The recent interest of political philosophers in distributive justice in federal contexts has been channeled within the nation-state paradigm of justice, which presents the state as a re-distributive agent. In this paper, I argue that the re-distributive picture is wrong, especially in federal contexts, on the basis that it is based on the principle of justice that necessarily divides federal associations into winners and losers. Instead, I propose a conception of governmental agencies as producers and providers of public goods, not just re-distributors of wealth per se, which is based on the principle of efficiency. The advantage of adopting the principle of efficiency and the ‘public-goods’ model of government is that it preserves traditional ‘win-win’ arguments for federalism (security and economic free-trade), while favoring a just division of competences between the spheres of distinct but interdependent social policies and shared ventures of public goods’ production and enjoyment.