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Intergovernmental Political Competition in American Federalism
Author(s) -
Volden Craig
Publication year - 2005
Publication title -
american journal of political science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 6.347
H-Index - 170
eISSN - 1540-5907
pISSN - 0092-5853
DOI - 10.1111/j.0092-5853.2005.00126.x
Subject(s) - federalism , public good , state (computer science) , competition (biology) , blame , politics , government (linguistics) , public economics , goods and services , fiscal federalism , business , crowding out , economics , political science , market economy , decentralization , microeconomics , monetary economics , law , biology , psychology , ecology , linguistics , philosophy , algorithm , psychiatry , computer science
Many policies in the United States are jointly determined by federal and state actions. In the game theoretic model offered here, politicians in both the state and national governments seek credit for providing goods desired by the public and avoid blame for the taxes necessary to provide the goods. In line with Peterson's (1995) theory of functional federalism, the level of government that is better able to supply particular goods and services tends to take the lead in their provision, even to the extent of fully crowding out much less efficient governments. However, under a broad set of circumstances, both state and national politicians seek credit via public spending, and their joint provision leads to a relative “oversupply” of public goods and services, and thus to “overtaxation.” Under joint provision, states vary in their responses to changing federal spending patterns based both on the causes of the national changes and on state characteristics .