The Price of Federalism
What is the price of federalism? Does it result in governmental interconnections that are too complex? Does it create overlapping responsibilities? Does it perpetuate social inequalities? Does it stifle economic growth?
To answer these questions, Paul Peterson sets forth two theories of federalism: functional and legislative. Functional theory is optimistic. It says that each level of the federal system is well designed to carry out the tasks for which it is mainly responsible. State and local governments assume responsibility for their area's physical and social development; the national government cares for the needy and reduces economic inequities. Legislative theory, in contrast, is pessimistic: it says that national political leaders, responding to electoral pressures, misuse their power. They shift unpopular burdens to lower levels of government while spending national dollars on popular government programs for which they can claim credit.
Both theories are used to explain different aspects of American federalism. Legislative theory explains why federal grants have never been used to equalize public services. Elected officials cannot easily justify to their constituents a vote to shift funds away from the geographic area they represent. The overall direction that American federalism has taken in recent years is better explained by functional theory. As the costs of transportation and communication have declined, labor and capital have become increasingly mobile, placing states and localities in greater competition with one another. State and local governments are responding to these changes by overlooking the needs of the poor, focusing instead on economic development. As a further consequence, older, big cities of the Rust Belt, inefficient in their operations and burdened by social responsibilities, are losing jobs and population to the suburban communities that surround them.
Peterson recommends that the national government adopt policies that take into account the economic realities identified by functional theory. The national government should give states and localities responsibility for most transportation, education, crime control, and other basic governmental programs. Welfare, food stamps, the delivery of medical services, and other social policies should become the primary responsibility of the national government.
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The Evolution of Modern Federalism
The 1991 Fiscal Crisis
The Price of Early Federalism
The Rise of Modern Federalism
The Contemporary Price of Federalism
Functional and Legislative Theories of Federalism
Locus of the Developmental Function
Slowdown in Economic Growth
Changing Perceptions of the Poor
Politics Turns Conservative
States Offset Federal Increases
The Welfare Magnet
The Future of State Welfare Policy
National Grants Is Equity Possible?
National Determination of State Role
Locus of the Redistributive Function
An Empirical Theory
Legislators and Development
Legislators and Redistribution
A Theory of Change
The Changing Federal System
The Adolescence of Modern Federalism
Classifying Government Expenditure
The Redistributive Focus of the National Government
The Developmental Focus of State and Local Governments
Why States Choose Different Policies
The Variation in State Expenditure
Determinants of State Developmental and Redistributive Policy
A Comprehensive Explanation of State Expenditure
Welfare A Race to the Bottom?
Trends in Welfare Policy
Appropriate Units of Analysis
Factors Affecting the Distribution of Federal Grants
A Comprehensive Explanation of Federal Aid Policy
Big Cities Is the Problem Financial?
The Urban Political Economy
The Cost of BigCity Government
The Cost of BigCity Schools
Federalism and Big Cities
National Politics and the Fiscal Future of Big Cities
Reducing the Price of Federalism
The Future of Redistributive Policy
Stability and Change in American Federalism
Things That Should Not Be Changed
Things That Cannot Be Changed
Things That Can and Should Be Changed