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Federalism is sometimes said to be an unstable halfway house between unified national government and an alliance among separate sovereign states. This idea can be traced to a Hobbesian conception of the state, according to which sovereignty must ultimately be indivisible: either national institutions retain the authority to make decisions or they do not. Genuine federal arrangements are unstable under this perspective. The notion of indivisible sovereignty has a powerful hold on our view of politics, but we think it is limited, most importantly by its conflation of the question of where ultimate authority resides with the question of where state power is actually exerted. While the answer to the first question is obviously significant, economic and sociological conceptions of politics suggest that the answer to the second may tell much more about the nature of a polity.

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