In the nineteenth and twentieth centuries, federations became a widely used constitutional form. They were rare before the nineteenth century and it may be that they will become less attractive in the twenty‐first century. But for now they are well approved. And this is surprising because this era has also been an era of nationalism when the nation‐state, the sovereign political organization of the folk, is also well approved. These two forms are in some ways contradictory: nation‐states derive from, justify (...) and separate out a single ethnic group, while federations may – and often do – bring together political units with different ethnic bases. So a difficult problem for interpreting federalism is to explain the modern approval of this pragmatic, instrumental constitution in an era that embraces simultaneously the emotional and often irrational loyalties of nationalism. (shrink)

All our previous political experience, and especially, of course, the experience of Eastern Europe and Central Asia, offers little hope that democracy can coexist with the centralized allocation of economic resources. Indeed, simple observation suggests that a market economy with private property rights is a necessary, although not sufficient, condition for the existence of a democratic political regime. And this accords fully with the political theory of liberalism, which emphasizes that private rights, both civil and economic, be protected and secure. (...) At the same time, our previous experience also indicates that market economies are more successful than centrally planned economies not only in producing, but also in distributing, both private and collective goods. This economic experienee is supported by neoclassical economic theory, which treats clearly defined and secure rights to private property as essential to a market economy. (shrink)