There are three basic types of federalism. They are dual federalism, cooperative federalism, and confederation. Some scholars include some other models on the list. The additional types are fiscal federalism, creative federalism, and new federalism.
Explanation:
The main types of federalism are dual federalism and cooperative federalism.
Dual federalism draws on the principle of sharing power between the Federal Government and its entities or states. Another name for this type is Layer cake federalism. In this model, the Federal Government has more power than the individual states. Dual federalism is a conservative form of federalism. The government usually dictates the policies to its entities. All the rights of the government derive from the Constitution.
The second type of federalism is Cooperative federalism. In this type, the powers of a government and its states are equal. This form of federalism is more liberal than the first one. The Federal Government has less control over its entities, which have more opportunities to express their will and establish the rules. The main problem of this type of federalism is inability of the government and the states to come to a compromise while making important decisions.
Confederation is the third type of federalism. This type is the most liberal one out of the three basic types. In this form of federalism, states are separate and have powers to implement their own decisions. They cooperate when it comes to the issues, which involve all of them. The central power is weaker than in the first two types.
The additional types of federalism are more complex than the basic ones.
Creative Federalism gives more power to the Federal Government by providing it with a right to control all the statewide programs. This type of federalism was dominant during the Lyndon B. Johnson Administration. The main power belongs to the government, which decides what the states need and how to provide them with the necessary services. In the case of Creative Federalism, the government and its states work together to achieve their common goals and implement their plans.
New Federalism is a type of federalism, which appeared in the days of the Ronald Reagan Administration. Another name for this type is Marble Cake Federalism. It gives more power to the states than the Federal Government. They can make any decisions considering issues, which the Constitution does not indicate.
This type of federalism represents a mixture of its basic types. The main idea of New Federalism is that both the government and the states have their rights. The purpose of this form of federalism is to provide the state entities with individual rights and make them equal to the government. Other powers belong to the states.
Fiscal federalism is the type of federalism, in which the only power is money. The government has all the rights as it is responsible for the country’s Treasury. It solves the problems of the country by efficiently distributing income and resources. In the case of Fiscal Federalism, the government’s main task is to maintain economic stability.
States and local governments are responsible only for the allocation of their resources. Fiscal Federalism benefits from administrative costs reduction, competition among its subdivisions, and the citizens, who have more influence on the governmental processes. However, there are some disadvantages in this type of federalism.
They mostly relate to the independence of states from the central government in comparison with other models, and more personal power and opportunities for people, who can choose a place for residence at will.