In a confederal state, ultimate power is vested in the constituent units. This means that each unit has a significant level of autonomy and sovereignty, and the central government's power is limited to what the units agree to delegate to it. The constitution may specify some areas where the central government has authority, but otherwise, the constituent units have the power to make their own laws and policies within their respective territories. This decentralized structure allows for more local control and flexibility, but it also requires a high level of cooperation and coordination between the units to ensure the confederation functions effectively.