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Understanding the Multinational Game: Toward a Theory of Asymmetrical Federalism

This article presents a baseline theory of asymmetrical federalism in multinational states. Two arguments building on a game-theoretic foundation link central and regional elites’ strategic choices to questions of federal stability. The first argument concerns the creation of asymmetrical institutions. In a confrontation game between the center and national minorities credibly threatening to exit the framework, the center’s decision to grant asymmetrical autonomy ensures mutual cooperation. Yet by extending the level of autonomy for minority regions, federal asymmetry creates a third player, the nonadvantaged regions. Consequently, the second argument models asymmetrical federalism as a “nested game” where events in the ethnonational arena determine the payoffs in the federal arena. Asymmetrical federal rules turn out to be inherently unstable from a perspective that takes all actors in all arenas into account. A narrative of the development of Russian federalism exemplifies the theory.