Sovereignty can be divided between a central government and regional units. Federalism is the constitutional arrangement that does so, assigning some powers exclusively to each level and sometimes sharing others.

Classic federations include the United States, Canada, Germany, and Australia. Regional governments typically control education, policing, and local infrastructure, while the center handles defense, currency, and foreign affairs. Constitutions and courts umpire disputes over the boundary. Fiscal transfers and shared programs create ongoing interdependence.

Federalism accommodates diversity and limits the concentration of power. It can also produce duplication, inequality across regions, and complex accountability. Political parties and social movements often organize at both levels, creating multi-layered competition. Reform of federal arrangements is usually difficult because it requires consent from the units whose powers would change.

• Division of power between center and regions
• Each level has constitutionally protected authority
• Accommodates diversity and checks centralization
• Generates intergovernmental negotiation