ABSTRACT
This chapter reviews the theoretical argument of Geoffrey Garrett and Peter Lange regarding the institutions able to mediate between the societal preferences resulting from internationalization and the policy as well as institutional changes adopted by governments. It details two tenets of Garrett and Lange's model, namely the way the interests of domestic actors line up in response to economic globalization, and the veto player theory. The chapter discusses the model's direct implications for the comparison between the German and Canadian federations. It deals with defining the crucial concept of federalism. Through tracing the process of institutional adjustment the domestic sources of cross-country variations and the extent to which public sector functions have been supranationalized can be explored. The cultural impact can be operationalized as the difference between the continental European corporatists versus the North American pluralist view concerning the role of 'the state' in 'the market'.
