Ethnic, linguistic, and religious identities have emerged during the past d
ecade as major challenges to the institutional capacity of the modern state
to cope with cultural diversity. As such, multilingualism, which formulate
s a response to this challenge, has emerged as a new focus of empirical res
earch on federalism. This provides a contrast to classic studies of federal
ism, which concentrated on the institutional division of powers between a s
tate and its constituent units. Language plays a double role in this: as a
thin bond for communication and negotiation between political actors, and a
thick system of meanings, carrying the burden of history, religion, cultur
e, ritual, and memory. The article studies this ambivalence of language thr
ough a comparison of India and Switzerland, two quite different cases of re
latively successful accommodation of linguistic diversity and discusses the
constitutional means and policy measures that might enable a modern state
to balance regional diversity and national unity in the face of the multi-e
thnic challenge.