States differ regarding the way in which they are organized internally. Almost all, besides having a central government (central administration), are divided into units called districts, provinces, states, departments, or counties and these, in turn, into cities or municipalities. Provinces have greater or lesser autonomy over local matters, depending on the organization of the State.
The type of relationship and degree of power central governments have compared to provinces has been an important political problem for a long time. There are countries in which provinces have very little autonomy; their authority is limited to only providing certain local services. These cases in which everything depends on the central government are known as unitary States. In unitary States, the whole exercise of sovereignty is in the central government. When there is a tendency towards the opposite with the purpose of limiting central power, we speak of decentralization of government functions by means of concessions of territorial autonomy that do not necessarily require a transfer of sovereignty.
But there are also cases of countries whose provinces retain ample powers and the central government acts merely as a coordinating entity. In these cases, individual provinces retain most of their sovereignty. This arrangement is called a confederation and is basically an organic association of sovereign and autonomous entities.
There are some countries, however, in which authority is shared between the central government and the provinces, and where sovereignty is shared in a "federate" structure. Under this system, the central, or federal, government legislates as sovereign on some areas of life while each state maintains power over other areas. In the
The Federation or Union of States occurs when two or more sovereign states agree to give part of their sovereignty to a new entity in which both participate. The federation agreement describes in detail the powers that will be given to the new Federated unit and which ones will be retained by the particular territories. The historical examples are vast and denote an enormous variety of agreements; some of which surrender ample powers and others which surrender less. The
In contrast, a Confederation is a union of sovereign entities that, contrary to a federation, retain a large part of their sovereignty after uniting.
When the thirteen English colonies of
But the most recent historical example of a dramatic and successful case in which powerful national States agreed to limit their individual sovereignties in exchange for a new unit, is the European Union. This began as an economic agreement between
From a theoretical point of view, in all confederations or unions, each unit retains its sovereignty even if it gave part of Its natural powers to a central unit. In other words, entering into a confederation is in itself-as in the case of the European Union-an act of sovereignty. Therefore, each
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