The first type of government in America was based primarily on state government. Prior to the signing of the Constitution, America had been made up of thirteen colonies, which had been ruled by England. Following the Revolutionary War, these colonies, although they had formed a league of friendship under the Articles of Confederation, basically governed themselves. They feared a strong central government like the one they lived with under England's rule. However, it was soon discovered that this weak form of state government could not survive and so the Constitution was drafted. The Constitution:

• defines and limits the power of the Federal Government
• defines the relationship between the Federal Government and individual state governments
• guarantees the rights of the citizens of the United States

This time, it was decided that a government system based on federalism would be established. In other words, power is shared between the Federal and state (local) governments. The opposite of this system of government is a centralized government, such as in France and Great Britain, where the Federal Government maintains all power.

Sharing power between the Federal Government and state governments allows for a nice balance between what the Federal and state governments can manage. For example, the Federal Government may set a uniform currency (money) system. Could you imagine having 50 different types of coins, each with a different value? You would need to take along a calculator to go shopping in another state. By setting up a national policy, the system is fair to everyone, and the states do not have to bear the heavy burden of regulating their currency (money).