The growing rate of poverty in most regions; the systemic graft and corruption in government; the strident cry for cultural recognition; and the instability of political systems are just some of the troubles the country is beset and endured. With these lots of problems, federalism is viewed by many as the only hope for a country. It has grown in popularity over the past century, which is largely due to its particular successes throughout the world. However, federalism is not without any defect. This essay will briefly outline the definition of federalism which followed by an detail analysis of both advantages and disadvantages of federalism as well as the impact on business.

The term federalism is used to describe a system of the …show more content…
(Porter, 1990) In Australia, the system of government imposed corporate accountability has been multi-faceted, confused and fragmented. The main reason for this has been the influence of the federal system and of the states' right to impose their own regulatory regimes on business within their own territory. This has meant that the system is fragmented into six (nine if we include the federal and territorial governments) separate regulatory systems. Professor Hilmer (1993) has argued that the multiple Australian business regulatory arrangements have been a burden to business, and have damaged business efficiency, competitiveness, and investment.

Furthermore, the federal system's presence helps keep that state from swerving too far in favor of corporations. It is easier for corporate managers and lawyers to suggest changes on corporate law revision to committee members located near them, rather than trying to contact members of a more remote national body. (Brett, 2004:99)They could largely control state decision-making in corporate law through their lobbying and service on legal commissions, so the state legislators can cater to the wishes of local business.

On the other hand, the fragmentation that often comes with the system provides a refuge for monopolists