A federation and a confederation resemble one another inasmuch as both the words come from the same root; otherwise there is a fundamental difference between the two.
“A confederation,” says Hall, “is a union strictly of independent States which consent to forego permanently a part of their liberty of action for certain specific objects, and they are not so combined under a common government that the latter appears to their exclusion as the international entity.”
A Confederation is an association of sovereign States formed for the purpose of promoting or achieving certain specific objects. They unite on a basis of equality and the most obvious motive for such a union is to gain security and strength in foreign relations and economic matters.
A central organisation is set up, usually consisting of a congress of delegates, who represent the governments of the States composing the Confederation.
The delegates usually vote by States and under instructions from the governments that they represent. The member-States retain their sovereignty and they do not create a new State.
The instrument which creates a Confederation and defines the powers of the central organisation so created, is of the nature of a compact or treaty among sovereign States. It has certain powers, as defined in the treaty, over the member-States, but has nothing to do with the citizens of these States.
Any member of a Confederation may withdraw there from. A confederacy, in the words of Oppenheim, consists of “a number of full sovereign States linked together for the maintenance of their external and internal independence by a recognised international treaty into a union with organs of its own, which are vested with a certain power over the member ‘States’, but not over the citizens of these States”
Confederations have been numerous in the historical development of the State. More recent examples were the old German Confederation from 1815 to 1866, the Swiss Confederacy from 1815 to 1840, and the union of the Thirteen American States under the Articles of Confederation from 1781 to 1789.
A Confederation is similar to a Federation in two respects. Both in a Confederation and a Federation different States associate with one another for certain specific purposes, and in both cases a central authority is established for the realisation of common objects. Beyond this the similarity does not go and the differences between the two appear fundamental.
The most important difference between the two is that the States entering a Confederacy preserve their full independence and sovereignty and that the States entering a Federation lose them. According to the expressive German term, the former is a staatenbund or league of States, and the latter is a bundesstaat or a united State.
Through Federation one State appears in the place of several; through Confederation no such change occurs. A Confederation does not bring a new State into being; it only creates a new relationship between the existing States.
A Federation is created by a Constitution which is legally a law, and which depends upon the consent of the people. A Confederation, on the other hand, is created by an agreement or a compact which is of the nature of an international treaty concluded by the confederating States and, accordingly, it rests upon the consent of the member-States.
A Federation is a permanent union and it is illegal for the units composing it to secede or withdraw there from. But the confederating States may withdraw from the union whenever they desire and when they do so, their action is not illegal, though it may be deemed a violation of international good faith.
If there is armed conflict between the various units of a Federation, as there was once between the Northern and Southern States of America on the question of slavery, it is a civil war. If hostilities break out between two or more confederating units, then, it is an international war and not a civil war.
The national or central government in a Federation is created by the Constitution and its powers are defined therein. The federating units can neither destroy the central government nor modify its powers on their own initiative.
That can only be done by amending the Constitution and according to the prescribed method. But in a Confederation the member-States create the central authority, sometimes called even government, which they can destroy, or widen or narrow its powers.
Control of such an authority or a government over the member-States in a Confederation may be of a shadowy sort. Under the Articles of Confederation, the Congress in the United States could requisition the States for soldiers and money upon a fixed system of quotas and make treaties with foreign countries.
But while the States were bound by the agreement to honour the requisition and comply with the treaties, there were no means of compelling them to do so; the power of the Congress was only recommendatory and not mandatory.
Finally, a Federation deals with the citizens of a federal State; in a Confederation the common organ of authority deals with governments of the member-States; it is a union of States and not of the people. A Confederation has no citizens or subjects to whom its commands can be directly addressed. To sum up:
1. A Federation makes a new State as a result of the union of hitherto sovereign States whereas a Confederation remains an agglomeration of independent and sovereign States.
2. A Federation creates a new one single sovereignty, but in a Confederation there is as much sovereignty as the number of sovereign States composing it.
3. A Federation creates a new nation. It is not so in a Confederation. There are as many nations as States composing a Confederation. Each State remains an international entity.
4. A Federation is a permanent union and is indissoluble. A Confederation is temporary and the member-States can withdraw there from at their will. Confederate authorities have no constitutional power to compel a dissatisfied member to remain within the Confederation.
5. In case of conflict between the various units of a Federation, it is a civil war. But war between the member-States of a Confederation would be an international war.
6. In a Federation there are two sets of government with powers divided between the two as prescribed by the Constitution. In a Confederation every member-State has its own system and machinery of government unrelated to others in any manner. Similarly, every State has its own laws and its own citizenship distinct from others.
7. The statutes and laws in a Federation are made by its legislative assemblies, both central and regional. The rules and regulations which govern a Confederation are the result of the conference of the member-States wherein their nominees participate.
8. A Federation is a union of the people. A Confederation is a union of the States. Both are in the nature of an alliance. But a Federation is a permanent Union whereas a Confederation is a temporary alliance.