 Federations may facilitate efficient preference maximization more generally, as formalized in the literature on economic and fiscal federalism—though many such arguments support decentralization rather than federalism proper. Research on ‘fiscal federalism’ addresses the optimal allocation of authority, typically recommending central redistribution but local provision of public goods. Federal arrangements may allow more optimal matching of the authority to create public goods to specific affected subsets of the populations. If individuals’ preferences vary systematically by territory according to external or internal parameters such as geography or shared tastes and values, federal—or decentralized—arrangements that allow local variation may be well suited for several reasons. Local decisions prevent overload of centralised decision-making, and local decision-makers may also have a better grasp of affected preferences and alternatives, making for better service than would be provided by a central government that tends to ignore local preference variations (Smith 1776, 680). Granting powers to population subsets that share preferences regarding public services may also increase efficiency by allowing these subsets to create such ‘internalities’ and ‘club goods’ at costs borne only by them (Musgrave 1959, 179–80, Olson 1969, Oates’ 1972 ‘Decentralization Theorem’).