Federation is the principle of connecting smaller, partially self-governing units through a central unit that manages shared resources among them and powers over them. It generally seeks to create a multi-layer architecture in which authority lies at the most appropriate level.

Federalism is generally associated with calls for a stronger central authority.

Federation and confederation are sometimes distinguished, wherein federation is a system where sovereignty lies chiefly in the central unit (such as the US federal government), while in a confederation sovereignty is understood to lie with the constiuent units (such as the European Union).

Input: constituent units, central unit, contracts among them

Output: cohesion, multi-layered authority structure

Background

Federated structures have been widespread in various forms of government, as well as in private enterprise. Early examples include the pre-Columbian Haudenosaunee Confederation (or Iroquois Confederacy), followed by post-colonial formations in the Americas such as the United States, Mexico, and Brazil.

In the private sector, cooperative businesses frequently form federations, which are typically second-order co-ops (or nonprofit associations) whose constiuent members are smaller cooperatives or non-cooperative businesses.

Federation may be considered an implementation of the philosophical concept of subsidarity, which holds that power should reside as locally as possible to the relevant context.

Feedback loops

Sensitivities

  • Balance between local governance and economies of scale

Oversights

  • Can exact high costs of governance among autonomous constituent units

Implementations

Communities

  • Cooperative federations, such as Confcooperative in Italy and US “generation and transmission” electric cooperatives
  • Governments in many countries

In fiction:

Tools

  • Fediverse, a set of interoperable federated social networks using software such as Mastodon, GNU Social, and Pleroma
  • Lightning Network, a scalability solution for blockchain systems that dynamically delegates authority to clusters of trusting nodes

Further resources