Rethinking Federalism: Social Order Through Evolution or Design?

Abstract

The particular focus of this chapter will be to analyze institutional change from an Ostromian perspective by analyzing the relationship between self-governance, polycentricity, and federalism. Throughout work of Elinor and Vincent Ostrom, there exist two consistent themes regarding the importance of federalism for polycentric governance. First, the Ostroms emphasized that the institutional conditions of federalism are a human artifact, based upon choice and deliberation. However, given their emphasis on processes of learning among human beings, this second theme suggests, as I argue in this chapter, a bi-directionality in institutional analysis in the Ostromian framework. Though federalism and polycentric governance are based on deliberate choice, such an institutional framework facilitates learning and the adaptive potential of human beings, leading to innovative institutional changes to reinforce social cooperation between individuals.

Keywords: Federalism; Polycentricity; F.A. Hayek; Elinor Ostrom Vincent Ostrom; Spontaneous Order

JEL Classification: D73; P14; P16