Centralized Government

What is a Centralized Government?

Definition: A centralized form of government is one in which all power is held by a single authority or by a group of people. Regional or local leaders are appointed by the central authority and they can usually be removed if they do not abide by the orders issued by the government.

What does Centralized Government mean?

A centralized form of government is normally associated with authoritarianism and a lack of freedom for the general population. This form of government can have implications on the social, political, and economic lives of the country’s population.

On the social front, there could be restrictions imposed on individual freedom. Certain types of books and literature could be banned and individuals could be barred from practicing a religion of their choice.

If the central government dictates economic matters, there could be a negative impact on the production of goods and services, Market forces may not be allowed to determine the allocation of resources. Instead, this decision could be made by a central authority. This could lead to misallocation of the factors of production.

Many centralized governments do not allow their citizens an adequate level of political freedom. This can result in a lack of accountability from local leaders.

Example of Centralized Government

The Democratic People’s Republic of Korea, which is commonly known as North Korea, has a centralized form of government. The political and economic decisions in the country are made by a centralized authority.

The country’s economy faces chronic shortages and its factories suffer from years of underinvestment. According to the CIA World Factbook, North Korea’s “… Industrial and power outputs have stagnated for years at a fraction of pre-1990 levels.”

A centralized form of government can be contrasted with a federal system of government. This is the system followed in the United States. Under federalism, powers are divided between the national (federal) government and the state and local governments. Each level of government has authority over certain areas.

There are many advantages to federalism with the chief being that individuals have greater freedom to choose their political representatives. However, the federal system can be more cumbersome and there could be delays in implementing decisions because several levels of government could be involved.


A centralized form of government keeps political and economic power with itself. Regional and local authorities have a lower degree of autonomy. This system of government allows for quicker decision-making, but can also restrict the freedom that a country’s citizens enjoy.