Introduction

The Distribution of power is an essential feature of federalism. The object for

which a federal State is formed involves a division of authority between the National
government and the separate states, the tendency of federalism to limit on every side
the action of the government and to split up the strength of the state among coordinate and independent authorities is especially noticeable, because it forms the
essential distinction between a federal system and a unitary system of Government.
Federalism, it is universally acknowledged, has many virtues. Federal governance
promotes efficiency, both economic and political. Federalism is considered efficient from
the political angle as well because of the facility it provides for a heterogeneous
population to come together under the banner of one nation and acquire strength from
unity while allowing the constituents to retain their identity and autonomy over a wide
area of public life. A well designed, and more important, well functioning system of
federal governance, by virtue of its manifold benefits, plays a key role in promoting the
stability and prosperity of nations as the heights attained in development by the leading
federations of the world USA, Canada, Australia and Switzerland ---demonstrate .On the
other hand, unless carefully crafted, federal systems do not endure as evidenced by the
disintegration of many of the federal formations that came into being in the last century,
such as Soviet Russia, Yugoslavia, Czechoslovakia and Rhodesia .The art of federalism
lies in designing institutions with appropriate assignment of powers and functions among
different orders of government and rules to regulate their relationship especially in the

fiscal arena that can strike the right balance among different objectives and resolve
tensions.

The definition of federalism as given in the discussion at the Berne conference of 2011
hosted by the World Bank, U.S. Institute for Peace, and the Swiss FederalDepartment of
Foreign Affairs is as follows,