Taking Care of Ourselves: State Citizenship, the Market, and the State
72 Pages Posted: 23 Aug 2007
Date Written: August 2007
The Constitution forbids the states from discriminating against non-residents in the regulation or taxation of commercial activities. Yet, courts have allowed states to favor residents over non-residents in a number of ways, such as with respect to public university admissions and government procurement policies. In this article, Professor Williams offers a normative theory and doctrinal framework to reconcile these competing demands of interstate equality and state autonomy. Specifically, states may favor residents with respect to state programs funded by state citizens when such discrimination is necessary to vindicate the citizens' legitimate claim of entitlement to such taxpayer-funded programs. This "investment capture" defense is then applied to the various mechanisms states typically use to favor residents, such as discriminatory tax provisions, government procurement policies, the distribution of government-owned goods and services, and the imposition of so-called "downstream restraints" on private parties who deal with the state.
Keywords: Dormant Commerce Clause, Market Participant, interstate equality
JEL Classification: K1, K11, K39
Suggested Citation: Suggested Citation