Sustaining Territorial Pluralism The Political Economy of Institutional Change Karlo Basta Scholars of territorial pluralism generally focus on the impact that institu- tions of autonomy have on the stability and survival prospects of multi- national states.  Put differently, they view the extension of territorially based autonomy to regionally concentrated national, ethnic, or otherwise distinct communities as a causal factor influencing the viability of multinational polities. he debate about the relative merits of territorial pluralism con- tinues in academic and policy circles (Erk and Anderson ). While some authors argue that territorial autonomy fosters stability by addressing con- cerns of minorities (Adeney ; Bermeo ; Stepan ), others claim that it foments instability by, inter alia, entrenching separate political iden- tities and providing ethnic entrepreneurs with the institutional tools that make it easier to secede (Roeder ; Snyder ). In this chapter, I argue that it is difficult to understand the effects of the institutions of territorial autonomy without first comprehending how such institutions evolve. In other words, before considering how territorial pluralism affects the pros- pects for state stability, we must understand the political and social condi- tions that shape the possibilities of territorial autonomy. his chapter represents a small step in this direction. I outline a parsi- monious – and by extension limited – analytical framework for explaining the extent and durability of territorial autonomy in multinational states.  he core argument is as follows: if territorial autonomy impinges on the ability of a state’s central authorities to implement key macroeconomic Chapter 6 Basta_1.indd 148 Basta_1.indd 148 19/09/2014 1:27:12 PM 19/09/2014 1:27:12 PM