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A New Dual Federalism
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NEW DUAL FEDERALISM
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Abstract
Dual federalism – the idea of distinct national and state spheres – fell out of fashion long ago. Within what Samuel Beer (1993) calls the dimension of federalism "authority," which concerns “the balance of power between levels of government,” new labels ranging from cooperative to ambiguous federalism have taken over to describe the increasingly intertwined nature of federalism in practice.
Along Beer’s second dimension – "purpose," which concerns the policies for which authority and power are used – a different species of dual federalism may yet prove useful to theory builders. Paul Peterson (1995) has sketched the outline of a new dual theory, which he calls functional federalism. Functional theory draws upon public finance economics to assert that (1) national government is best suited to finance activities associated with redistribution, because national officials can control their borders and therefore choose who will benefit; and (2) sub-national governments are the optimal providers of development (i.e., physical and social infrastructure necessary to economic growth), because the same incentives that fuel a race to the bottom in sub-national welfare efforts encourage a race to the top in sub-national development efforts.
More work is needed to construct a robust theory of dual functional federalism. Toward that end, this paper seeks to plug a few holes in the emerging theory’s framework for predicting redistribution patterns across levels of government.
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NEW DUAL FEDERALISM
2
Abstract
Dual federalism – the idea of distinct national and state spheres – fell out of fashion long ago.
Within what Samuel Beer (1993) calls the dimension of federalism "authority," which
concerns “the balance of power between levels of government,” new labels ranging from
cooperative to ambiguous federalism have taken over to describe the increasingly intertwined
nature of federalism in practice.
Along Beer’s second dimension – "purpose," which concerns the policies for which authority
and power are used – a different species of dual federalism may yet prove useful to theory
builders. Paul Peterson (1995) has sketched the outline of a new dual theory, which he calls
functional federalism. Functional theory draws upon public finance economics to assert that
(1) national government is best suited to finance activities associated with redistribution,
because national officials can control their borders and therefore choose who will benefit; and
(2) sub-national governments are the optimal providers of development (i.e., physical and
social infrastructure necessary to economic growth), because the same incentives that fuel a
race to the bottom in sub-national welfare efforts encourage a race to the top in sub-national
development efforts.
More work is needed to construct a robust theory of dual functional federalism. Toward that
end, this paper seeks to plug a few holes in the emerging theory’s framework for predicting
redistribution patterns across levels of government.
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