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A New Dual Federalism
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NEW DUAL FEDERALISM
29
primary responsibility for redistribution and that grants offer an effective tool for engaging lower levels of government in the job, both observation with the naked eye and econometric evidence suggest that getting grants to work correctly is diabolically difficult. Medicaid and foster care grants have induced state response, as intended, but at levels considered almost uncontrollable and with complex effects on other programs.
In contrast, AFDC grants, although they may have prevented a state race to the bottom
(Gramlich 1982), did not prevent states from letting benefit levels visibly erode for several decades. Nor did they overcome the temptation for states to displace partially-subsidized redistribution (AFDC) with fully-subsidized redistribution (Food Stamps) or to crowd out cash aid with medical assistance (Moffitt 1990). Their disagreements over AFDC price and income elasticities notwithstanding, both Gramlich and Moffitt illustrate the daunting challenges of designing federal grants to overcome, but not completely overwhelm, the many and complex reasons why states shun welfare.
With no clear solution to the problem of grant chaos in sight, functional federalism
may turn Peterson’s assessment on its head by proving itself more effective as a descriptive theory than as a normative theory.
REFERENCES
Abbott, Grace. 1938. The Child and the State. Chicago: University of Chicago Press. Beam, David R., Timothy J. Conlan, and David B. Walker. 1983. "Federalism: The Challenge of Conflicting Theories and Contemporary Practice," in Ada W. Finifter, ed., Political Science: The State of the Discipline. Washington, DC: American Political Science Association. Begala, John A. and Carol Bethel. 1992. "A Transformation Within the Welfare State," The Journal of State Government 65 (January-March): 25+. Barrilleaux, Charles J. and Mark E. Miller. 1988. "The Political Economy of State Medicaid Policy," American Political Science Review 82: 1089-1107. Baumgardner, James R. 1993. "Tests of Median Voter and Political Support Maximization Models: The Case of Federal/State Welfare Programs," Public Finance Quarterly 21: 48-83. Beer, Samuel. 1993. To Make a Nation: The Rediscovery of American Federalism. Cambridge: Belknap Press. Bell, Christopher R. 1988. "The Assignment of Fiscal Responsibility in a Federal State: An Empirical Assessment," National Tax Journal 41(2): 191-207.
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NEW DUAL FEDERALISM
29
primary responsibility for redistribution and that grants offer an effective tool for engaging
lower levels of government in the job, both observation with the naked eye and econometric
evidence suggest that getting grants to work correctly is diabolically difficult. Medicaid and
foster care grants have induced state response, as intended, but at levels considered almost
uncontrollable and with complex effects on other programs.
In contrast, AFDC grants, although they may have prevented a state race to the bottom
(Gramlich 1982), did not prevent states from letting benefit levels visibly erode for several
decades. Nor did they overcome the temptation for states to displace partially-subsidized
redistribution (AFDC) with fully-subsidized redistribution (Food Stamps) or to crowd out
cash aid with medical assistance (Moffitt 1990). Their disagreements over AFDC price and
income elasticities notwithstanding, both Gramlich and Moffitt illustrate the daunting
challenges of designing federal grants to overcome, but not completely overwhelm, the many
and complex reasons why states shun welfare.
With no clear solution to the problem of grant chaos in sight, functional federalism
may turn Peterson’s assessment on its head by proving itself more effective as a descriptive
theory than as a normative theory.
REFERENCES
Abbott, Grace. 1938. The Child and the State. Chicago: University of Chicago Press.
Beam, David R., Timothy J. Conlan, and David B. Walker. 1983. "Federalism: The
Challenge of Conflicting Theories and Contemporary Practice," in Ada W. Finifter, ed.,
Political Science: The State of the Discipline. Washington, DC: American Political Science
Association.
Begala, John A. and Carol Bethel. 1992. "A Transformation Within the Welfare State," The
Journal of State Government 65 (January-March): 25+.
Barrilleaux, Charles J. and Mark E. Miller. 1988. "The Political Economy of State Medicaid
Policy," American Political Science Review 82: 1089-1107.
Baumgardner, James R. 1993. "Tests of Median Voter and Political Support Maximization
Models: The Case of Federal/State Welfare Programs," Public Finance Quarterly 21: 48-83.
Beer, Samuel. 1993. To Make a Nation: The Rediscovery of American Federalism.
Cambridge: Belknap Press.
Bell, Christopher R. 1988. "The Assignment of Fiscal Responsibility in a Federal State: An
Empirical Assessment," National Tax Journal 41(2): 191-207.
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