Federal and Unitary Systems

The difference comes down to where constitutional authority actually lives. In a federal system, like Mexico's, the constitution itself divides power between the national government and the states. Mexican states have their own real authority over things like local infrastructure, policing, and education, and the national government cannot simply strip that authority away without changing the constitution. In a unitary system, like China's, the constitution vests authority in the national government alone. Beijing can let provinces run schools or set local rules, but it does so by delegation, not by constitutional guarantee, and it can pull that power back whenever it wants.

This is why a school rule gets set locally in Nigeria, a federal state, but in Beijing for China, a unitary one. Nigerian states hold constitutional authority the federal government has to respect; Chinese provinces administer what the center decides. The common misconception is treating unitary as meaning no regional decision-making at all. Unitary states delegate constantly, for efficiency, but delegation is revocable. Federalism is defined by the source of the authority, not by how much day-to-day decision-making actually happens locally.

This distinction connects directly to how money moves through a system. Since unitary governments control the purse strings and the constitutional authority, they can tighten or loosen regional autonomy just by changing funding or administrative rules. Federal regional governments, because their authority is constitutionally protected, can resist central pressure even when money is scarce, though heavy financial dependence on the center can still squeeze their independence in practice.