Fiscal Federalism and Diversity Accommodation in Multilevel States: A Comparative Outlook. By Francisco J.R. Caro & Alice Valdesalici

Abstract

This volume, part of the Federalism and Internal Conflicts series, examines the critical role of fiscal federalism in the constitutional design of multilevel states, particularly as a tool for accommodating diversity and resolving internal conflicts. The book argues that the financial arrangements between central and sub-national governments are key to the success of federal systems. The collection offers a comparative outlook on how different multilevel states—such as Canada, Australia, Spain, and the United Kingdom—utilize financial mechanisms like revenue sharing, equalization transfers, and sub-national taxing powers to manage territorial and cultural diversity. It explores the interplay between asymmetric arrangements and fiscal relations, recognizing that federalism itself is a mechanism for conflict resolution in contexts marked by ethnic, cultural, linguistic, and identity disputes. The overall aim is to assess the extent to which fiscal tools can support effective governance and political stability while addressing issues like secessionism, separatism, and power-sharing.

Keywords. Fiscal Federalism; Multilevel States; Asymmetric Arrangements; Internal Conflicts; Conflict Resolution; Comparative Federalism.

JEL. D74; H71; H72; H77; P52.