In the study of International Relations, the end of cold war marked a turning point, inaugurated a new era, and undoubtedly disclosed the need to puff out and contend with recent set of political and economic practices and developments in international relation. With significant changes that ranges from the un-dermining of state sovereignty and the Westphalian state system to the disappearance of bipolar geopolit-ics, the end of cold war, transcending the usual core categories of the nation-state, blurred the sharp distinction between internal and external causes of national development, and replaced it by a notion of interaction within larger systems. Democratic revival and/or “wave” of democratic transition is men-tioned at the forefront among the fascinating endings of the cold war years. This has, indisputably, con-sequential connotation in the “Third World” in gene ral and sub-Saharan Africa in particular. Neverthe-less, the end of cold war, as well, witnessed the consolidation of global capitalist order that long been contemplated as unfavorable to political and economic advancement of Africa south of the Sahara.
The ideology of ‘neo-liberalism’ with its political com ponent of liberal democracy and its economic compo-nent of free-market/enterprise became the dominant modes of thought and action within the global politi-cal economy. Hence, sub-Saharan African states, which are characterized by the problems of political instability, economic backwardness, ethno-cultural division and political and economic inequality, state building and national consensus, and state weakness and inefficiency found themselves in international position and under international scrutiny and the post cold war democratization has got unprecedented implication. Consequently, with the failure of centralized nation-state regimes and/or institutions, federal political system have been viewed as an alternative to strengthen democratic transitions in ethnically divided states and thereby bring about political and economic change through power sharing and re-gional autonomy. Thus, this thesis has endeavored to look at the interplay of the democratization and federalization in multi-ethnic states of sub-Saharan Africa in a political economy approach, and the post cold war years in a reference to Ethiopia and Nigeria in a comparative analysis. Before a resort to dis-cuss the reinforcement, an attempt is made to briefly discuss and appraise the problematic of the nature of state, and internal and external influences for democratization in the sub-continent. A comparative analysis of Ethiopia and Nigeria is carried out based on their federal constitutional arrangement, fiscal federalism and the party system. To carry out the analysis, the 1995 Ethiopian and the 1999 Nigerian constitutions are used in supplementary with secondary sources. The analysis of thesis found out that there is a reinforcement and interplay of democratization and federalizing ethnically divided states in sub-Saharan Africa, and a federal structuring and restructuring of institutions increases the possibilities for state efficiency, regional autonomy of ethno-cultural groups, power decentralization and political and economic equality and hence strengthens popular democracy.
However, externally sub-Saharan African states are compelled to the ‘neo-liberal’ version o f electoral and elitist democracy that appears inade-quate to redress the inherent political and economic problems in ethnically divided and economically backward states of sub-Saharan Africa. Internally, although the federal system in both Ethiopia and Ni-geria is rightly formalized in the constitution and aims at enhancing democratizing the state and pacify-ing ethnic tension , still there is a kind of power centralization at the center, which encumbered accoun-tability of the government to the mass. The meager power of the regional states, concentration of fiscal power on the federal government, and domination of power by the ruling party at the center led to a dis-juncture between a political superstructure manifested by elitist and electoral democracy and the promis-es of federal political system; regional autonomy, equitable resource distribution, mass empowerment and popular democracy at the base.
