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The book examines how institutions of multi-ethnic states have been designed to accommodate ethnic diversity while at the same time maintaining national unity. It locates institutional responses to the challenges of ethnic diversity within the context of a federal arrangement. It examines how a federal arrangement has been used to reconcile the conflicting pressures of the demand for the recognition of distinctive identities, on the one hand, and the promotion of political and territorial integrity, on the other. It uses South Africa and Ethiopia as case studies as the two federal systems provide a contrasting approach to issues of ethnic diversity.