The German federal state is a complex entity. It consists of a central Federal Government and 16 federal states. The Basic Law lays out in great detail which issues fall within the ambit of the Federal Government and which devolve to the federal states. As such the federal system in Germany is similar to that of other federal countries. Public life in Germany is predominantly based on central laws. In accordance with the principle of subsidiarity citizens, on the other hand, deal almost exclusively with state and local authorities acting on behalf of the federal states. The reason for this is the aim of the Basic Law to combine the advantages of a unified state with those of a federal state. In everyday life citizens of other countries have far more frequent dealings with representatives of central government.

The Basic Law stipulates that it be possible to compare living conditions throughout Germany. Essentially these are determined by economic and social policy. For this reason central laws mainly regulate this particular field. To this extent the German federal state resembles a centralized state. Nonetheless it is the federal states that control the major part of pan-state administration. This means that federalist elements dominate the state administrative systems. First, as is typical of a federal state, its own administrative system enforces the laws that apply in that particular state. In addition they also execute most central laws, which is untypical of federal state systems. As such, formulations such as “unitarian” are used to characterize the German federal state.

There are three pan-state functions that the individual federal states exercise on their own: schooling (to a large extent tertiary education, too), internal security (including policing) as well as the organization of local self-government. Thanks to the wide-ranging rights pertaining to guaranteed participation they enjoy in the Bundesrat, the federal states receive a form of compensation for the fact that central government is the primary body determining legislation.