ContentsFederation is a system of politics comprising of government’s local units like regional, provisional, state and municipal units and also, a national government that is responsible for making final decisions concerning some of the activities of the government whose existence is protected exceptionally (Radin, (2011).At least every nation worldwide has these local units to make it easier to manage the administration function of the state through decentralization. For a government to be federal, these local units need to exist independently from the national government preferences such that they can make decisions on some of the matters except national government preferences. Some of these nations include the United States of America, Canada, India, and Germany among the other countries.This paper presents the details on two state differences regarding policy differences being compared in the States of America and states of Texas. It is the role of the state of a nation to formulate policies concerning things like the welfare of the society, education for the public, enforcement of the law, justice on criminal cases, hospitals and healthcare, the safety of roads and management of water and sanitation. These matters and much more are detailed in the state’s constitutions that demand attention on their rights. How these issues are addressed in the law, differ from one country to another.This diversifies the independence of their matters. The different policies constructed by each state address their own needs locally, and that is why each system should best fit the citizens of that nation (Hawkesworth & Kogan, 2008). In some cases, some states formulate policies that become successfully implemented to the extent that other countries can copy them. These favorable policies are thereby performed in one of the states before they are copied by the rest of the interested states or a federal government. Some of these procedures that can be replicated include reforms of health care, reforms on welfare and education matters among other policies.When a state or a federal government decides to adopt a policy from another country, this comes with a cost as well as the state has to incur some charge while trying to bring the change to their citizens who are the policy implementers.These citizens end up being affected by the change depending on their areas of residence in that state. An example of this occurred when Obama care in American countries decided to expand Medicare for the provision of insurance on health to those poor people working. Other states had to copy this policy because it seemed to work well in the U.S” however, others did not. Those that copied include the states of California and among those who did not reproduce are the states of Texas which in this context has policies that are different from those of the U.S.In American states, low-income earners qualify for benefits of Medicare whereas in the states of Texas do not. In addition to this, citizens in the United States convicted of crimes are subjected to a penalty of death which is a very different case in the states of Texas. These policy differences are somewhat beneficial as it means that people have to pay for the equality price since all the states cannot be similar.This state’s variations in policy differences bring forth two values in a competition that is the value of equality and that of participation. Besides, this gives the stages the opportunity to have a designed policy different from those of others like such policies of health care, education, justice on crimes and many more. This makes it possible to treat citizens in every state differently concerning jurisdiction so as the equality cost can be felt.Policy differences make a state independent which is highly encouraged to have separate decisions. Also, this allows inputs in participation on matters to do with how schools should be governed, where roads should be constructed, how to set policies on criminal justice and much more. Thus, people cannot have more participation on state’s matters with less equality and vice versa. People, therefore, need to feel this difference for them to participate fully in their state. In this case citizens in the U.S and Texas participate differently unlike when Texas had just to copy what the U.S was doing.Having different policies for states also affect the facilitation of political activity mobilization. This means that average citizens are more likely to involve themselves in political activities of their state if they feel a chance reasonably exists to produce an effect practically. These possibilities of having practical implications are of high impact where elected officials are more and also bodies of independent government like in the United States where each has relatively a small constituency compared to Texas where elected officials are few, most of who have the nation included as a whole for the constituency.In other words, the existence of a federal system of government lowers the cost of organizing political activities because of authority decentralization, compared to having a unitary system of government that raises the cost of assembling political activities like in Texas where the authority is centralized because of including the whole nation as a constituency. This explains why the United States decided to have their policies to give opportunities to citizens to participate politically on those small constituencies. The United States initiates legislation forms by a provision of the same whereas Texas has to use the referendum.The United States gives voters the opportunity to participate in putting measures concerning their legislation and sometimes on the amendment of the constitution directly when they get signatures that are enough of a petition. On the other hand, referendum allows voters to object the measures adopted by their legislature when the state’s constitution gives orders of some legislations like tax increment, and all people should subject to that referendum whether the government likes it or not. The recall is procedural also, and this has affected more than 20 states not only in this where voters have authority to remove an official elected from the office. When enough signatures are attained for such a petition, that official must leave the office.The federal constitution guarantees existence of the state and thus there is no state that can be divided without the consent of the federal constitution. It is stated that each of the states should have not more than two senate representatives and also each state has the assurance of a government that is of a republican form and other reserved powers for the state. Many states are fond of increasing taxes so quickly or run fiscal deficits in the events when they experience unexpected shortfall on revenue due to the employment of wide varieties of financial institutions in the design to put constraints on taxes and expenditures from the policies of the states. To account for this, on fiscal institutions, two techniques such as fixed effects and instrumental variables are used.Fixed effects are those that are for use within the variation of the state over time in fiscal institutions to control the state’s characteristics that are not observed and maybe the essential determinants of budgetary institutions (Wilson et al., 2009). An instrumental variable is a technique that uses variations to estimate the determinants of fiscal institutions adoption across states. Some of the variables like the difficulty of amending the constitution of state should not have a direct impact on the budgetary outcomes or the economy. This means that fiscal institutions are endogenous and so the maker of the policy should put into consideration the difference between the states with these institutions and those without.It is because of policy differences people are treated differently in every state. The citizens should thereby encourage those policies that favor their economy and them in person and also that system which allows them to participate in the decision making the process of the state’s government. Those living in Texas are thereby treated differently from those in the united states because of those policy differences.Hawkesworth, M., & Kogan, M. (2008). Encyclopedia of Government and Politics. Washington: Watford.Radin, B. A. (2011). Federalism,Political Structure and Public Policy in the United Stats and Canada. New York: Rockfeller College.Wilson, J. Q., Dilulio, J. J., & Levendusky, M. S. (2009). American Government:Institutions and Policies,Brief Version. Albany: Cengage.