Most things are easier to do if you have lots of money, and that includes managing intergovernmental relations. Every country has a long-running debate about how powers and responsibilities should be allocated across levels of governmentsödebates between centralists and localists, between advocates of regional distinctiveness and advocates of shared citizenship rights, between substate and state nationalists. The tensions and conflicts they identify and embody can often be left in the realm of the political if there is enough money to satisfy essential demands of every group. But what happens when the money runs out? This question is pressing as a current policy issue given the economic conditions of 2009, and as a challenge to the very different and incompatible kinds of economic, policy, and legal reasoning that jostle in the field of comparative territorial politics. (1) Policy making`in hard times' is a particularly good test of theories of policy making because it accentuates the difficulties of choices and raises the stakes for politicians (Gourevitch, 1986). My basic argument is that the crisis shows us how territorial political institutions channel fiscal pressure on the welfare state in patterned and understandable ways. Decisions about fiscal structures and forms of decentralization, often taken under very different conditions in the past, shape the vulnerability of different groups and governments to the crisis today. We can expect, further, that the interaction of