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The concepts of decentralization and devolution are not new phenomena to Sri Lanka. Since Independence (1948), the processes of decentralization and devolution have taken place at a varying pace to address changes in local socio‐economic and political conditions. Nevertheless, effective decentralization, delegation, and devolution of political and administrative authority and responsibility have not yet evolved in Sri Lanka due to lack of political will and bureaucratic support, the dominance of central institutions, inadequate fiscal and human resources devolution, and political clientelism. In turn, lobbying groups and political leaders in the Northern Province of Sri Lanka continuously agitate for more powers through a federal system of government. This paper examines the federal system of government internationally with a focus on its implementation in the South Asia region. This paper argues that in a developing country context, federalism has not produced autonomous state governments and effective governance as expected by various lobbying groups. [ABSTRACT FROM AUTHOR]