Decline has long been a central concern of international relations scholarship, but analysts have only recently begun to investigate whether a change in international status influences a state's domestic politics. A new theoretical framework for understanding the domestic political consequences of relative national decline posits that eroding national status activates two sets of social psychological dynamics that contribute to domestic conflict inside declining states. First, eroding state status prompts some groups to strengthen their commitment to the state's status and dominant national identity, at the same time as it prompts other groups to disidentify from the state. Second, eroding status produces incentives for substate actors to derogate and scapegoat one another. These dynamics are particularly likely to contribute to center-periphery conflict in multinational states after instances of acute status loss. The plausibility of the argument is demonstrated by showing how the erosion of Spain's status (especially because of military failure in the 1898 Spanish-American War and the subsequent loss of its last colonies in the Americas) intensified domestic conflict in Spain during the first decades of the twentieth century. Findings indicate that decline may actually exacerbate domestic conflict, making it more difficult for states to adopt appropriate reforms.