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This paper forms part of a symposium on Sanford Levinson's Our Undemocratic Constitution. It points out that although almost no large state that is governed democratically is not a federation, there are only about 24 federations in the world and all but four of these antedate the Third Wave of Democratization, which began in 1974. Most new democracies have not found federalism attractive. Yet, for many such countries, devolution (or scaling-down) federalism, in contrast to the scaling-up federalism originally devised in 1787, has great potential to alleviate conflicts in severely divided societies. Many of these are small or medium-sized states. The paper reviews eight ways in which federal institutions can have benign effects on ethnic conflict. In the relatively few cases in which federal arrangements are devised for such purposes, the federal solution comes so late that conflict has already progressed to a seriously disintegrative or violent stage. At that point, federalism is a matter of the central government's yielding a great deal of power to the substate units, usually simply to facilitate the ability of ethnic contestants to live in separate compartments while purporting to inhabit a common state. Federalism is then a substitute for partition, and in some such states the common threat is in danger of dissolution altogether. To achieve many of the benefits of federalism, early action in relation to the timing of the conflict is preferable, yet, for reasons specified in the paper, early action is highly unlikely in most cases.