Federalism is a political and legal institution based on the integration of various levels of government, which implies sharing sovereignties for the sake of national unity. This system is applied in extensive countries like Mexico, the United States, Russia, and Brazil, where the aim is to consolidate cultural, historical, geographical, and ethnic diversity. In this form of organization, each entity retains its sovereignty and the right to separate from the Federation.
According to Retchkiman from the IIE, in federal states, each level of government retains its defense and can separate from the Federation if it wishes. There is a Pact of Adherence to the National Coordination Fiscal System that suspends certain powers of the states in exchange for economic compensation. The discussion on centralization and decentralization reaches all nations, regardless of their government structure.
Federalism has become a relevant topic in political and economic spheres worldwide and has impacted administrative, economic, and institutional matters. Although there are other forms of state organization, such as unitary states and confederations, federalism stands out as a way to decentralize excessive centralism.
BenjamÃn Reitchkiman points out that, although few nations formally adopt federalism, administrative cooperation agreements have been established to enhance fiscal decentralization. However, the dependence on federal transfers remains high in many cases, with few municipalities showing initiative in tax collection.
In short, federalism is proposed as a political solution to political problems, emphasizing the importance of individual differences and collective interests. On the other hand, confederations, more common in previous centuries, were oriented towards particular military or economic purposes, without establishing a new state or national unity, which was also reflected in fiscal, budgetary, and public administration issues.
