Federalism
Federalism is the constitutional division of governing authority between the national government and the states.
The United States Constitution divides political power in more than one way.
At the national level, legislative, executive, and judicial powers are assigned to different institutions through separation of powers.
Federalism divides political authority vertically—between the national government and the governments of the various states.
The Constitution grants particular powers to the federal government, while the Tenth Amendment states that powers not delegated to the United States, nor prohibited to the states, are reserved to the states or to the people. This division of authority is one of the defining structural features of the American constitutional system.
Dividing Power to Protect Liberty
Federalism helps prevent political power from being concentrated in a single government.
Citizens live simultaneously under state and national governments, each possessing authority within its constitutional sphere. Neither level of government possesses rightful authority over every aspect of political life.
This division creates another structural protection for liberty. The Supreme Court has described federalism as protecting individuals by denying any one government complete authority over all the concerns of public life.
Federalism therefore addresses a problem similar to separation of powers: How can government possess enough power to perform its proper functions without concentrating so much power that liberty becomes insecure?
Separation of powers divides authority within the national government. Federalism divides authority between different levels of government.
Local Self-Government
Federalism also preserves substantial opportunities for political decisions to be made closer to the citizens affected by them.
The states possess governments, legislatures, courts, constitutions, and laws of their own. Because different states face different circumstances and citizens may hold different political judgments, states need not adopt identical policies on every matter left within their authority.
Federalism therefore permits a significant degree of political diversity within a single nation.
This does not mean states possess unlimited power. State governments remain constrained by the United States Constitution, including constitutional protections of individual rights. Nor may states exercise powers the Constitution assigns exclusively to the federal government.
Federalism is therefore not simply state independence. It is a constitutional division of authority.
States as Laboratories
One benefit of this arrangement is the possibility of experimentation.
Justice Louis Brandeis famously observed in his 1932 dissent in New State Ice Co. v. Liebmann that a state can sometimes serve as a “laboratory” by trying a new social or economic policy without imposing that experiment upon the entire nation.
This feature creates opportunities for comparison.
If one state tries a particular approach while another state chooses something different, citizens can observe the consequences of both. Successful policies may be copied. Unsuccessful policies can sometimes be changed without having imposed the same mistake nationwide.
Federalism therefore allows political communities to learn from differences among states.
Competition Among States
Federalism can also create competition among states.
Citizens, businesses, workers, and investment are not permanently fixed in one state. People can compare taxes, laws, economic opportunities, public services, schools, regulations, climate, culture, and many other features when deciding where to live or conduct business.
That mobility can place competitive pressure on state governments.
A state that governs poorly may lose residents, businesses, talent, and capital to states that offer conditions people prefer. Conversely, states that develop attractive institutions or policies may draw people and resources from elsewhere.
Competition does not guarantee good government. States can make poor decisions, and citizens may disagree sharply about which policies are best.
But federalism makes comparison possible. Instead of requiring one political decision to govern the entire nation in every matter, different states can sometimes pursue different approaches while citizens observe the results.
The Key Idea Competition examines more fully how comparison, alternatives, and consequences can create incentives for improvement.
Political Accountability
Federalism can also make responsibility for government action easier to identify.
Citizens should be able to distinguish between powers exercised by their state government and powers exercised by the national government. When those lines remain clear, voters have a better opportunity to know which officials are responsible for particular political decisions.
Why Federalism Matters
Federalism allows Americans to share one national government without requiring every political decision to be made nationally.
It divides political power, preserves meaningful authority in the states, permits differences among political communities, creates opportunities for experimentation and comparison, and provides another constitutional barrier against concentrated governmental power.
Federalism combines national union with local self-government by dividing political authority between the nation and the states.
