Drawing on implications suggested by several recent studies in comparative urban research, the extent to which the structure of intergovernmental relations affects the allocations of public funds within a nation is examined. The focus is on educational policy and determining whether differing degrees of centralization affect the outcomes of the policy process. Five hypotheses were tested with nation-level data for 17 countries in Europe and North America and with subnational data for four federal and four nonfederal systems. A systematic difference was found between the federal and the non-federal systems in policy performance, with little indication that federal systems either equalize or redistribute the aggregate resources of society, perpetuating the regional disparities. While it seems true that the dominant role of the central government in a non-federal system may reduce the magnitude of intra-national variation of education spending, it is nevertheless evidenced that the aggregate allocation of funds to education relative to resource base is highest in the federal nations. Appendices present factor structures for dimensions of industrialization and commercialization for 16 nations, and factor structures for dimensions of industrialization and integration of four non-federal and four federal nations. (Author/KSM)