Federalism allows the national government to influence the budget decisions of state and local governments
Federalism is a hybrid or compound type of government that integrates a central government (the "federal") with provincial, state, cantonal, territorial, and other sub-unit governments to create a single political system. Federalism offers ways for these many groups to work together to handle shared interests, but it also allows for some degree of independence from the central state's institutions.
Federalism is a compromise meant to eliminate the flaws in both systems. In a federal system, the federal and state governments share power. The Constitution states that while some powers are explicitly reserved for state governments, others belong to a central government.
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