This study provides a comparative analysis of revenue allocation frameworks in Nigeria, Malaysia, and Brazil, with specific attention to the mechanisms of vertical (between levels of government) and horizontal (among regions or states) revenue distribution. Using a qualitative, descriptive research design, the paper explores the structure, policy rationale, and operational outcomes of revenue allocation systems in these three federal nations. It assesses how each country addresses issues of fiscal equity, resource control, and intergovernmental balance through their respective allocation formulas.

The study identifies significant differences in the principles guiding revenue sharing, such as population size, geographic needs, natural resource endowment, and development indices. In Nigeria, persistent tensions over the derivation principle and federal dominance in revenue control pose significant challenges to equity and stability. Malaysia, by contrast, emphasizes negotiated allocations and development-focused transfers, while Brazil incorporates constitutional guarantees and fiscal equalization mechanisms to balance disparities among its federative units.

Common challenges identified across the three countries include political interference, lack of transparency, regional inequalities, and inefficiencies in intergovernmental coordination. These issues often undermine the potential of revenue allocation systems to promote inclusive development and fiscal sustainability.

The paper argues that optimizing revenue allocation practices requires a blend of equity, efficiency, and adaptability to evolving economic and political contexts. Drawing on cross-country insights, it recommends that Nigeria, in particular, adopt more transparent and needs-based horizontal allocation metrics, improve stakeholder participation, and institutionalize regular reviews of the allocation formula to reflect current realities.

Overall, the findings offer valuable lessons for policy reform in federal systems, particularly in promoting balanced development, reducing fiscal conflicts, and enhancing intergovernmental cooperation through equitable revenue sharing.