Federalism: A Comprehensive Review of Its Evolution, Typologies, and Contemporary Issues

Abstract

This study is intended to conduct a comprehensive review of federalism. This study starts from the institutional aspect and analyzes how federalism, as a compound structure, divides power between the central and local governments. Then, this study mentions that federalism also has its normative connotations, which are traceable to the theological concept of a covenant. We also elaborate on how the success of the United States’ federalism strengthened its institutional aspect while overshadowing the older covenant tradition. Next, this study presents a typological framework of federalism, introducing concepts such as coming-together federalism and holding-together federalism; dual federalism and cooperative federalism; decentralization and non-centralization; and asymmetrical federalism, non-territorial autonomy, and consociationalism, presidential and parliamentary federalism, as well as democratic federalism and authoritarian federalism/facade federalism. Next, this study compares monist federalism with multinational federalism. Then, this study examines the specific applications of federalism in fiscal, environmental, health-care, and social-welfare policies. By reviewing the history, theoretical origins, institutional development, and contemporary manifestations of federalism, this study provides a roadmap for scholars in the field of federal studies. Finally, this study also puts forward several testable hypotheses, aiming to provide operational research agendas for future studies.

1. Introduction

As a “compound” form of government [1,2,3,4], federalism is widely used in countries that wish to maintain local autonomy within a unified national framework, as a tool for regional integration, and sometimes as a mechanism for conflict management [5,6]. In general, federalism combines a central government with regional sub-governments—provinces, states, cantons, territories, etc.—within a single political system and divides power between the two levels [2,7,8]. This arrangement is not merely a power distribution but provides constitutional legitimacy to each level of government [9]. Within the two government levels, federalism is always caught in the internal tensions between federal centralization and local autonomy [10,11].

On the other hand, the success of federalism largely depends on its ability to manage these internal tensions as political environments change [12,13]. Based on differentiated contexts, federalism has also developed derivative concepts—whether for resisting tyranny on the minority, namely defensive federalism [14]; for managing diversity [5,15,16]; or for safeguarding national welfare [17,18]. This study also focuses on the performance of federalism in specific policy areas, in fiscal, environmental, and social aspects.

In this review, Section 2 mainly elaborates on two ways of understanding federalism: as a political institution and as a political norm. It also shows how the later success of the American model reinforced its institutional aspect while overshadowing the normative dimension. Section 3 provides a typology of federal arrangements: coming-together federalism and holding-together federalism; dual federalism and cooperative federalism; decentralization and non-centralization; asymmetrical federalism; non-territorial autonomy and consociationalism; presidential federalism and parliamentary federalism; democratic federalism and authoritarian federalism/facade federalism; and monist federalism and multinational federalism. Section 4 focuses on the manifestations of federalism in finance, the environment, health, and social welfare. Section 5 concludes.

In this paper, besides the theoretical discussion, several comparative observations of federalism are listed (with a focus on the United States, Canada, Belgium, Spain, etc.). Given the limitations of space and the availability of materials, federal or quasi-federal practices in Africa, Latin America, and Asia have not been comprehensively covered in this paper. This paper acknowledges the limitations of the study and suggests greater geographical diversity in the conclusion.

This paper also attempts to integrate the following threads into a multidimensional perspective. First is the institutional dimension, which emphasizes the constitutional division of power and functions. Second is the normative/covenant dimension, which highlights the legitimacy of federalism as a contract and a community. Third is the dimension of normative pluralism and interactive practice, where we briefly mention how legal pluralism/constitutional pluralism has inspired cross-level procedural dialogue. Moreover, this paper attempts to raise several research questions that have not been fully addressed and to point out directions for follow-up research: How do the multiple ports of entry of cross-level rules change the political accessibility of minority groups? What are the long-term effects of asymmetrical arrangements and non-territorial autonomy in reducing the risk of violent separatism? In the context of increasing globalization and transnational rules, how does federalism interlock with international/regional constitutional pluralism and affect policy outcomes? After a comprehensive review of the entire paper, I will summarize several testable propositions in the conclusion for future researchers to refer to.

Although this paper attempts to cover the main dimensions of federalism research, it must be acknowledged that any topic is worth a separate study. What we provide is a panorama, a compass, for researchers of federalism. From this paper, we can understand the basic research questions in this field and continue to promote in-depth communication in this area. Before proceeding with the main text, readers may refer to

Table 1. Key Terms and Brief Definitions (For Quick Reference).

Term	Brief Definition	Notes/Examples
Unitary System	A system where the central government holds ultimate authority. The powers of regional or local governments are delegated by the central government and can be revoked.	China, France, Japan
Federalism	A constitutional multi-level government system. Within the same national framework, two or more levels of government are constitutionally recognized and possess their own powers (self-rule + shared rule).	Defining federalism itself is a perennial subject of federalism studies, so it is almost impossible to give a short definition that satisfies all. Here, we temporarily adopt Elazar’s [2] widely accepted definition of federalism
Confederation	A loose alliance of sovereign states, with weak central power and high sovereignty retained by member states.	Early or quasi confederations: Achaean League, Hanseatic League, Iroquois Confederacy. Modern: The United States under the Articles of Confederation
Coming-Together Federal Model	The constituent units jointly create a federal system, not by decentralization from a single center.	The establishment of Canada, the United States, and Switzerland
Holding-Together Federal Model	The center proactively grants powers to subnational units to maintain the integrity of a diverse society.	The 1978 Spanish Constitution
Dual Federalism	Clear and relatively independent division of responsibilities between levels of government.	The United States in its Founding
Cooperative Federalism	Overlapping functions and frequent collaboration between levels of government.	The United States since the New Deal
Decentralization	The process of devolving power from the center to lower-level governments.	The 1978 Spanish Constitution
Non-centralization	A federal system jointly created by the constituent units; a terms also used to describe the current federal state being centerless.	Switzerland
Monist Federalism	Emphasizes the federal entity as a single national sovereign community.	The United States
Multinational Federalism	Federalism designed to accommodate different ethnic or linguistic groups.	Belgium, India
Asymmetrical Federalism	Different units have different arrangements in terms of autonomy.	Quebec in Canada, Catalonia in Spain
Non-Territorial Autonomy (NTA)	Group autonomy arrangements not based on territory.	Belgian language communities
Consociationalism	Elite negotiation and power-sharing governance model to stabilize divided societies.	Belgium, Bosnia and Herzegovina, Lebanon
Presidential Federalism	The executive head (president) is elected independently of the legislature. Federal power is institutionally separated among different branches at the center.	United States, Brazil, Mexico
Parliamentary Federalism	Executive power derives from a parliamentary majority. Inter-level coordination is mainly achieved through mechanisms between parties and cabinets.	Canada, Australia, India
Democratic Federalism	Federalism and democracy complement each other, expanding citizen participation and accountability through local autonomy.	Australia, Canada, Germany, Switzerland, and the United States
Authoritarian Federalism/Facade Federalism	Nominal adoption of a federal constitution, but in reality highly centralized. “Federal” is more of a decorative arrangement.	Nigeria under military rule
Fiscal Federalism	Studies the allocation and effects of fiscal functions (taxation, transfer payments, expenditure responsibilities) among multi-level governments.	Related to regional inequality and transfer payment mechanisms
Environmental Federalism	Studies the responsibilities and outcomes of environmental governance among multi-level governments.	The U.S. Clean Air Act grants states the right to set standards
Health & Welfare Federalism	Analyzes how health and social welfare issues are implemented between the federal and local levels.	Canadian health care system; U.S. Medicaid state differences

below for a quick reference to the terms frequently used in the text.

2. Understanding Federalism: Institutions or Norms

2.1. Federalism as a Mode of Political Institutions

Many scholars treat federalism first and foremost as a way of organizing political institution: the joining of otherwise independent entities into a single system while each still keeps its basic political integrity [2]. Its basic requirement is the constitutional division of power between the federation and its constituent units, allowing each level to enjoy autonomy in specific areas [19]. In this perspective, the most influential brief definition is to define federalism as the combination of self-rule and shared rule [2,20,21]. This expression highly condenses the institutional characteristics of federalism. On the other hand, it can lead researchers to mistakenly regard some institutional features (such as bicameralism, political decentralization mechanisms) as the essence of federalism [21].

A more cautious understanding of this definition is as follows: First, two or more levels of government are recognized at the constitutional level. Second, each level of government can be independently accountable to the people and possess substantial power [21,22]. Policies are not simply issued by federal government. Each level within the federal system have the power to participate in the formulation of policies at its own level [2].

The Achaean League in ancient Greece can be regarded as an early (con)federation. Its city-states cooperated in security and foreign affairs while maintaining autonomy [23,24], demonstrating a clear division of power between the central (league) and the constituent polities (city-states). The early Latin League and later the foedera system incorporated various city-states into the Roman framework through treaties (foedus), granting them autonomy and obligations for common defense [25]. This is also the source of Althusius’ later tracing of federalism to foedus. In the medieval period, in the Hanseatic League and the Holy Roman Empire, their member cities or principalities retained considerable autonomy while addressing trade and security conflicts through common institutions [26]. Similarly, in the early modern times, an Indigenous alliance in North America—the Haudenosaunee (Iroquois) Confederacy, developed a cross-tribal quasi-federal structure, establishing collective defense and diplomatic mechanisms while preserving tribal autonomy [27]. Although these ancient and early-modern cases do not fully meet the standards of modern federations, they all reflect a similar logic of institutional arrangement. That is, by seeking a balance between self-rule and shared rule to achieve cooperation.

However, the “federal” organizations just listed are closer to what we would today call a confederation, rather than a federation [28]. Their overriding aim was to protect the autonomy of the constituent unites rather than to build a strong central authority. Actually, for a very long time, “federal” and “confederal” were used interchangeably. It was not until the founding years of the United States, which we will later discuss, that the difference between the two were reinterpreted clear.

Confederation usually refers to a loose alliance among sovereign states: member states retain sovereignty, have a check on the power of the center. The membership is often revocable. Moreover, the authority of the central government usually derives from the continuing consent of the member states. By contrast, a federation is a constitutionalized double constitutionalism, the center and the constituent units coexist under the constitution. Kenneth Clinton Wheare explicitly pointed out that the core principle of federalism is the coexistence of two levels of government, each independent and coordinate [29]. The distribution of powers is guaranteed constitutionally, and there are institutionalized dispute resolution mechanisms (such as a constitutional court). In short, the extent of central authority is not the only criterion for determining a federation. The key is whether there is a constitutionalized distribution of powers and institutionalized arbitration. If a central power is entirely dependent on the constituent units’ consent at any time, then the system is closer to a confederation. If the central power is written in the constitution and protected (by the judiciary), then it is closer to a federation.

But if a more relaxed definition of federalism is adopted, then a confederation can also be regarded as a form of federalism. William Riker [30] defined federalism as an arrangement in which two levels of government exercise power over the same citizens in the same political community at the same time. Daniel J. Elazar [2,31] emphasized the diverse expressions of a “federal covenant,” arguing that from formal federations to confederations, and even certain special autonomy systems, they can all be included in the broad category of federalism. Under this relaxed perspective, there exist federal political systems with varying degrees of power distribution all over the world: From formal federations (such as the United States, Germany) to confederations (for example, the Commonwealth of Independent States), associated states (the Compact of Free Association between the Marshall Islands and the United States), federacies (Finland-Aland), condominiums (Andorra under the joint administration of France and Spain), unions, leagues, and even autonomy arrangements. Although these systems differ significantly, they all reflect institutional arrangements based on the covenantal combination of self-rule and shared rule. Within this institutional structure, the key element is dual recognition. That is, both the central and local governments recognize each other’s legitimacy and boundaries of power at the institutional level [32]. This in fact requires that federalism as an institutional structure be supported by at least a kind of normative interpretation. That is the content of our next two sub-sections.

2.2. Legal and Constitutional Pluralism: Between Institutions and Norms

In addition to historical practices of federalism, recent studies of legal pluralism and constitutional pluralism have also provided a complementary perspective for understanding federalism. Legal pluralism, which acknowledges the coexistence of multiple normative orders within the same society area. They influence each other through procedural and discursive channels in practice. Recognizing this multi-sourced normative orders provides a basis for understanding federal multi-level governance. Specifically, legal pluralism shifts the focus from constitutional power division to the overlap and dialogue between institutions. Erin Ryan [33] regards federalism as a manifestation of legal pluralism, emphasizing that in a multi-level system, different legal domains (federal, state, local) influence policy through complementary and competitive institutional channels. Paul Schiff Berman [34,35] uses a similar theoretical framework to illustrate how federalism and transnational rules interact through multiple legal domains. In this regard, Judith Resnik’s [36] discussion of federalism’s “multiple ports of entry” indicates that voices unheard in one forum might be heard in a different level. Thus, multiple ports of entry is itself a normative democratic discourse, rather than merely an institutional arrangement. Heather Gerken [37] further reminds us that in many practical aspects (especially at the local administration), the form of power is manifested as “voice” rather than full “sovereignty.” This also partially challenges the procedural understanding of federalism as merely an institutional arrangement and power division.

At the same time, constitutional pluralism, which was systematized by some scholars in the context of EU studies [38] provides another path: it does not advocate for the search for a final constitutional authority, but rather focuses on the procedural competition and coordination of different constitutional orders in practice. Some EU constitutional pluralism literature indicates that constitutional pluralism does not necessarily lead to conflict. On the contrary, procedural dialogue between institutions can become a mechanism for maintaining legitimacy and resolving conflicts [39,40]. Transplanting this idea into the study of federalism is conducive to understanding the relationship between “federal” and “confederal,” as well as between states and transnational governance, as a matter of dialogue, translation, and procedural legitimacy, rather than just a question of power division.

These modern discussions also produce a constructive academic dialogue with early ideas of multi-layered federalism such as that of Althusius to be mentioned: Gunther Teubner’s [41] societal constitutionalism emphasizes that social institutions outside the state also engage in quasi-constitutional norm-building. Nico Krisch [42], Berman [34,35] and others’ discussions on global legal pluralism expand the scope of observation to transnational spaces, showing that the same action is increasingly subject to the joint regulation of multiple national, sub-national and non-national norms. This is very similar to Althusius’ explanation of federalism that we will mention next.

Mentioning legal pluralism/constitutional pluralism in federalism discourse, in fact, can be seen as a kind of integration at the intersection of federalism in terms of institution and normativity, a transition from institutional arrangement to normative understanding. It puts the questions of how power is divided and who has sovereignty into the procedural dialogue between institutions about who can speak and how they are heard, by emphasizing the multi-sourced nature of norms. This in fact implies the normativity behind federalism as an institution and procedure. It makes us understand that federalism is not only a map of power distribution, but also a field that constantly generates political legitimacy. The formation of this field requires a covenant, which was seen by early federal scholars as one aspect of the normative requirements of federalism.

2.3. Federalism as a Norm and the Covenantal Tradition

As mentioned, in addition to being an institutional framework, federalism also carries a profound normative dimension. It is not only about the distribution of power but also reflects a concept of order rooted in covenant. In this dimension, the first to provide a systematic exposition were the Calvinist theologians of the sixteenth and seventeenth centuries, Johannes Althusius [43,44,45]. Althusius derived the etymological origins of federation from the Latin term “foedus,” denoting a “covenant” or “pact” [46] (p. 35) [47]. He elaborated a federal theory centered on reciprocal obligations among symbiotic associations (consociatio symbiotica).

In Althusius’s view, society is a chain of associations [48,49]: families form villages, villages form towns, towns form provinces, provinces form states, and states ultimately merge into an empire [46,47,50]. The nature of politics is the art of associating, the science of living together. The federation is the external manifestation of the nature of politics. As Althusius states:

“Politics is the art of associating (consociandi) men for the purpose of establishing, cultivating, and conserving social life among them. Whence it is called ’symbiotics.’ The subject matter of politics is therefore association (consociatio), in which the symbiotes pledge themselves each to the other, by explicit or tacit agreement, to mutual communication of whatever is useful and necessary for the harmonious exercise of social life” [51].

(p. 12)

Althusius regarded the Holy Roman Empire as a decentralized federation in which power was distributed to autonomous, smaller polities [52,53]. He insisted that sovereignty lies with the autonomous entity, not the center. Therefore, in the face of the rise of centralization, federalism is a legitimate form to resist tyranny [54]. This stance contrasts sharply with the absolute sovereignty advocated by Jean Bodin around the same time [55,56].

In this perspective, Althusius’s federal thought is a normative challenge to the modern state sovereignty model. In Althusius’s view, authority does not come from the top, but it is granted by covenantal communities at all levels. The highest body is merely an “agent” acting on behalf of multiple associations. Its legitimacy is derived from the consensus and covenant among the constituent members [54,57].

This tradition has two profound impacts on contemporary federalism. First, it laid the intellectual foundation for the principle of subsidiarity. This principle has become one of the core norms of the European Union’s multilevel governance. It advocates that decisions should be made at the level closest to the citizens, with higher authorities intervening only when lower levels are unable to adequately address the issue [58,59]. This principle was later incorporated into Article 5 of the Treaty of Lisbon by the European Union, and it is seen as a key tool for reconciling members’ autonomy [60].

Second, Althusius’ thought also inspired the concept of federal liberty. Hüglin interprets federalism as “primarily a horizontal process of communication,” from the grassroots level, from “a plurality of groups or communities which all possess their own rights and obligations” [61] (p. 279). Liberty within federalism thus no longer merely means being free from central government’s intervention, but means that citizens can participate in politics at different levels and in different associations [62]. Federalism is not only an institutional design to prevent centralization, but also a moral normativity that promotes civic virtue in public participation. This largely resonates the republican idea of liberty [63,64]. In this sense, some scholars argue that Althusius became a precursor to later theories of popular sovereignty and constitutionalism [65,66,67], while some scholars dispute this [68,69,70].

If the covenant tradition provides a normative foundation for federalism, then the early modern “social contract” tradition offers another, considering its influence in the United State. It sometimes complements and sometimes is tension with the covenantal theory. The social contract thinkers, most prominently Thomas Hobbes, John Locke, and Jean-Jacques Rousseau, articulated contractual theory of political legitimacy grounded in agreement among individuals [71,72,73]. Their core concern was the source of legitimate authority, and how individuals confer power to political institutions. However, the theories of these theorists are to a certain extent distinguished from the Althusius’ pattern. Hobbes argues that a single, absolute sovereign is the guarantee of peace [71]. Thus, his pattern is essentially centralized and not conducive to dispersed sovereignty [74]. In contrast, Locke’s social contract theory establishes political authority on the basis of individual consent to form a government to protect life, liberty, and property [72]. His framework can be understood as compatible with institutional arrangements for the separation of powers and checks and balances [75]. Rousseau’s concept of the general will emphasizes collective unity and popular sovereignty [73]. It may favor the concentrated expression of the public will, thus it is theoretically in conflict with pluralistic, conceptions of authority [76].

How do these currents interact in the formation of modern federal orders, especially in the American case to be mentioned? The American Founders drew unevenly on the social-contract tradition, while also being heir to covenantal traditions circulating in colonial New England (Puritan covenant theology and compacts such as Winthrop’s “city upon a hill” and various colonial compacts). On the one hand, The theories of Hobbes and Rousseau at least partially inspired the idea of building a centralized federation to resolve interstate conflicts and avoid factional tyranny. And Lockean doctrines of consent and natural rights were particularly influential in protecting the individual rights in the rhetoric of the federalists [77,78]. On the other hand, the language of compacts and mutual commitments as a form of political covenant persisted, giving rise to compact theories of union that emphasized state consent and reserved powers [79,80]. Thus, American federalism is best read as a hybrid: commitments to individual rights, combined with concerns about state reserved powers from covenantal idioms that justified plural sovereignties and inter-state compacts.

Elazar’s modern reinterpretation explicitly confirmed and promoted Althusius’s idea of the foedus etymological origin of federalism, defining its covenantal meaning as the normative basis of federalism [81,82,83]. He also borrowed the Hebrew concept of brit (covenant) and continued to interpret federalism as a mutual commitment and a covenantal relationship based on trust [83,84]. For Elazar, the development from covenant to federation has gone through three stages. (i) The covenant tradition was initially traced back to the ancient covenant between the Israelites and God. (ii) Later, this covenant gradually evolved into a contract between people, witnessed by God. The witnessing God is not an external guarantor but a co-signer—almost a tripartite covenant. (iii) In early modern times, this covenant has manifested as a contract between people and the political community, which is the basis for Althusius’s discussion of his federal and consociational theory [2]. From this perspective, federations survive not merely because of constitutional design, but also because of covenantal ethos: respect for the autonomy of constituent units with willingness to shoulder common obligations [84,85,86]. But a full account must also acknowledge that the social contract tradition, especially Locke’s restraint on centralized power and Rousseau’s emphasis on unity. Their theories centered on individual consent, rights, and the notion of the people as ultimate source of authority, provide resources for debates over popular sovereignty, constitutional supremacy, and the allowable degree of decentralization [79,80]. It can both support and contest federal arrangements. Recognizing the plurality of these intellectual antecedents helps explain why federalism has been variously mobilized in the tension between local autonomy and national unity.

2.4. The American Founding: Reforging Federalism Towards Institutions

If there is a country that has established the template for modern federalism, it is undoubtedly the United States. At the end of the 18th century, the main task facing the American Founders was to establish a more solid governance arrangement among the thirteen former British colonies to address issues of finance, national defense, and interstate coordination [87]. The political space at the time was still confined to the Atlantic coastal region. Most of inland North America was the habitation of the indigenous peoples, and there were still contests from colonial powers such as Britain, France and Spain. It was under these internal and external difficulties that the Founders began to explore the form of uniting. Their first attempt was the Articles of Confederation—a document that was more like a loose agreement of friendship [77]. Under the Articles, the states retained almost all the power: Congress could not levy taxes, could not repay the war debt, and could not prevent rural uprisings like Shays’ Rebellion. By the mid-1780s, the political system was on the brink of bankruptcy [88].

In 1787, representatives from the states gathered in Philadelphia, ostensibly to amend the Articles of Confederation [89]. However, propelled by the Federalists—whose arguments are preserved in the Federalist Papers [77]—the delegates abandoned the old charter and drafted a new Constitution that granted the central government more power than expected [30,90,91,92]. The new federal government could levy taxes, coin money, and exercise direct authority over citizens. Through the Supremacy Clause, federal laws established their authority over state regulations.

This change sparked intense controversy. On one hand, the “Anti-Federalists”, named by the Federalist for their opponents, loudly protested. They warned that a distant super government would swallow the states [93]. Under the Articles of Confederation, membership was voluntary and the central authority was weak; now the federal government claimed ultimate authority. On the other hand, the states still retained extensive autonomy—enacting most criminal and civil laws, holding elections, and even setting voting rules [90,94]. James Madison once summarized that the federal government’s powers were few and defined, while the states’ powers were many and undefined [77]. The Tenth Amendment, ratified in 1791, emphasized this point: any power not granted to the central government by the Constitution was reserved to the states—or the people themselves [95].

Ultimately, the federal arrangement was seen as a “middle way,” sandwiched between unitary systems—where everything is centralized in the center—and confederal systems—where everything is left to the constituent parts [96,97]. Although the term “federalism” never appears in the Constitution, it became an unwritten rule for establishing the new nation. The federal government had to have enough power to prevent states from abusing their authority, but it could not be so strong that it became a despotic tyrant itself.

The Founders—especially Madison—were not particularly worried that the president of the federal center would become a tyrant. They were more concerned about majorities at the local level infringing on the minorities. Therefore, they believed that only by establishing a large republic and a system of divided powers could any one faction be prevented from controlling the entire system [98,99,100,101,102]. Judged by its results, the design worked. American federalism remains one of the most outstanding practices of federalism as an institutional arrangement [4,103].

However, this successful model, to some extent, obscured people’s understanding of the older vision of federalism. The American system, which emphasizes enumerated powers, dual sovereignty, and separation of powers, overshadowed the covenantal tradition of federalism: a consociational federation of associations, shared rather than divided powers, as described by Althusius. Some critics pointed out that American federalists rarely focused on town halls, parishes, or any places where citizens could govern face-to-face [104,105,106]. It leads ultimately to a nation that speaks with one voice [97]. In fact, the Founders quietly replaced the old meaning of federalism with a new one—redefining the term “federal”: federalism was no longer a cooperative community among diverse associations/communities, but a division of power between the central and state governments.

Building a centralized political organism was the Founders’ goal [107], and those who advocated for deeper decentralization of sovereignty to local communities—in a sense, the true Althusian federalists—were stigmatized as “Anti-Federalists” and thus excluded from the mainstream narrative [99,108,109]. This manipulation of terminology, even today, still complicates the basic definition, which discussions of federalism have to face.

3. Types, Variants, and Diversity of Federalism

In this section, we will demonstrate the diverse classifications of federalism from various dimensions. This classification always has hybrids and exceptions; thus, this section does not attempt to exhaust all possibilities but merely focuses on the types most widely discussed in academia.

3.1. Coming-Together Federalism and Holding-Together Federalism

Federalism can be divided into two types based on its establishment path: coming-together federalism and holding-together federalism.

Coming-together federalism is formed by multiple independent political entities voluntarily uniting for strategic reasons. The constituent units usually have strong autonomy and symmetry. For example, the establishment of the United States was a product of 13 colonies uniting to counter external threats [30,110,111]. Canada and Switzerland also exhibit similar characteristics [112,113,114]. Although the European Union is not a federal state, its structure still has the characteristics of a coming-together federation [113,115].

Holding-together federalism is a federal arrangement implemented top-down by a unified nation facing challenges of diversity in language, ethnicity, culture, etc. In this model, the initial central government usually has greater power [110,111], and federalization is more seen as a political compromise [116]. India can be regarded as a holding-together federation. Its federal structure tried to regulate internal religious and linguistic diversity [117]. Spain’s 1978 Constitution, while promoting democratization, granted high autonomy to autonomous regions to ease separatism in Catalonia and the Basque Country [118,119]. Belgium is also a typical example of moving towards holding-together federalism to maintain national unity. It evolves from a unitary system to a complex federalism of multilingual communities [120,121].

It should be noted that although we previously mentioned that coming-together federations have greater autonomy of constituent units and holding-together federations tend to retain a stronger central government, in practice, this description is only based on the initial conditions. Later developments can easily deviate from early expectations. For example, although the United States and Switzerland were initially coming-together federal systems, the power of the U.S. federal government has far exceeded the framework originally designed [122,123]. However, Switzerland still maintains a relatively loose weak federal system. Similarly, Spain and Belgium—both holding-together federal systems—have actually pushed the entire country towards extensive decentralization under the continuous national demand for autonomy [119,120,124,125,126].

3.2. Dual Federalism and Cooperative Federalism

Based on how powers are divided and shared, federalism can be distinguished as dual federalism and cooperative federalism [12,123,127,128,129].

Dual federalism is characterized by a clear division of powers between levels of government. Each level operates independently within its own sphere, with relatively little intervention and cooperation between them. This federal structure has been vividly described as “layer-cake federalism” [130,131] since its powers are divided into distinct layers. The United States adopted this model in its early years. The Tenth Amendment emphasized that powers not delegated to the federal government by the Constitution should be reserved to the states [122].

However, as the complexity of governance increased, the limitations of dual federalism gradually became apparent, especially in dealing with cross-regional challenges such as economic crises, climate change, or environmental issues [132]. In contrast, a more collaborative federal framework developed, namely cooperative federalism. Under this model, the federal and state governments collaborate within overlapping responsibility, sharing resources. This model is commonly referred to as “marble-cake federalism” because the powers of the federal and state governments are intermingled and indistinguishable [110,131,132,133]. It looks much like the mixed, interwoven marble patterns on a marble cake.

In the United States, the rise of cooperative federalism can be traced back to the New Deal era of Roosevelt, when the administration provided a lot of financial support to local governments, and cooperated in many construction projects [123,128,133,134]. The European Union is also considered to be evolving towards cooperative federalism in environmental governance and financial issues [135]. The shift from dual federalism to cooperative federalism reflects the adaptability of federalism. The boundaries between federal and local entities are no longer rigid, but are increasingly trending towards functional integration [116].

3.3. Decentralization and Non-Centralization

Decentralization and non-centralization constitute another dimension of federal polities, revealing different starting points and evolutionary paths of power [2,136,137,138,139,140,141,142]. Although these two terms are likely to be confused in everyday language, they have distinct meanings in political analysis.

In a decentralized federal system, there is a presumption of an existing central authority that later devolves power to subordinate units [137]. This structure implies a logic that the center may—at least formally—retain ultimate sovereignty [137]. However, in practice, re-centralization may be difficult to achieve. In some countries, decentralization is seen as a response to ethnic plurality and democratization. Take Spain as an example: the 1978 Constitution established that Spain would adopt a quasi-federal model [143,144,145,146]. Spain’s fifty provinces are reconstructed into seventeen autonomous communities (ACs) [147]. The central government retains power in defense and foreign affairs; the autonomous communities have extensive jurisdiction over housing, transportation, environmental protection, roads, welfare, and social services [148] through the charters Estatutos de Autonomía [149].

In contrast, non-centralization means that the system is designed from the outset without a single, dominant center [114]. The federal government is created by the constituent units, and it is the constituent units, not the federal government, that are the dominant actors [136,142]. The U.S. federalism in the beginning strictly limited the federal government’s power to specific areas. The current federal systems of Switzerland and Canada also show similar patterns of high autonomy and power non-centralization among the constituent units [150].

3.4. Monist Federalism and Multinational Federalism

As we have already seen, the forms, purposes, and practices of federalism vary across different situations, illustrating its inclusiveness. The most direct manifestation of this inclusiveness is in how it deals with issues of ethnic plurality. Such research has become one of the most active fields within federal studies [151,152]. Currently, the rise of multinational federations is increasingly seen as a reflection on the U.S.-dominated monist federalism. The former emphasizes institutional differences based on group identity, while the latter tends to construct national identity through the uniformity and universality.

3.4.1. Monist Federalism: The United States as Example

For a long time, the United States has been seen as a paradigm of a mono-national federation, aiming to construct a unified American national identity. In practice, U.S. federalism is oriented towards reducing differences between states and emphasizing a single identity for all citizens [153,154,155,156]. As McGarry and OíLeary [157] pointed out, the U.S. federal system views subnational units as administrative entities, rather than political expressions of specific ethnic communities. This logic is typically reflected in the Federalist Papers, as John Jay once said:

“Providence has been pleased to give this one connected country to one united people—a people descended from the same ancestors, speaking the same language, professing the same religion, attached to the same principles of government, very similar in their manners and customs…” [77].

(p. 15)

This federalism embodies a form of liberal monism. It maintains national unity through individualism, civic equality, and the universality of law, rather than by recognizing the unique identities of ethnic groups and communities [5,158].

This is in stark contrast to multinational federations such as Canada, Spain, and Belgium. The latter explicitly recognize and institutionalize the existence of several “peoples” (demoi) or “nations” with unique identities within the country [157]. The United States, however, does not acknowledge the existence of multiple demoi within its borders. Instead, it deliberately avoids the institutional expression of ethnic differences by emphasizing individual freedoms and rights [159]. This constitutes the unique feature of the U.S. federal system as a monist federalism.

3.4.2. Multinational Federalism: Belgium and Canada as Examples

Many contemporary federalism scholars advocate for greater attention to multinational federal approaches [123,160]. They strive to transcend the dominance of monist identity, calling for the recognition the legitimacy of different ethnic groups, no longer marginalizing the heterogeneity of linguistic, racial, and cultural minorities [5,16,113,161,162,163].

Canada and Belgium are widely seen as such paradigms of contemporary multinational federalism. Both countries explicitly accommodate ethnic plurality through federal asymmetry, consociational mechanisms, and a degree of non-territorial autonomy [164,165,166,167]. Because the focus of this sub-section is to elaborate on the differences between monist and multinational federalism, we will only briefly mention the concepts of asymmetry, non-territoriality, and consociationalism here, with detailed introductions provided in the next sub-section.

Canada has been shaped by both English and French cultures since its founding [168,169,170]. Responding to the demands of the French-speaking community has been a major driving force in the evolution of Canadian federalism. The federal system currently has provided multi-level protection for the French-speaking community. The Official Languages Act stipulates that federal agencies must provide services in both English and French [171]. Different provinces also provide different levels of protection to the French-speaking community in terms of education and culture. In Quebec, the federal constitutional arrangements continuously respond to Quebec’s unique identity demands [15,172,173,174]. And New Brunswick is the only officially bilingual province in Canada as stipulated by the constitution. Ontario has ensured French language rights to public services in designated areas through the French Language Services Act. Manitoba has established the bilingual status of English and French. There are also sizable French-speaking communities in other provinces (such as the Acadians), and their language and cultural rights are partially protected through education, judicial and cultural policies.

At the same time, the indigenous peoples of Canada and their treaty rights are recognized and protected at the constitutional level. Section 35 of the Constitution Act, 1982, confirms indigenous and treaty rights; the three northern territories (Yukon, Northwest Territories, Nunavut) have a population structure dominated by indigenous people, and have formed a unique governance model through rights agreements and self-government systems. Within them, the establishment of Nunavut in 1999 is particularly typical. The French-speaking autonomy model represented by Quebec, across other provinces, and the indigenous self-government practices based on treaties, all together shape the pluralistic pattern of Canadian federalism.

In contrast, Belgium has adopted a path of gradual constitutional reform [175,176]. From the establishment of cultural communities in 1970 to full federalization in 1993, Belgium’s federal structure is a typical model combining non-territorial and territorial autonomy [177,178]. The country is territorially divided into three regions—Flanders, Wallonia, and Brussels—each exercising power over its own economic, transportation, construction, financial, and foreign trade affairs. Additionally, there are three language communities—French, Flemish, and German [179,180]. The language communities are responsible for language, education, and cultural affairs [11,181].

Academic research suggests that multinational federations are more stable when dealing with deeply divided societies, as they can reduce cultural assimilation pressures on minority groups. Compared to unitary mono-national federations, they more readily acknowledge cultural plurality, explicitly recognizing the existence of several “peoples” or “demoi” within the country [175]. This acceptance of multiple ethnicities, in return, allows for more complex federal arrangements, such as the previously mentioned constitutional asymmetry, consociationalism, and non-territorial autonomy [182].

However, complex multinational federal arrangements also bring challenges. They require maintaining high levels of dialogue and institutional adjustment, otherwise, they may become risk points for identity politics struggles [15,164,172,183].

Table 2. A Comparative Overview of Typical Monist Federalism (United States) and Multinational Federalism (Canada, Belgium).

Feature	United States (Mono-National/Monist Federalism)	Canada (Bi-/Multinational Federalism)	Belgium (Multinational Federalism)
Formation Type	Coming-Together Federalism	Coming-Together Federalism	Holding-Together Federalism
Identity	Single nation/unified citizen body (Mononational Demos) [157]	Recognition of multiple nations/identities (Multiple Demoi/Identities) [166]	Recognition of multiple nations/identities (Multiple Demoi/Identities) [175]
Power-Allocation	Enumerated federal powers, residual powers to states; judicial interpretation tends to expand federal powers	Enumerated federal powers + residual powers, enumerated provincial powers; judicial interpretation tends to expand provincial powers	Residual powers to federation; extensive powers devolved through successive rounds of reform [176]
Diversity Strategy	Territorial neutrality, emphasis on individual rights; adaptation via shift from “dual” to “cooperative” model	asymmetrical federalism (Quebec’s special status); non-territorial autonomy; shared rule and self-rule	asymmetrical federalism; consociationalism; non-territorial autonomy; gradual federalization
Concept of Citizenship	Individual rights primacy, emphasis on a single national citizenship	Balance of individual and group rights; recognition of dual loyalties [166]	Balance of individual and group rights; coexistence of community identities alongside national identity [175]
Main Challenges	Governmental gridlock, regional inequality, special-interest influence, risks of democratic erosion	Quebec separatism, inter-regional imbalances, intensified nationalism	Ethno-linguistic conflict, cabinet-formation difficulties, challenges to national unity [184]

below summarizes the main differences between typical mono-national/monist federations (the United States) and multinational federations (Canada, Belgium).

3.5. Innovative Concepts in Multinational Federalism

As we have slightly mentioned above, in the field of multinational federalism, scholars have proposed a number of innovative concepts to deal with the challenges of the growing aspects of ethnic diversity. Among them, asymmetry, non-territoriality, and consociationalism have become the key concepts.

3.5.1. Asymmetrical Federalism

Asymmetrical federalism is an innovation that provides tailored autonomy to prevent secession or deep-rooted conflicts. Under asymmetrical federalism, different regions or provinces enjoy varying degrees of autonomy [6,72,108,130,133,150,173,174]. Specifically, certain provinces are allowed to have more rights than others [16,82]. These arrangements usually reflect their unique historical, cultural, or political factors.

Today, asymmetrical federalism is mainly divided into two types: de facto asymmetry, caused by natural resources, population, and fiscal endowments, also known as political asymmetry, and de jure asymmetry, or constitutional asymmetry, referring to the asymmetry confirmed by the constitution and laws in terms of legislative power, representation in central institutions, and others [85,142,185,186,187,188].

Canada and Spain are prominent examples. In Canada, Quebec enjoys a special status due to its unique cultural and linguistic identity [117,185,189,190]. Although the Canadian federal government has given French and English equal status, many Quebecers are still not satisfied. They think this “equality” policy ignores their unique identity and historical status [191,192]. Quebecers demand constitutional recognition as a “distinct society” and an asymmetrical federal status [193,194].

The original intention of asymmetrical arrangements is to recognize differences and reduce ethnic tensions. But its side effects have also gradually emerged. Not only in Canada [195,196], but also in Spain [147,197,198], there is dissatisfaction caused by asymmetrical arrangements. Granting a unique asymmetrical status to specific groups often comes at the expense of other “majority” groups. Moreover, it may further marginalize minorities within minority groups [199]. For example, in Quebec, Canada, English speakers have become disadvantaged in language, education, and administrative affairs because they live in Quebec, which asymmetrically favors French speakers [200,201]. Asymmetrical federalism, if not well-managed, may evolve into some kind of identity politics, thereby undermining its original intention [202]. Thus, maintaining asymmetrical federalism requires not only institutional arrangements and power distribution, but also continuous dialogue.

3.5.2. Non-Territorial Autonomy

Non-territorial autonomy (NTA) provides another flexible federal tool: it grants cultural, linguistic, and religious groups the right to self-governance without redrawing territorial boundaries [203,204,205,206,207,208]. This institutional arrangement is particularly suitable for communities whose members are dispersed and cannot easily form clear territorial concentrations [209,210]. Through non-territorial autonomy, these cultural, linguistic, or religious communities can manage their own schools, culture, and language affairs while remaining within the existing unit, thus avoiding territorial disputes and the risk of secession [199,211,212,213]. For some scholars, non-territorial autonomy is indeed conducive to multinational federalism [214].

The language communities in Belgium, which will be mentioned later, are often seen as a model of non-territorial autonomy [180,203,215,216]. The French-speaking and Dutch-speaking (Flemish) communities, as well as the German-speaking community, in the country enjoy autonomy in cultural and educational affairs. In recent years, the discussion on non-territorial autonomy in dealing with ethnic pluralism has attracted more and more attention, especially in managing cross-border migrant communities [217,218].

However, non-territorial autonomy also has its inherent limitations. Some state functions, such as policing, military, immigration, and infrastructure construction, are still difficult to devolve to communities in a non-territorial manner [199,219,220]. This means that non-territorial autonomy is often seen as a complementary rather than an alternative mode to territorial autonomy [207,221,222]. In addition, non-territorial autonomy may also face problems such as ambiguous identity and difficulty in defining membership [199].

3.5.3. Consociationalism

Consociationalism is another power-sharing mechanism that is often used in conjunction with federalism. Federalism provides the institutional structure, while consociationalism, in addition to institutions, also carries the meaning of “norm” [1]. Together, they form an institutional combination for governing fragmented societies [223]. Consociationalism typically has four key characteristics: grand coalition cabinets, mutual veto power over major decisions, proportional representation in public offices, and segmented autonomy that allows cultural communities to retain their own rules [224]. This mechanism is particularly suitable for countries divided by deep ethnic, religious, or linguistic cleavages. In these countries, majority-rule democracy often fails to maintain political stability. Only through negotiation and compromise among the elites of the divided groups, can a fragile protection of pluralism be achieved [1,164,225].

Belgium is especially a well-known example, where its federalization process, including its non-territorial federal arrangements, is the product of institutionalized consociationalism [120,164,226]. Some scholars also point out that the EU, to some extent, has characteristics of consociationalism [226].

In recent years, consociationalism has also attracted attention in post-conflict national reconstruction. For example, the Dayton Agreement in Bosnia and Herzegovina [227], post-war reconstruction in Iraq [228], and the Taif Agreement in Lebanon [229], all partially reflect the principles of consociationalism. However, there are indeed criticisms that this elite-dominated governance model may reinforce ethnic identities, weaken national identity, and suppress civil society [223,230,231].

3.6. Presidential Federalism and Parliamentary Federalism

Another dimension that needs to be mentioned is the coupling of forms of government (presidential or parliamentary) with federalism. This dimension affects the interaction patterns of the executive, legislative and political parties within the federal system.

The United States is usually regarded as the first modern federal country with a typical presidential system. Under this system, the president, as the independently elected executive head, is separate from Congress. They check and balance each other. The dynamics of federal power show a multiple interaction: between the president and Congress, between state governments and the federal government, and between the two parties [30,232]. This system often leads to a more decentralized policy-making process, with a higher possibility of legislative deadlock when there is a divided government [110].

In contrast, Canada and Australia represent the paradigm of parliamentary federalism, where executive power derives from a parliamentary majority. Canada’s federal constitution of 1867 is the first example of parliamentary federalism [233]. Some scholars argue that Canada constitutes a Canadian model with stronger parliamentary and executive coordination, different from the presidential model of the United States [234,235]. In this system, policy formulation and implementation are better coordinated [13,236]. Party discipline is strong, and the policy objectives of the cabinet and the parliamentary majority usually remain consistent. It enables the central government to more efficiently promote federal legislation and budgetary arrangements [237]. However, strong central executive power may also weaken the political power of states [236].

Distinguishing these two types of federalism in perspectives of executive-legislative relations helps understand why federal constitution can produce different consequences of power implementation. For example, presidential federalism tends to emphasize the role of judicial review in resolving federal conflicts. However, parliamentary federalism relies more on the executive head and inter-governmental mechanisms [122].

3.7. Democratic Federalism and Authoritarian Federalism

The relationship between federalism and democracy is also a hot theme in federalism studies. For Burgess and Gagnon, federalism is a democratic principle aimed at maintaining a unified political community while ensuring local participation and autonomy [160]. Other scholar also mention that federalism is not only about institutional design, but also an embodiment of democratic governance concepts, with multi-level governance, citizen participation as its intrinsic mechanisms [238].

From the perspective of comparative politics, some scholars distinguish federalism into democratic federalism and authoritarian federalism [8,239]. Some scholars refer to those systems that merely have a federal decentralization structure in form but are in fact authoritarian as facade federalism [240]. Democratic federalism emphasizes the independence of multi-level governments, electoral competition, and fair judiciary. Authoritarian federalism, on the other hand, retains the external form of a federation but lacks an independent judicial system, free party competition, and effective local autonomy. The federal form thus becomes a tool for the center to consolidate power and distribute resources.

Democratic federalism expands the space for citizen participation. Canadian political philosopher Charles Taylor holds that federal systems decentralize decision-making to local levels, to “allow units to exist which are closer to the people governed” [241] (p. 7). This is particularly suitable for regions with high social heterogeneity, enabling politics to more closely match the diverse needs of society [110,242].

Lower federal levels—such as municipalities and town halls—can serve as platforms for cultivating political leaders, especially from groups previously excluded from political life, like women, young people, and ethnic minorities [243]. These local institutions provide citizens with more accessible avenues for public participation, such as joining grassroots movements, contacting elected officials, and attending public forums [244]. Through these means, federalism promotes more effective political expression and accountability, thus clearly contributing to democracy [245,246,247].

On the other hand, federalism can also pose challenges to democracy. First, federal arrangements may entrench the power base of local elites, enabling them to obstruct social and political reforms. For example, the persistence of racial segregation policies in U.S. history for many years was partly due to opposition from state governments, especially in Mississippi, Alabama, and Arkansas [248,249]. Federal structures can also be exploited as a testing ground for conservative legislation to block democracy—through practices like gerrymandering, strict voter ID laws, reducing early voting, and mass purges of voter rolls [250].

Moreover, the rise of radical federalism poses a new challenge to existing federalism. It attempts to reinterpret constitutional provisions to greatly weaken federal authority and national legal framework. While appropriate decentralization can promote local autonomy, radical decentralization without central coordination can be abused to exacerbate regional inequalities, and thus endanger democracy itself [251,252].

Under authoritarian federalism, federalism may become a tool for the central government to maintain its rule, rather than a carrier of democracy. In the absence of an independent judiciary, media freedom, and a robust civil society, federal structures can be exploited by authoritarian regimes [116,252]. For example, in Russia, the authorities have gradually centralized power under the guise of nominal decentralization through measures such as restricting gubernatorial elections and strengthening fiscal vertical dependency [253]. In countries like Nigeria and Ethiopia, local governments sometimes serve as arenas for ethnic mobilization or resource capture, rather than as guarantors of citizen autonomy [253,254,255].

However, research also shows that even within non-democratic systems, federalism may create institutional frictions and open spaces. Research indicates that fiscal decentralization sometimes provides opportunities for local policy innovation or experimental reforms, even if these opportunities do not immediately lead to democratic transitions [138,256]. Precisely for this reason, non-democratic/authoritarian federalism may both reinforce centralization and become the institutional soil for future democratization.

4. Federalism in Policies

In addition to the discussion of federalism as a political institution and a normative ideal, federalism also interacts with different policy areas, giving rise to research areas such as fiscal federalism, environmental federalism, welfare federalism and health care federalism. This section briefly introduces these specific policy areas of federalism, their practices, and the challenges they face.

4.1. Fiscal Federalism

Fiscal federalism studies the division of financial responsibilities between federal and local governments [257,258,259]. It typically involves stabilization functions (unemployment, inflation), distribution functions (income redistribution), and allocation functions (provision of goods/services). Functions that are universal or cross-regional are generally considered more suitable for the central government; for functions with regional characteristics, sub-national governments are more appropriate [260].

Regarding the distribution of tax revenue, taxes on highly mobile entities (such as value-added tax) are best managed by the central government to avoid a “race to the bottom” and tax spillovers [261,262]. Taxes on less mobile entities are more suitable for state and local governments [260,263,264]. In terms of expenditure responsibilities, defense spending is basically the responsibility of the central government. Local governments usually take charge of more local resident services, but often have to rely on central government fiscal transfers due to fiscal capacity constraints [265,266].

However, the imbalance between revenue and expenditure often becomes a problem in fiscal federalism, leading to inefficiency and irresponsibility [267,268]. Although most countries have established a system of fiscal transfers from the central to the local, whether the distribution of transfers is fair often sparks debate. Moreover, continuous transfers may also weaken the fiscal discipline of local governments in a federal system [269,270].

In addition to fiscal transfers from the central government, direct fiscal decentralization to local governments is another option. Some scholars argue that a certain degree of fiscal decentralization can improve the efficiency of local government public spending [271]. But other scholars point out that, under conditions of political polarization and poor institutional design, excessive decentralization may lead to unsustainable policies [272]. Moreover, the imbalance in economic development among regions also poses challenges to fiscal decentralization, such as those faced by EU member states [273].

4.2. Environmental Federalism

Environmental policy is also an area where central and subnational governments divide power and cooperate within a federal system. Usually, the federal government sets standards, while states are in charge of implementation and make adjustments according to local conditions [274,275].

For example, in the United States, under the Clean Air Act, states devise their own plans to meet National Ambient Air Quality Standards. Similarly, under the Clean Water Act, states take on the responsibility of issuing and enforcing permits [276]. In addition, the National Environmental Policy Act (NEPA) provides an institutional framework for federal-state cooperation. On the other hand, independent exploration by state governments can sometimes, in turn, promote federal legislation. For example, California’s Global Warming Solutions Act (AB 32) has served as a legislative template at the federal level [277].

On the contrary, the Canadian example reflects tensions between the federal and provincial governments on environmental issues. The Canadian government proposed a “carbon pricing” policy to cut carbon emissions, but traditional oil-producing provinces like Alberta opposed it [278]. On the one hand, environmental governance has cross-regional characteristics, and individual states can not thoroughly solve the problem of “negative externalities” [279]. For instance, if one state/province allows high-polluting enterprises, the pollutants may spread to neighboring states. On the other hand, local governments have information on specific industries and can make more reasonable responses [127]. This creates tension between federal-level decision-making and local realities.

In federal-like structures such as the European Union, due to the lack of central-level authority, dealing with environmental issues has to rely more on softer, consultative approaches. Policy incentives and cooperative networks, rather than enforcement, are used more to align the policies of member states [280,281].

4.3. Health Care and Welfare Federalism

Federalism also affects health care and social welfare policies. Usually, federal and state governments adopt a cooperative model to jointly share the responsibilities for social welfare and medical services [282,283]. Similarly to environmental policies, the federal government usually provides a broad framework but encourages state to adapt to local unique conditions [284].

Take the United States as an example. The federal government leads major legislative actions such as medical insurance and assistance, but their implementation is highly dependent on state governments. Some states expand the coverage of Medicaid while others resist. This leads to significant differences in medical services among states [285,286]. In addition, states also play a leading role in physician licensing, drug regulation, and crisis response.

In Canada, although social insurance and pension plans (the Canada Pension Plan, CPP) originated from federal design, provinces are gaining increasing autonomy [284]. For example, Quebec has successfully devolved the responsibility for social programs from the federal level [283]. Quebec also established its own pension system, the Quebec Pension Plan (QPP) [287,288]. These measures not only strengthen the legitimacy of provincial governments in Quebec society but also enhance Quebec’s position on social welfare policies relative to the other nine provinces [289].

However, the impact of social welfare policies under federalism is two-way. On the one hand, states are closer to local preferences and can try appropriate policy approaches. Successful innovations may then be extended to the federal level [290,291]. On the other hand, federalism may lead to unequal treatment of citizens, especially when there are significant differences in the fiscal capabilities of various states [248,292].

For example, due to its weaker economic base, Western Canada faces greater pressure in social welfare compared to other provinces. However, federal-level transfer payments are not sufficient to bridge this gap [293]. In the United States, southern states receive lower public health investments than the national average, exacerbating the vulnerability of relatively poor groups [285,294]. During the COVID-19 period, to some extent, the coordination dilemma in federal countries was also highlighted in the process of medical procurement and material distribution [295].

5. Conclusions

This study comprehensively presents a panoramic view of federalism research. It not only offers a theoretical and empirical overview but also aims to show scholars a set of operational research agendas. It is hoped that readers will use this as a starting point to combine theoretical frameworks with cross-regional and cross-methodological research, thereby filling the geographical and thematic gaps in future studies. In this study, we showed the early forms of federalism, such as the city-state alliances in classical Greece and the confederation of the Iroquois tribes. Next, we introduced the pioneer of early modern federal thought, Johannes Althusius, mentioning his symbiosis and association federal theory, which laid the normative foundation for federalism to resist centralization. We examined the early American constitutional debates between federalist and anti-federalist and how the United States achieved a successful federal design to prevent tyranny of the majority. However, it was this institution-oriented approach that, to some extent, overshadowed Althusius’s normative vision.

We then looked at the various manifestations of federalism: the differences in origin between coming-together federalism and holding-together federalism, the institutional evolution between dual federalism and cooperative federalism, the distinction between decentralization and non-centralization, the innovations of asymmetrical and non-territorial federalism, and the differences between presidential federalism and parliamentary federalism. All of these indicate that federalism has strong plasticity and can be adapted to different backgrounds. Nevertheless, federalism is not without challenges. We also mentioned the operation of federalism in non-democratic and authoritarian systems: it can maintain autonomy through the decentralization of power, but it can also become a tool for authoritarian authorities to manipulate politics.

This study strives to map the entire picture of federalism research, although it has far from exhausted all dimensions in this field. We have to admit that given the limitations of space and the availability of materials, this paper does have a preference for the selection of materials and cases mainly from North America and Europe (especially Belgium, Spain, Switzerland, etc.). Federal or quasi-federal practices in Africa, Latin America, and Asia (such as the federal fiscal mechanisms in Brazil and Mexico, the ethnic federal governance in Nigeria and Ethiopia) have not been deeply discussed in this paper. In future research, it is obvious that there needs to be greater geographical diversity rather than just focusing on Western cases. Follow-up studies can expand the framework shown in this paper through regional thematic studies.

To make the encyclopedic review more academically progressive, based on the research topics already reviewed, this paper proposes several testable propositions for future researchers to consider: (i) Whether non-territorial autonomy (NTA) reduces the risk of secessionist conflicts: In countries with a significant distribution of ethnic differences, has units adopting a non-territorial autonomy system reduced the incidence of ethnic violence? (ii) The coordination ability of federalism in transnational (environmental, health) affairs also deserves more attention. This can be studied using quantitative regression analysis. The measurement indicator can be the existence of coordination mechanisms. (iii) In terms of federalism and democratic resilience, I propose a hypothesis that the protective effect of federalism on democracy depends on the existence of judicial independence and media freedom. To test this hypothesis, interaction-term regression analysis can be used.

Overall, whether as an institution or as a normative theory, the breadth and depth of federalism increasingly demonstrate that this topic is worthy of in-depth study. In an increasingly pluralistic, and even fragmented, world, federalism will continue to provide us with insights on how to balance unity and diversity.