Political institutions have been part of humanity since the beginning of societies. Institutions developed according to different organizational performances and shaped what they are today. Institutions have shown us that they are necessary and essential for all societies in the world. We never realize how important and essential they are in our daily lives, but even more so, we never realize how much institutions affect or influence political outcomes. Whether institutions are federalist or centralist, they always vary in the types of outcomes and shortcomings, or whether local governments work better than a federal government, or whether state governments are better. The implications of decentralization for political society are mixed but generally positive, particularly in consideration of democratic principles. Decentralization scholars focus on the capacity and role of decentralization as effective democratic process, economic development and ethnic conflict. Decentralization is seen as an instrument enabling competition and promoting economic growth. Central government is a weaker institution for achieving democracies because central government tends toward uniform policy and where there is a lot of diversity you don't want uniform policies. Some of the downsides of central governments are generally unfriendly to businesses, they weigh on growth because it is difficult to curb and there are no strict financial constraints. On the other hand, a decentralization process increases the efficiency of the democratic process, economic development and tends to avoid ethnic conflicts. Larry Diamond discusses the influence of small states versus large states. He asserts that local governments promote democratic vitality. This helps develop democratic values ​​and improve political stability. In addition, local information and political innovation, through better use of local information and increased political experimentation, and in addition, ethnic conflicts are defused, all conflicts satisfying limited requests. Because decentralization is a good thing, power is concentrated in the hands of the central government. will lead to despotism. Letting each state or local government develop its own policies encourages experimentation, because as each state comes up with its own solutions to problems, a country has the chance to see first-hand which policies work best or if they don't work at all. Overall, state governments are still closer to the people than the national government, so letting state or local governments decide is more democratic and efficient than letting the federal government decide everything..