The dissertation deals with the research question of how the Swiss federal reform 2008 (NFA) has changed vertical fiscal power relations in Switzerland and what can be learned from these findings for institutional design in federations in general. The main part of this cumulative dissertation is composed of four empirical studies, each of them contributing to the overall research question. The first study in chapter 2 takes a macro-perspective and focuses on the impact of the NFA on subnational fiscal autonomy. In the second study in chapter 3, I extend the perspective by taking into account the role of municipalities. Using a cross-cantonal comparison and focusing on the policy area of special schools, I assess the impact of local authorities sitting in the cantonal parliament on the cost distribution formula between the cantons and the municipalities. In the third study in chapter 4, I examine whether the effects found for the particular policy area examined in chapter 3 can be identified throughout all policy areas in Switzerland. Finally, in a fourth empirical study in chapter 5, I include the 1993 Belgian federalisation as a second case to allow for a systematic comparison of the empirical findings. The findings can be summarised as follows: First, there is indeed an effect of the NFA on subnational fiscal power, albeit rather negative, given that the increase of subnational expenditure is not matched by a corresponding increase of revenue. Second, chapters 3 and 4 point to the phenomenon of “state capture from below”, i.e. the efforts of municipalities to shift expenditure to the cantonal level. As chapter 3 shows, the effect of the NFA in the policy area of special schools is contingent on the number of local authorities sitting in the cantonal parliament. Chapter 4 finds empirical evidence for the “state capture from below” beyond individual policy areas. Finally, the comparison with Belgium in chapter 5 leads to the conclusion that the de/centralization of the tax system is an important moderating ...