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The Price of Federalism, by Paul E. Peterson
PDF Download The Price of Federalism, by Paul E. Peterson
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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.
- Sales Rank: #1180198 in Books
- Published on: 1995-05-01
- Original language: English
- Number of items: 1
- Dimensions: 9.02" h x .60" w x 5.98" l, .91 pounds
- Binding: Paperback
- 268 pages
From Publishers Weekly
Okay: this is beach reading only if you're a policy wonk. But that doesn't mean the average voter won't find it an informative, even accessible, book that goes to the heart of the current talk about block grants, unfunded mandates, the deficit and more. After a whirlwind overview of American federalism, Peterson offers two theories of the fiscal relationships between national and local governments. Functional theory posits that different levels of government are best suited to different kinds of funding: for the national government, that's redistributive programs (e.g., welfare, SSI), which it can apply evenly across the country; developmental programs (e.g., roads, buildings) are best left to local governments, which respond more efficiently to local needs. The cynical legislative theory suggests the opposite: the national government (read congressmen) will prefer to legislate popular development projects for constituents (aka pork) while leaving unpopular redistributive projects to the states. Peterson argues that if legislative theory best explains federalism from 1957 to 1977, functional theory is increasingly the norm now and should continue to be. On the one hand, pork is losing popularity, as functional theory says is best. Contrary to the theory's prescriptions, however, is the idea of giving states control over redistributive programs, which, Peterson says, will result in every state trying to cut welfare in order to discourage an influx of the poor. Yes, there are charts, but that's no excuse to shy away from this valuable look at the bottom line of domestic politics. $20,000 ad/promo.
Copyright 1995 Cahners Business Information, Inc.
Review
"An informative, even accessible, book that goes to the heart of the current talk about block grants, unfunded mandates, the deficit and more.... [A] valuable look at the bottom line of domestic politics" —Publishers Weekly
From the Back Cover
Seen in the perspective of 220 years of American history, the balance between the federal government and the states appears to involve the relentless accretion of power, resources, and responsibility to the national level. For any given generation of policymakers, however, this sense of inevitability evaporates in the heat of their immediate struggles over who does what and, perhaps even more importantly, which level of government pays the bills.
Most helpful customer reviews
1 of 1 people found the following review helpful.
Price of federalism is a good title
By Gderf
This is a fine readable study of expenditures, mechanisms, motivations and history of our system of federalism. States are still viable in spite of increasing federal power. In spite of growing power of the federal government there are still differences between states,
they still have some choice and control of their own destinies. Peterson's premise is that States are best suited to handle development expenditures while the federal government is best situated to handle expenditures designed for redistribution of resources. There's little analysis of the motivations for redistribution nor the growth to where such expenditures swamp out all others.
There are academic discussions of nullification and what the writer calls functional theory and
legislative theory. Legislative federalism is growing at the expense of the other. Peterson points out that modern federalism began with the New Deal. The welfare state originated with the ND and greatly expanded in the late 60s.
Observations include that significant legislation needs consensus. I think that recent events have shown this to be arguable. Big cities are the Achilles heel of federalism as cities are unable to cope with the expanding of the poor. The NY bailout changed public perception of aid programs with funding dropping ever since. The book asks whether welfare is a race to the bottom. Problems include expansion of cities, polarized constituencies, and growing inequality. In trying to balance between justice to poor and overcompensation, cities struggle to avoid becoming welfare magnets.
In an interesting diversion into the politics of redistribution, Peterson contrasts the welfare policies of Robert Reich and Alice Rivlin during the Clinton administration. He calls Reich a "morning glory', while Rivlin's influence became a "longer lasting oak."
This is a very fine introduction to many concepts of the philosophy involved in our federalist form of governance, but badly in need of a revised edition. It would certainly have merited 5 stars in 1995, but now at least 1 less for lack of longevity.
P.S. After writing this review I read the one by Bookings Institute. It's much better than mine, so I refer the prospective reader to that one.
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