A guaranteed minimum system gets its incentives right, avoiding excessive spending and borrowing at the sub-national level. Citizens across the country get the locally provided goods and services to which they are entitled. And regional governments are able to address local demand for publicly provided services.

Such a system is superior to virtually all others in use today. The beauty of a guaranteed minimum system lies in combining the best of centralization with the best of decentralization while eschewing the downsides of each

This is a lesson from Spain, USA, Canada and Kenya
http://www.theguardian.com/commentisfree/2014/mar/04/spain-economic-failure-federal-system-catalonia