Here are some key challenges faced by federal countries:
Central versus regional power struggles - Federalism divides governing power between central government and regional states/provinces. This can lead to conflicts over jurisdiction, resources, and authority. For example, in India there are frequent tensions between the central government and states over policies and resource allocation.
Complex policymaking - With multiple levels of government, policymaking can become complicated through lack of coordination. For example, the response to Covid-19 in countries like the US and Brazil was hampered by differences between federal and state policies.
Uneven development - Economically stronger regions may resent redistribution to weaker areas, causing tensions. For example, in Italy there are long-standing divisions between the more industrial north and less developed south.
Threats to national unity - Federal structures that empower regions can sometimes fuel separatism. For example, independence movements in Catalonia (Spain), Quebec (Canada) and Scotland (UK) are challenging national unity.
Weak economic integration - Overlapping regulations between the federal and state/provincial governments can make business activity cumbersome. For example, Canada's inter-provincial trade barriers have undermined economic integration.
Inefficiencies and waste - Overlaps in jurisdiction and duplication of functions between different levels of government can result in inefficient use of resources. For example, Mexico's health system has faced service delivery challenges due to fragmentation.
In summary, federalism poses inherent governance challenges that require careful balancing of competing interests and cooperative policymaking to manage effectively. The evidence highlights how countries around the world struggle to fully leverage the benefits of federalism.