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The Price of Federalism

4.0 out of 5 stars 1 customer review
ISBN-13: 978-0815770237
ISBN-10: 0815770235
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Editorial Reviews

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.


"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


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Product Details

  • Paperback: 268 pages
  • Publisher: Brookings Institution Press (May 1, 1995)
  • Language: English
  • ISBN-10: 0815770235
  • ISBN-13: 978-0815770237
  • Product Dimensions: 6 x 0.6 x 9 inches
  • Shipping Weight: 12 ounces (View shipping rates and policies)
  • Average Customer Review: 4.0 out of 5 stars  See all reviews (1 customer review)
  • Amazon Best Sellers Rank: #1,183,567 in Books (See Top 100 in Books)

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Top Customer Reviews

Format: Paperback
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.
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