Federal Bargaining

In framing a government which is to be administered by men over men, the great difficulty lies in this: You must first enable the government to control the governed; and in the next place, oblige it to control itself. Madison, Federalist 51 The essential characteristic of a federal system is a division of powers between two levels of government, each supreme in some areas of policy making … [and] what a federal system does need for successful operation is some means of resolving conflict between the two levels. Lutz 1988: 64–5 [A]mbitious encroachments of the federal government on the authority of the State governments would not excite the opposition of a single State, or of a few States only. They would be signals of general alarm. Every government would espouse a common cause. A correspondence would be opened. Plans of resistance would be concerted. Madison, Federalist 46 In the Russian case, a bargaining model is not just analytically powerful, but also descriptively accurate. Solnick 1995: 55 The decision to form or reform a federation is an explicit attempt to confront two problems commonly associated with collective action – free-riding and reaching agreements on the allocation of the benefits and costs of public-goods provision and the regulation of externalities. If we turn to the general literature on collective action, however, it is the first of these problems that seems to receive the most attention.