Federalism, as a constitutional concept underlying the appropriate distribution of powers among levels of government, has responded in understandable ways to long-term trends in economics, political organization, and political values. Those factors have favored increasing centralization through most of the twentieth century, which is reflected in both judicial doctrine and governmental practice. However, changing conceptions of the political economy and the political regime have created a new structual dynamic that favors a less centralized version of federalism. The article examines the structural foundations of the movement toward centralization and the modern countertrends to that movement which have fostered a move toward decentralization. Such developments indicate that federalism not meaningless as a constitutional concept. Neither, however, is it static nor a function of legal doctrine. Federalism is instead a fluid concept operating within broad limits and is responsive to larger political and social changes.