The Political Economy of Compensatory Federalism

48 Pages Posted: 4 Oct 2017

See all articles by Sanford C. Gordon

Sanford C. Gordon

New York University (NYU) - Wilf Family Department of Politics

Dimitri Landa

New York University (NYU) - Wilf Family Department of Politics

Date Written: September 29, 2017

Abstract

To what extent does the federal structure of policymaking in the United States mitigate or exacerbate national political conflict? We develop a model of two-level governance in a federal system in the presence of interstate preference heterogeneity and cross-state externalities. The key underlying intuition is that states with high demand for public spending or regulation are better positioned to adjust state-level policies to compensate for perceived inadequacies in national policy than corresponding states with low demand. We explore the normative and behavioral implications of this asymmetry under majoritarian and supermajoritarian national policymaking institutions, and use the model to account for a number of empirical regularities in U.S. politics and policymaking.

Keywords: Federalism, polarization, conflict, supermajoritarian

JEL Classification: D78, H77, H23

Suggested Citation

Gordon, Sanford C. and Landa, Dimitri, The Political Economy of Compensatory Federalism (September 29, 2017). Available at SSRN: https://ssrn.com/abstract=3046839 or http://dx.doi.org/10.2139/ssrn.3046839

Sanford C. Gordon (Contact Author)

New York University (NYU) - Wilf Family Department of Politics ( email )

19 West 4th Street, 2nd Floor
New York, NY 10012
United States

Dimitri Landa

New York University (NYU) - Wilf Family Department of Politics ( email )

715 Broadway
New York, NY 10003
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
54
Abstract Views
596
rank
463,400
PlumX Metrics