Regions differ on the degree of autonomy they enjoy and the discretion they have in conducting their own policies. Hence, it is not only worth examining how relationships between regions of a country as well as across countries reflect these differences, but also how relationships between regions and the national government affect their capacity to act and defend their interests. These vertical and horizontal relationships and interactions are structured and shaped by de facto and de jure asymmetries caused by economic and fiscal disparities or cultural heterogeneity. Eventually, such economic, fiscal and cultural differences can lead to federal conflicts. If federations fail to manage such conflicts, e.g. by adapting the federal framework, such disparities might even cause a break-up of the federal state. In many cases, economic, fiscal and cultural diversity leads to claims for more autonomy and, hence, discretion. Therefore, the panel additionally wants to identify incentives and disincentives for regions to surrender or enhance their autonomy, or even seek independence. If autonomy is enhanced, regions gain discretion in conducting their own policies and in defending their own interests. Papers address these issues and, more precisely, answer the following questions:

• How do vertical and horizontal relationships affect regions’ capacity to conduct their own policies and defend their own interests?
• How are conflicts caused by economic, fiscal or cultural diversity managed and how do regions position themselves on this ‘battlefield’?