Lander Governance in a Global Era: The Case of Hesse

Subnational governments in federal systems are among the institutionsbeing buffeted by economic trends and institutional developmentsassociated with globalization. While the national governments'ability to maintain policy autonomy in a global age is frequentlyexamined, less attention has been devoted to the subnationalleaders' capacity for responding to global circumstances whilestill preserving the traditions and priorities of their jurisdictions.This article explores the responses of a single German Land,Hesse, to international events between 1982 and 1999. The analysisconcentrates first on changes in governmental structure andprocedure that reflect developments in Hesse's global environment,and then on changes in economic and environmental policy, apolicy domain central to Hessian politics throughout the period.Hesse's political leadership has not been able to insulate theLand from global pressures, but by acknowledging their distinctcircumstances, they have shaped institutions and policies inways that have enhanced their ability to derive significantadvantage from trends originating outside their borders.     

STATE ENERGY POLICIES: FEDERAL FUNDS FOR PAPER PROGRAMS

Taking their policy cues from the federal government, the states have done little to effectively deal with energy problems. In fact, their programs could be styled "federal funds for paper programs." inasmuch as the state programs have been written to conform to federal language, but not to attack energy problems in a serious fashion. There is great variation among the states in energy program expenditures, but these are not related to economic or political structures. However, the more urbanized, economically growing, and energy "rich" states spend the most on energy problems.     

Public Lands Policy and Economic Trends in Gateway Communities

From the mid‐1960s through 1980, major policy changes were adopted as a result of federal and state public lands protection statutes. This article analyzes the impact these policy changes have had upon the economies of gateway communities, a subject of limited discussion in the scholarly literature. One conclusion is that gateway community economies have become less dependent on resources extraction. This analysis finds that several factors––beyond policy change––have influenced the shift away from resources extraction. Likewise, there is the question over what economic mainstays have stepped in to fill the resources extraction void? For many gateway communities, it appears that the answer has been recreational tourism. The implications of this economic shift within gateway communities are explored.     

Measuring Municipal Borrowing Costs: How Missing Cost Information Biases Interest Rate Calculations

A substantial literature exists on federal tax expenditures, but almost no empirical research has been done on state tax expenditures. This article examines Michigan tax expenditures, with an emphasis on comparison to findings from the federal level. Three major topics are addressed: (1) allocation of resources by policy area, (2) distribution of tax expenditure benefits by income class, and (3) tax expenditure growth over time. Only the findings on resource allocation are consistent with findings from the federal level, suggesting that simple theories may be insufficient to systematically describe tax expenditures.     

THE ROLE OF STATE ECONOMIC DEVELOPMENT PROGRAMS IN NATIONAL INDUSTRY POLICY

A decade of economic stagnation has produced a plethora of calls for government action to stimulate economic growth in employment. Arguing that activists federal industry policy is likely not to emerge in the United States, Rasmussen and Ledebur examine the potential role of states in a "federalist industry policy." States presently administer effective programs of financial assistance to business enterprises. These efforts are "rationally parochial" in that their purpose is served equally well by cresting a new job or pirating from other jurisdictions. This paper considers how state programs can be reoriented to serve national growth and development objectives as well as those of specific jurisdictions. It concludes that a subnational industry policy offers a unique opportunity to reallocate existing state resources to achieve a much higher social return.     

MEGA-EVENTS, URBAN DEVELOPMENT, AND PUBLIC POLICY

As cities compete for jobs and capital in the context of limited federal aid and increasing global economic competition, a new and potentially high‐risk public policy strategy for stimulating local economic growth has emerged. This megaevent strategy entails the quest for a high‐profile event to serve as a stimulus to, and justification for, local development. How and why do American cities commit their resources to seeking a mega‐event? And, if a city lands a megaevent, how does that event affect local development policy? To address these questions, we examine the experiences of three American cities which have bid for and organized the Olympics in the contemporary era: Los Angeles, Atlanta, and Salt Lake City.     

WATER RESOURCE DEVELOPMENT

Both the federal and state governments have strong constitutional daims and political resources with which to influence the allocation of water resources. Until the 1970s. federal agencies were able to dominate kr setting goals and objectives. However, when the federal government attempted to implement a national water policy in the 1970s, effective opposition was mounted by the states. Both the states and the federal government now exert decisive influence in water policy.     

POLICY-MAKING IN THE AMERICAN STATES: TYPOLOGY, PROCESS, AND INSTITUTIONS

The three levels of government in the U.S. federal system maintain a different set of policy priorities because they operate under varying environmental constraints and resources. Efforts to categorize and specify the politics in terms of policy types have been particularly fruitful at both the federal (e.g., Lowi) and the local (e.g., Peterson) levels. At the state level, however, the typology perspective has yet to be more fully developed. This paper makes a preliminary effort to construct a typology framework in understanding state politics and policy. First, politics can be differentiated between growth and redistribution in the structural economic context. While redistributive politics are largely structured by class-oriented issues, growth politics are predominantly shaped by territorial concerns that temper class and ideological differences. Equally important, the growth-redistribution distinction can be supplemented by the politics of routine services, such as public education. The latter remains dominated by service-provider groups. Moreover, based on an empirical analysis of hundreds of bills in one state legislature, these political differences are found to have contributed to variations in policy consensus among lawmakers as well as interest group representation in agenda setting and legitimation across policy arenas. Our findings also suggest limitations to the typology framework.     

Where Science Comes to Life: University Bioscience, Commercial Spin-offs, and Regional Economic Development

Biotechnology, rather than being defined as a distinct industry like steelmaking or shipbuilding, is instead a scientific knowledge base—a rapidly evolving technology—that has economically valuable applications in such diverse industries as pharmaceuticals, medical diagnostics, agriculture, bioenvironmental remediation, and chemical processing. Biotechnology has captured the imagination of ambitious scientific investigators and investors seeking high rates of return, as well as state economic development officials who hope to anchor the industry in their locality and reap the industry's economic and employment rewards. Biotech is still at an early stage of its development, and there are many competing hypotheses about its future development. Most importantly, biotechnology involves the commercialization of science resources in which the federal and state governments have made substantial investment. One key question is how to leverage this investment for future economic growth. This article explores the policy issue related to the commercialization of biotechnology, its role as an engine of economic development, and the appropriate public policy response.     

Föderalismus und wohlfahrtsstaatliche Entwicklung. Österreich und die Schweiz im Vergleich

Starting from the stylised fact that federal institutions are held to be inimical to welfare state expansion, this paper examines the ways in which federalism has shaped the dynamics of welfare state development in Switzerland and Austria. A comparison of these different federal polities reveals that the welfare breaking effect attached to federalism crucially depends on the extent of vertical power separation. In both countries economic competition among constituent units did not fuel a race to the bottom in social standards. In Switzerland, the most important reason connected to federalism for why federal social policy was delayed and downsized was policy-preemption by the cantons and their considerable influence on the federal policymaking process. In contrast, the Austrian Länder neither had major social policy competencies nor an effective veto power which allowed them to block the centralisation of public policy. Instead, federalism is subordinate to the partisan arena at the central state level which itself is dominated by political parties quite favourable to welfare state expansion.     

Guns vs. Taxes? A Look at How Defense Spending Affects U.S. Federal Tax Policy

Although studies have shown a theoretical and empirical link between defense spending and economic growth and between economic growth and tax policy, the impact of defense spending on federal tax policy remains largely unexplored. This paper proposes a theoretical model and empirical test to explore the direct and indirect effects of defense spending on federal tax policy. The findings suggest that consumption expenditures for national defense directly influence the federal corporate income tax rate. However, the analysis finds no indirect relationship between defense spending and federal tax policy mediated through economic growth.     

The Governor as Innovator in the Federal System

Until recent decades, governors seeking to provide innovativeleadership often did so despite being handicapped by inadequateinstitutional powers, leaving them to their own personal skills.Recent reforms have now provided many governors with greaterinstitutional powers, including more tenure potential, enhancementof the governor's office, a stronger budget capacity, and therise of policy and planning offices located in or close to thegovernor's office. Most important, governors are more aggressivein seeking answers to policy issues both within their own statesand in collaboration with other governors. The National GovernorsAssociation has been upgraded to assist governors in dealingwith the federal government and with state problems. RecentNGA efforts in the areas of education and economic developmentmay presage an even more significant change as governors addressmajor issues jointly.     

On the front lines of welfare delivery: Are workers implementing policy reforms?

The impact of policy changes on the local delivery of services has been overlooked in several decades of largely unsuccessful efforts to “reform” welfare. This article uses one case of state-level welfare reform in the early 1990s to examine the implementation of policy changes in local welfare offices. Direct observation of transactions between welfare workers and clients suggests that policy reforms were not fully implemented by street-level bureaucrats. The instrumental transactions that continued to dominate interactions with clients were consistent with processing claims and rationing scarce resources, but they were poorly aligned with new policies aimed at changing the services and message delivered to welfare clients. The failure to fully implement reforms on the frontlines has implications for the achievement of policy objectives and for equity in service provision. Implementation issues will have even greater urgency as welfare is devolved from federal to state governments.     

The Forgotten Regional Organizations: Creating Capacity for Economic Development

Government capacity helps explain variance in public sector organizations' performance, and measuring capacity helps identify deficiencies that may be addressed in order to improve the efficiency and effectiveness of these organizations. This study examines the capacity of regional economic development districts to leverage federal grant funds in the counties they serve, controlling for additional sources of potential capacity and demand for federal grants. A decade of data reflecting federal grant funding to counties in one state was compiled from the Federal Awards Data System and analyzed using pooled cross-sectional time-series analysis with panel-corrected standard errors. The results indicate that regional economic development districts demonstrate varied but significant capacity to leverage federal grant funds in the counties they serve. The results suggest that similarity in the purpose and structure of regional economic development districts within a state are not enough; we need to better understand the resources within the organization and the mission that determines how those resources are applied.     

Drug policy and federalism

Supply restricting drug policy is inefficient from an economic point of view, but is nevertheless widely used. This paper explains this phenomenon as individually rational behavior for local government. Because supply restriction gives addicts an incentive to migrate it has an external effect. This effect makes a policy of supply restrictions individually rational but leads to socially wasteful competition between local governments in a federal system.     

Administrative reform in Belgium: Maintenance or modernisation?

This article aims to analyse, classify and explain similarities and differences in administrative reform in four separate Belgian administrations along four internationally observed trends in administrative reform: organisation, personnel, strategy, and finance. Comparatively, Flanders can be classified as an early moderniser, followed by the federal government, which had been locked longer in a trajectory of maintenance. The French-speaking governments of the Walloon Region and French Community are late modernisers, and compared to both the Flemish and federal government their reform efforts are more fragmented and incremental. The main factors explaining variations in administrative reform in Belgium are differences in institutional continuity, policy entrepreneurship and policy diffusion, all three of which combined to support administrative reform efforts at the Flemish and, slightly less so, at the federal levels, and were markedly absent in the French-speaking governments. Aggregated indicators of differences in political culture do not convincingly explain differences in public sector reform, but the degree of partisan control over the administration, as a meso dimension of politico-administrative culture, impacts on the French-speaking governments' resistance against certain types of organisational and human resources management reforms.     

Mandates As Both Hardship And Benefit: The Clean Water Program In Small Communities

No other intergovernmental policy has been so costly and difficultfor small local governments to implement as the 1972 versionof federal Clean Water legislation. This legislation has requiredthousands of localities to construct new or upgraded sewagetreatment systems. Rural governments have been hard pressedto cope with the demands of the anti-pollution standards, becauseof limited fiscal and managerial capacities and local valuesoften in conflict with national and state policy goals. Yet,as this study of eight rural California communities suggests,implementation can bring local benefits as well as hardship.As a result of their decade-long experiences with the CleanWater program, the small municipalities generally improved theirsewer system finances, acquired new organizational skills andresources, and increased their capacity to accommodate populationgrowth and stimulate economic development. These were long-runimpacts, occurring after initial problems and delays in theplanning, funding, and construction of the new plants.     

The influence of federalism on fiscal policy making

Abstract. This article attempts to refine the statement that federal states face difficulties in fiscal policy making because of the territorial division of powers by comparing two federal countries, Canada and Germany. These two countries differ in terms of their type of federalism: Canada displaying a power-separation system and Germany corresponding to a power-sharing type. According to the authors, the territorial factor influences fiscal policy making through the distribution of taxing and spending powers as well as through patterns of intergovernmental relations. The use of fiscal policy instruments and the likely effects on conflict and cooperation in those two countries is discussed with empirical evidence. The authors come to the conclusion that federalism is indeed a constraint on fiscal policy making, but that the two types of power division face different obstacles and deal differently with fiscal problems. In the power-separation system of Canada, the federal government has encompassing competencies to use fiscal policy instruments unilaterally and without restraint, but faces a lack of concerted action with the provinces which reduces its scope of action in fiscal policy making. In the power-sharing system in Germany, concerted action facilitates macroeconomic stabilisation strategies but the compulsory negotiation system distorts the use of fiscal policy instruments by distributive bargaining.     

Targeting in Economic Development: Comparative State Perspectives

This article examines recent efforts to target state industrialpolicy along three dimensions: sectoral aid to specific businessesor economic activities, geographic aid to growing or decliningregions, and direct assistance to the unemployed. While thestates have done better with sec-toral targeting than opponentsof a federal industrial policy have feared, industrial policymust compete with many other state programs, including moretraditional economic development efforts based on advertisingand tax expenditures. Only a few states have managed to channelmuch state aid to displaced workers or distressed communities.Despite some evidence as to the success of industrial policyfocused on limited areas or activities, dilution of policy focusand underinvestment of resources characterize state industrialpolicy efforts to date.     

Neutrality and advocacy in policy research

The naive scientism which has dominated federal policy research and most policy research institutes has become a self-blinding dogma, an armchair philosophy which fabricates and distorts reality and has failed at its task of understanding our social and economic problems. Broader approaches are needed which do not artificially isolate and arbitrarily quantify selected factors but examine them in their social and historical context. The vain search for “objectivity” should be replaced by an honest avowal of the interests being served. The sanctimonious assertion of an undefinable “public interest” should be replaced by a definable fairness doctrine setting forth the status of the draft and final reports, project finances, and institute and sponsor controls. Such a doctrine could provide the basis for a new professional consensus and self-regulation in the policy research community, and for new IRS tax regulations governing nonprofit research institutions.