states.

Progressive Federalism

Progressive federalism is relatively new; it was employed by the Obama administration. It allows the states to have greater control over issues that were once issued to the national government. In some instances, states could enforce more regulations than necessary on government decrees. Examples include California’s strict regulations on greenhouse or emissions gases in vehicles.

This type of federalism allows the states to comply with government requirements, but they can also include their own additions. If the states are allowed to experiment with different variations on the national government’s mandates, the national government can learn which variations work and which ones don’t. It also allows the national government to tailor its own laws so that, in the end, the laws are more effective because of what the different states have learned.

Federalism – 1790s to Today

The federal reserve bank building of Washington, USA.

Although different types of federalism have been noted throughout the centuries, most experts agree that these are the forms of federalism the United States has followed from the 1790s to today:

  • 1970 – 1930: Dual Federalism
  • 1930 to 1960: Cooperative Federalism
  • 1960 to 1980: Creative Federalism
  • 1980 to 2001: New Federalism
  • 2001 to 2008: Bush Federalism
  • 2009 to the present: Progressive Federalism

Examples of Federalism

Examples include:

  • One strong main, or national government, that has a lot of power, while the individual states have much less power.
  • When a political party believes in a central government that is controlling and is the advocate of a centralized form of government.
  • When you look at what is not included in the Constitution; for example, education. Individual state constitutions, however, do mention education, and this is the gist of federalism. Many believe that whatever is missing from the Constitution can or should be taken over by the states.
  • When you consider that the power to tax rests with Congress, specifically, the House of Representatives. Of course, states can tax their citizens within their borders, but national taxes have to come from Congress, and, therefore, the “power of the purse” rests with Congress.
  • When you look at bills such as the Commerce Clause of the Constitution. This clause says that only Congress can control interstate commerce. States can, however, control intrastate commerce. Moreover, the Supreme Court has ruled that the Bill of Rights also applies to the states.
  • By taking a look at the 10th Amendment, which states that “the powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.”

Pros and Cons of Federalism

Entrance of the federal reserve building of USA.

The Pros

Laws Can Be Individualized According to the Local Population’s Specific Needs

If you live in Ohio, your needs might not be best served by laws that are on the books in Oregon. With federalism, there is still a national set of laws, but local laws are also allowed to exist in order to meet the community’s needs. Because of this, federal laws that are considered impractical don’t have to be forced on various communities.

More People Can Be Involved in the Governing Process

It allows people to get more involved in local and state governments. This includes membership on school boards, county seats, and many others.

There is a Natural Checks and Balances System in Place

When focused on federalism, no individual group or person will have too much power because power is divided between entities, which forces cooperation in order for things to get done.

Miscellaneous Advantages of Federalism

  • Prevents succession
  • Flexibility increases
  • Innovation grows
  • Recognizes local differences and interests
  • Local autonomy
  • A vital Congress
  • Promotes a certain amount of competition among different jurisdictions

The Cons

Devising National Policies Can Be More Difficult

The current gridlock in the government is a great example of this problem. National policy is usually developed from local policies, and there are always dozens of different perspectives. However, no national action can take place without compromise, which doesn’t always happen under federalism.

Jurisdiction Questions Can Arise

A great example is the recent waves of states that have passed laws legalizing marijuana use. Since marijuana is still illegal under federal statutes, which laws take precedence in situations like this? These jurisdictional questions can be confusing and complex, and there are not always clear answers to which jurisdiction should be allowed to settle the matter.

There is Less Focus on Large Issues

Because federalism can create population centers that are focused on meeting their own needs, no emphasis is often placed on the bigger issues that can occur at either state or national levels.

Miscellaneous Disadvantages of Federalism

  • The possibility of an inefficient government
  • Lack of accountability
  • Obstructiveness
  • Policies that are not uniform in nature
  • It protects local groups that are very powerful
  • It can cause some harmful spillover effects
  • Nationalism can be weakened
  • It can make the political parties weak
  • It can lead to a parochial Congress

Further Reading: What are the Advantages and Disadvantages of Federalism?


Block Grants: These are grants given to state governments, and there are few restrictions regarding what to do with the money.

Categorical Grants: These are federal grants given to states for a specific purpose; for example, for the building of a new airport.

Centralist: This is a person who prefers that the national government take over an issue, rather than the state or local government.

Commerce Clause: A clause in the Constitution that gives the federal government the right to regulate any business activity that crosses state lines or activities that affect more than one state or other nations.

Concurrent Powers: Powers that are shared by both the national and the state governments.

Conditions of Aid: These are terms set by the federal government requiring states to meet certain rules in order to receive any federal funds.

Confederation: This refers to when the federal government holds limited powers and the state governments have much more power.

Cooperative Federalism: Refers to the law that states that when it comes to the nation, the federal and state governments each share the same amount of power. It is also called a marble cake federalism.

Devolution: The transfer of powers from the national government to the various state governments.

Dual Federalism: When the federal government and the state governments have separate but equal powers. It is also called layer cake federalism.

Elastic Clause: The clause that states that Congress can make any laws it deems necessary to carry out its powers.

Enumerated Powers: The powers listed in the Constitution and assigned to specific branches of government.

Extradition: This is a legal process that allows the government to take criminals hiding out in one state and return that criminal to another state for trial.

Federal Mandate: This is a requirement made by the federal government that is essentially a condition that must be met if you want to receive any type of federal funds.

Federalism: This is a form of government where a group of states, territories, etc., are governed by one central power.

Federalists: This refers to a member of the Federalist party.

Fiscal Federalism: Refers to federalism whereby funds are used to support a national program.

Formula Grants: These are grants categorical in nature and which are distributed according to a formula specified by lawmakers or in administrative regulations.

Implied Powers: These are powers that are not specifically mentioned in the Constitution.

Interstate Compact: An agreement between two or more states, which must be approved by Congress.

Judicial Federalism: Refers to when the Supreme Court and the Judiciary branch each have the ability to influence federalism.

New Federalism: This was federalism during the Reagan era; in this type of federalism, the states had more power than before.

Nullification: The right of states to declare some national laws illegal.

Progressive Federalism: This is the most recent form of federalism; it allows states to have more control over certain powers that used to be reserved for the national government.

Second-Order Devolution: The flow of responsibility and power from state governments to local governments.

Sovereignty: The right of the state to govern as it wishes, without interference from other states.

Supremacy Clause: An article in the Constitution that states the laws made under the Constitution are the greatest in the land.

Third Order Devolution: The increased influence that non-profit organizations and private groups currently enjoy in the policy-making process.

Unfunded mandates: When the national government issues orders to state governments that they have to follow, but without providing funds, in order to aid the states in achieving the requirements from the national government.

Scroll to Top