Interstate Competition and Welfare Policy

In 1996, the federal government terminated the Aid to Familieswith Dependent Children (AFDC) program and replaced it withthe Temporary Assistance for Needy Families program (TANF).Many powers once held by the federal government are now beingused by state governments. Will welfare assistance be redesignedand expanded or will states "race to the bottom?" This issueis investigated by examining state welfare policy choices duringthe latter years of AFDC(1976–1994). Because each stateunder AFDC had the authority to set the level of its welfareguarantee for families that had no income, it is possible toestimate the effects of interstate competition on AFDC guaranteelevels. By estimating a spatial autocorrelation coefficientwhile controlling for theoretically relevant variables and statefixed effects, this study finds evidence that states are sensitiveto the welfare policies of their competitors.     

Interstate Banking: Current Status and Unfinished Agendas

In 1986, most of the centuries-old barriers against interstatebranch banking fell. By the end of the year, thirty-seven stateshad passed legislation authorizing some form of interstate branchbanking. Moreover, two federal judicial decisions had clearedthe way for interstate banking by restricting state regulatoryauthority over interstate branch banking when it is conductedeither through a shared-use automatic teller machine or by a"nonbank bank." These developments have dramatically changedthe nature of the business of banking, creating an entirelynew legislative agenda for states. High on the list of the itemsthat states must now consider are regulatory and tax parityamong competing financial institutions; multiple taxation offinancial institutions that do business in several states; taxavoidance by out-of-state banks; and out-dated jurisdictionalstandards.     

Intergovernmental councils in the United States

ABSTRACT

This article focuses on intergovernmental councils (IGCs) in the United States in which prominent state-level executive politicians, that is, governors, play a leadership role. In the US case, these IGCs developed out of a desire to facilitate interstate information exchanges and a need for state governments to join forces to protect their autonomy vis-à-vis the federal government. In this latter role, the councils function as lobbyists for state government interests. The research question driving the analysis has to do with impact: what difference do executive-led IGCs make, either vertically or horizontally, in the US federal system? The question of impact is particularly relevant because growing partisan polarization in contemporary federal and state political institutions complicates collective action by states.     

The Medicaid Mandates of the 1980s: An Intergovernmental Perspective

Medicaid, the health care program for the poor, has undergone significant changes in the last fifteen years. Many of those changes relate to the intergovernmental nature of the program. Medicaid is jointly operated, with the federal and state governments sharing program costs. Despite a set of program guidelines dictated by the federal government, states have traditionally had substantial latitude in Medicaid decisions. However, a series of developments in the 1980s led to increasing constraints on state Medicaid discretion, including federal mandates to expand Medicaid coverage. This article examines the inception and effectiveness of the Medicaid mandates from the perspective of interstate equity of health care services for poor families.     

STATE IMPLEMENTATION OF THE SURFACE MINING CONTROL AND RECLAMATION ACT OF 1977

The implementation of the Surface Mining Control and Reclamation Act (SMCRA) of 1977 in coal producing states is guided by a partial preemption policy approach t h a t establishes a balance between federal and state decision-making authority. The usefulness of this approach is assessed by analyzing state enforcement actions in relation the institutional capacity of states to shoulder regulatory responsibilities and the propensity of the federal Office of Surface Mining (OSM) t o oversee state enforcement actions and, if necessary, to undertake corrective action. Our results indicated that state administration of SMCRA was canstrained by the lack of effective federal oversight but was largely unaffected by interstate differences in political, economic, or administrative characteristics.     

FEDERALISM, POLICY, AND INNOVATION IN CORRECTIONS

State governments have historically dominated corrections policy, with little federal intervention. But over the past two decades, the trend has been toward "nationalizing" corrections policy, with less interstate variation and more federal standards, through the Safe Streets Act and other legislation. As federal funding declines, it may be expected that there will be a hiatus in state corrections reform, though national standards may survive if the federal courts continue to require state correctional systems to comply with federal laws previously implemented.     

Impacts of Intergovernmental Financial Incentives on State Welfare Policymaking and Interstate Equity

Welfare policy in the United States is strongly influenced byintergovernmental factors. This analysis traces the effectsof federal financial incentives on state welfare policy decisionsacross programs and examines how changes in federal incentivesaffect state policy choices over time. The data indicate thathigher levels of federal participation are associated with substantialreductions in variance of welfare grants among the states andwith higher levels of interstate equity. These findings implythat significant shifts in welfare outputs would result froma devolution of responsibility for welfare to the states.     

State support under the new federalism

The new federalism will reduce total intergovernmental revenues to local governments. The reduction will be due to both the transfer to the states of much of the federal aid which previously flowed directly to local governments and reductions in total federal aid levels. Pass-through requirements on the shifted aid will not affect this general result but may soften the impact in many states. Because of differences in the extent to which state governments substitute federal pass-through aid for state aid from own-source revenues and in the degree to which different sources of revenues are treated differently by the states, local revenue reductions will vary greatly from state to state. The losses for local governments will range from 100% of the shifted aid in some states to as little as 15–20% in others.     

State-Federal Diffusion and Policy Learning: From Enterprise Zones to Empowerment Zones

There is little empirical evidence on whether the federal governmentlearns from policy experimentation in the states, the "laboratoriesof democracy. " Interviews with participants involved in formulatingthe federal Empowerment Zones/Enterprise Communities programoffer evidence of limited policy learning from state enterprisezones. Respondents were aware of general trends and drew a fewgeneral conclusions, rather than borrowing from any particularstate. None of the federal policymakers conducted an activesearch for information about the state zones, but state andfederal organizations served as channels of information aboutthe state programs. This finding suggests that such organizationsassist state-federal diffusion as well as interstate diffusionof policy ideas.     

State Taxation of Interstate Sales: Enforcement Problems and Prospects

In their search for additional revenues, state governments in recent years have turned greater attention to collection of use taxes. Growth in interstate mail order sales has vastly increased the potential yield from use taxes, but Supreme Court decisions have limited the ability of states to effectively collect the tax. States have attempted to overcome enforcement barriers by joining in interstate use tax compliance compacts, and promoting congressional legislation to overcome constitutional prohibitions.     

Policy diffusion in subnational governments: State–local relationships in the Brazilian education policy

Intergovernmental relations play a key role in policy diffusion among constituent units. Federal governments have adopted different mechanisms to guarantee minimum standards across the countries, but historical trajectories and widely shared policy ideas are also mentioned as relevant in diffusion processes. This paper focuses on the influence of federalism in policy diffusion at the subnational level in Brazil. The 1988 Constitution consolidated decentralization of the Brazilian education policy but required cooperation between states and municipalities. The lack of a national definition resulted in a great variety of cooperative programmes and coordination arrangements, allowing the identification of similarities and differences among their diffusion processes. This article shows that state governments are the main policy-makers regarding cooperation, which highlights that the role of the federal government does not entirely explain these processes. Nevertheless, policy trajectories and the movement of ideas and people municipalities were keys for policy diffusion.     

The American Governors in International Affairs

The involvement of American governors in matters of internationalaffairs has increased significantly since the 1950s. The twomajor factors accounting for this involvement are increasedinternational economic interdependence and increased modernizationof state governments. Gubernatorial involvement in internationalaffairs is centered primarily around state needs to export productsand attract foreign investment, though other foreign policymatters also attract gubernatorial attention. Governors promotestate interests by lobbying the federal government through theintergovernmental system and by traveling abroad and otherwiseestablishing direct relations with foreign governments, usuallyequivalent or similar constituent governments of foreign nations.     

Local interests,central leadership,and the passage of TRA86

The U.S. federalist public economy is an ever-evolving system of financing and expenditure responsibilities between local, state, and federal governments. The past decades have seen a significant centralization of responsibility for the financing of state and local public services through grants-in-aid and federal tax subsidies. This article advances a model of local constituent influence in central government fiscal policies which seeks to explain this trend, and then examines how strong executive branch and congressional leadership might begin to control the local pressures for central government financing. TRA86 is offered as one example in which this leaedership proved effective. The general lesson is that good fiscal policy in federalist public economies requires not only capable local governments, but central government political institutions with the strength to meet national needs as well.     

Interstate Tax Disharmony in India: A Comparative Perspective

Interstate tax disharmony arising from the states' attempt to"free-ride" on other states can cause distortions and inequityin a federal system. In this article, an attempt is made toanalyze interstate disharmony in the Indian tax system, providea quantitative measure of disharmony, examine its trend overtime, and compare the degree of disharmony in India with threeother important federations. The major conclusions are that(1) India has a higher degree of interstate tax disharmony thanAustralia, Canada, and the United States; (2) tax disharmonyin India has increased over lime unlike in the other three federations;and (3) tax disharmony in respect of individual state taxesis higher than the taxes taken in aggregate.     

Federal Preemption of State Regulation of Insurance: End of a 200-Year Era?

This article examines state regulation of insurance, focusingon congressional and judicial attempts to displace state regulatoryprimacy over insurance. After describing the early period ofstate insurance regulation from the U.S. Supreme Court's decisionin Paul v. Virginia to the Court's overruling of that decision,the article examines the McCarran-Ferguson Act and the post-McCarranenvironment, including examples of judicial preemption of stateinsurance laws. Finally, the article considers the system ofinsurance regulation envisioned in H.R. 1290, the most recentcongressional attempt to displace state insurance regulation,and state initiatives to counter federal regulation. AlthoughH.R.1290 purports to setup a dual regulatory scheme, the broadpreemption language in the bill would allow federal regulatorsto preempt virtually all state insurance laws. Moreover, thedecisions of the Supreme Court in Garcia v. San Antonio MetropolitanTransit Authority and Chevron v. Natural Resources Defense Councilwould leave no political or judicial forum for states to debatethe extent and impact of federal preemption     

THE RELATIVE RESPONSIVENESS OF STATE AND FEDERAL AID TO DISTRESSED CITIES

Both the states and the federal government distribute significant aid to cities. Federal agencies generally offer direct assistance to cities, bypassing the states. Many federal programs operate under the assumption that the federal government is more responsive to urban problems than are state governments. This paper demonstrates that this assumption is probably not true. Federal aid administered through the states has benefitted "distressed" cities more than federal assistance which goes directly to urban areas.     

Regierungsbildung in Mehrebenensystemen: Zur Erklärung der Koalitionsbildung in den deutschen Bundesländern

The German federal governmental system is conceptualized as a full-fledged two-level system, in which the Länder governments participate in federal policy decisions via the second chamber Bundesrat and in which the stakes of state coalition building are high for the federal parties. Our research question is whether we can find systematic empirical evidence for an influence of federal on state parties to build state governments whose party composition is concordant with federal politics, containing either exclusively federal governmental or non-governmental parties. We answer this question by indirect evidence. We show that such concordant majority coalitions occur above average even if important coalition predictors are controlled as minimal winning coalitions or participation of dominant and/or central players. We predict the 182 actual Land governments which were formed in the period from 1949 to 2003 compared to the possible governments in each situation.     

Carving Out Policy Space for State Government in a Federation: The Role of Coordination

To be a player in federal negotiations, state governments needsophisticated internal coordination skills. The more intensethe federal agenda, the greater the demands made on state governmentmachinery to prepare comprehensive policy advice for those representingthe state. This study argues that moves in Australia to reformfederalism, by dealing with jurisdictional overlap, also produceda significant upgrading of state coordination capacity. A casestudy of one state, Queensland, in the Council of AustralianGovernments (COAG) experiment suggests how states carve outa space in negotiations by rethinking their internal governancearrangements.     

NSF's Experimental Program to Stimulate Competitive Research (EPSCoR): Subsidizing academic research or state budgets?

This cross‐state empirical study focuses on the National Science Foundation's (NSF) Experimental Program to Stimulate Competitive Research (EPSCoR) and examines its impact on the academic research and development (R&D) expenditures financed by state governments. Based on a panel of 50 states during 1979–2006, the empirical results indicate that EPSCoR, while increasing federal R&D support to EPSCoR states, crowded out financial support for academic research from the governments of EPSCoR states. About one‐third of EPSCoR funds went to subsidize state budgets. The crowd‐out effect calls for some reconsideration of EPSCoR program design in order to maintain or even increase the state government financial support for academic research activities deemed critical to academic competitiveness and economic prospects. © 2009 by the Association for Public Policy Analysis and Management.     

Federal Cutbacks and the Fiscal Condition of the States

Given the drive to balance the federal budget, cutbacks andchanges in federal aid are likely to place added burdens onstate governments. This article examines whether state governmentsare fiscally up to task. A review of the recent and currentfiscal position of the states suggests that current state fiscalstrength may be temporary, and is unevenly distributed amongthe states. In addition, many factors will differentially influencestate responses to the changing federal environment. Statesmay not be as fiscally ready, as Washington assumes, to handleincreased long-term responsibilities.