How and why did the first national communities emerge in France, the United States, and Britain? Or in more precise terms: why were political alliances and collective identities reorganized along national lines, replacing estates, tribes, village communities, and other local corporations? Obviously, the first states built on such a national compact were not able to copy this new institutional template from elsewhere. We thus will have to show how networks of alliances and identification were reorganized from within a society. This chapter demonstrates how high levels of state centralization and well-developed networks of voluntary associations lead to encompassing alliance structures and thus to nation building. The case of France will illustrate this trajectory. Alliances and identities will form along ethnic, rather than national, lines if states have less to offer in terms of public goods and political participation and if the relationships between rulers and ruled cannot be organized on the basis of voluntary associations. This is the path of political development that the Ottoman empire traveled down. The resulting political closure and exclusion along ethnic lines can lead to wars both between and within newly formed nation-states, as will be argued in Chapters 4 and 5.

To understand nation building and ethnic closure, this chapter introduces a formal model of domestic political alliance formation. According to this model, actors are endowed with different types and amounts of political and economic resources: political decision-making power, control over taxation, military support, and public goods. They seek to exchange some of their resources with some other actors while excluding yet others from the emerging alliance system. Following the relational argument introduced in the previous chapter, we assume that actor alliances will over time develop a shared identity and sense of mutual loyalty. This model allows identifying the power configurations under which nations, ethnic groups, and other types of alliance systems result from the struggles over the boundaries of belonging.