THE problem of finance is the fundamental problem of federalism. This book, which began as a history of intergovernmental financial relations in Canada, Australia, and the United States, quickly developed into a comparative analysis of the problems of federal finance in relation to other problems of twentieth-century federal government, particularly the problem of social legislation. For such an analysis to be useful, however, it is essential to begin with a definition of scope and method. And the first question to be answered is simply this: in what circumstances is it fruitful to make a comparative analysis of political institutions?
It can be said at the outset that for such an analysis to be possible at all the institutions must share some common purpose or function in respect of which they can be compared, and which may be called the ground of comparison. If two institutions have no purpose or function in common there is no ground of comparison, and nothing beyond description can usefully be attempted. The second point is that for a comparative analysis to be interesting and fruitful, the ground of comparison must be capable of being reasonably clearly and precisely stated, and must be of some importance in itself. And this leads to the heart of the difficulty in making international comparisons of political institutions, for very few of them have anything more in common than similar aims, which are usually rather vague and are often more similar in appearance than in reality.
Similarity of aim is sometimes an adequate ground for comparison of particular administrative devices, such as methods of central control of local expenditure or means of supervising recruitment by government agencies. No matter that the methods employed may be quite different, in these and similar cases they can usefully be compared with respect to their efficiency in securing the given aim, since the aim is precise enough for 'efficiency in securing it' to have some meaning. But the institutions which can be studied in this way are limited in number. All too often closer inspection of aims