Federalism Explained: Who Decides What, and at Which Level

Article 114 of the Italian Constitution states that “the Republic is made up of municipalities, provinces, metropolitan cities, regions and the State,” and that these bodies are “autonomous entities with their own statutes, powers and functions according to the principles set out in the Constitution.” Behind that flat list of bodies sits a precise rule for who decides what: the principle of subsidiarity, written into Article 118 — and the same rule that, at a larger scale, is what federalism is really about.

What federalism means, in general

Federalism describes a country where power doesn’t sit in one place: a constitution splits legislative and executive authority between a central government and other levels below it, each with a guaranteed area of financial autonomy. Germany, the United States and Switzerland are textbook cases — two levels of government, both acting directly on citizens, each with powers the other cannot simply take away. Subsidiarity is the working rule inside that split: it decides, task by task, which level actually handles something, starting from the level closest to people and moving up only when a wider scale is genuinely required.

Italy is not one of the textbook federations, but it runs heavily on subsidiarity, and its Constitution spells the rule out in unusual detail.

Vertical subsidiarity: starting from the municipality

Article 118, paragraph 1, of the Italian Constitution states that “administrative functions are attributed to municipalities unless, to ensure their unified exercise, they are conferred upon provinces, metropolitan cities, regions or the State, on the basis of the principles of subsidiarity, differentiation and adequacy.” By default, a municipality holds the function; moving it up a level only happens when keeping it at a small, nearby level would prevent it from being carried out in a unified way.

Paragraph 2 of the same article adds that municipalities, provinces and metropolitan cities hold both their own administrative functions and those assigned to them by national or regional law, according to their respective competencies. It isn’t a fixed list of subjects per level, but a mechanism that switches on whenever a given function calls for it.

Practical example: collecting household waste stays a municipal service in most cases, but planning a treatment plant that serves several municipalities can move up to the regional level, because a single municipality wouldn’t be able to coordinate a wider catchment area on its own.

Anyone who wants the bigger picture of how the Italian state is built, before getting to subsidiarity, can start with the Recap on Italian Constitution: structure, principles, and how it works.

Horizontal subsidiarity: citizens first

Article 118, paragraph 4, of the Italian Constitution asks every level of government, from the State down to municipalities, to “favor the autonomous initiative of citizens, individually or in association, for the performance of activities of general interest, on the basis of the principle of subsidiarity.” Here subsidiarity doesn’t regulate the handover of a function from one level of government to another: it regulates the relationship between institutions and the people they are meant to serve.

A group of parents who organize after-school tutoring on their own, an association that runs a public park, or a committee that cleans up a stretch of coastline are all the kind of initiative Article 118 asks institutions to support, before institutions step in themselves with a direct public service.

Who legislates what: the split under Article 117

Paragraph 1 of Article 117 states that “legislative power is exercised by the State and the regions in compliance with the Constitution, as well as the constraints deriving from EU law and international obligations.” From there, the constitutional text distinguishes three different situations. Some matters remain under the exclusive legislative power of the State: among them, the article names, word for word, “the protection of the environment, ecosystems and cultural heritage.” Others fall under concurrent legislation: “legislative power belongs to the regions, except for setting the fundamental principles, which is reserved to State legislation.” For everything else, a residual rule applies: “legislative power belongs to the regions with regard to any matter not expressly reserved to State legislation.”

This architecture dates back to constitutional law no. 3 of 2001, which rewrote Title V of the Constitution. The dossier from the Italian Chamber of Deputies’ research service describes that reform as the intervention that “substantially rewrote the overall system of relations between the State, regions and local authorities,” and notes that “the principle of loyal cooperation must govern every relationship between the State and the regions.” Anyone curious about how the State itself is organized at the national level, downstream of this division of powers, can find the full picture in the Recap on Italian government structure: which bodies do what.

When the national government can step in for the regions

Article 120, paragraph 2, provides that “the Government can replace bodies of regions, metropolitan cities, provinces and municipalities” in defined cases: failing to comply with international treaties or EU law, a serious threat to public safety, or the need to protect “legal or economic unity” and, in particular, “the essential levels of services connected to civil and social rights.” The same provision adds that these substitute powers must be exercised “in compliance with the principle of subsidiarity and the principle of loyal cooperation”: even when the State steps in for a local authority, the Constitution points back to the same principle that governs the ordinary division of functions.

Article 120, paragraph 1, also sets a limit running the other way, aimed at the regions: they cannot impose duties on goods crossing regional borders, obstruct the free movement of people and goods across the country, or restrict the right to work anywhere in the national territory.

Why isn’t Italy a federal state?

Treccani’s entry on “Federalismo [dir. cost.],” written by Alberto Vespaziani, defines a federal state through a few technical elements: two levels of government that act directly on citizens, held together by a formal, constitutionally fixed division of legislative and executive authority, and by a split of financial resources that leaves each level a genuine area of autonomy. A federal state in the full sense, the entry explains, is the point where the federal principle and complete statehood meet.

Italy doesn’t fit that definition. Treccani’s entry on “Diritto regionale” explains that the Italian system stays a variant of the unitary state: legislative and executive power are split between the different levels of government, but judicial power remains exclusively with the central State. The division of legislative powers just described under Article 117, however broad, never touches the judiciary, which stays a single, national power. The same entry cautions that real-world systems rarely match a pure model, since elements from different models tend to coexist rather than sort neatly into centralized or decentralized. That’s why, in legal scholarship, Italy is often described as a regional state — a descriptive label with no textual anchor in the Constitution itself.

Anyone who wants to see how that separate, always-national judicial power actually works can read the Recap on the Italian legal system: how courts and judges are organized; and anyone comparing this setup with other ways of organizing power can turn to the Recap on types of government: forms of state vs. forms of government.