Abstract:
As Indonesia is moving from an authoritarian state to a
democratic political system, there is a growing debate
whether it is more suitable for the country to adopt a
federal system in order to make sure that political power
is brought closer to the people in the regions. The paper
argues that the American federal system can be a source
of some important lessons for Indonesia. However, it is
necessary to note that a belief that a federal system may
lead to a more equitable distribution of development
resources should be read as a theoretical statement
rather than an empirical description of reality. After all,
some developing countries which adopt federal system
like Brazil and Nigeria showed no convincing evidence
about a better performance in the national distribution of
development resources
