Scholars have focused heavily on the ability of federalism to both generate and solve territorial tensions, but far less on the key mechanism that produces these contrasting outcomes. This book fills a critical gap in our understanding. It offers us new insights from diverse regions into how federal fiscal arrangements can both punish and reward territories and/or minority groups. -- Tracy Beck Fenwick , Australian National University. This book breaks new ground by examining innovatively the dynamics between fiscal federalism and diversity accommodation - how financial arrangements can either enhance accommodation or exacerbate diversity. The book makes an important contribution to federal studies at a time when federal solutions to diversity challenges are much in demand. -- Nico Steytler , University of the Western Cape This open access book connects two strands of federal studies, fiscal federalism and diversity accommodation, by answering two closely interrelated questions. The first is: to what extent has the need to accommodate diversities determined the evolution of financial relations? The authors answer this question with a thorough investigation of the types of diversity that drive such evolution.

The second question is: to what extent does fiscal federalism affect the accommodation of diversities, by producing institutional solutions that have integrative or disintegrative potential for the federal equilibrium? The book helps establish a theoretical framework for exploring these main themes from different perspectives, including those of law, economics and political science. Francisco Javier Romero Caro is Senior Researcher at Eurac Research's Institute for Comparative Federalism, Italy. Alice Valdesalici is Research Group Leader and Senior Researcher at Eurac Research's Institute for Comparative Federalism, Italy.