Abstract
The accommodation of territorial diversity is one of the biggest challenges that complex societies must face. Today, many states encounter a loss of solidarity resulting in intergovernmental conflicts that in certain cases also spark secessionist claims. Multilevel government (either in federal or regional form) plays a key role in managing diversity and reducing the risk of secession. This has led to decentralization being presented by some scholars as the antidote that would counter secessionist/nationalist movements (Kymlicka 2001), though contrasting views spice up the debate (Sorens 2015). Moreover, history has not proven any one of these theories. Although conflicts and secessionism arise from multiple factors, traditionally, the literature on territorial accommodation has predominantly focused on other aspects of the federal model such as the recognition of national identities. The study of fiscal instruments and financial relations has been left aside, despite the fact that the latter have a critical role in this respect (Sorens 2015). Along the same line, fiscal federalism has been analyzed by paying attention to matters such as the allocation of financial resources (Anderson 2010) or the functioning of the financial relations among different levels of government (Boadway and Shah 2009; Schnabel 2020) but without drawing much interest from the literature on nationalism and minority accommodation.