John Kincaid is the Robert B. and Helen S. Meyner Professor of Government and Public Service, and Director of the Meyner Center for the Study of State and Local Government at Lafayette College, USA. He is President of the Center for the Study of Federalism and is former Editor of Publius: The Journal of Federalism. Louise Tillin and Yamini Aiyar conducted the interview.
The idea of ‘cooperative federalism’ has returned to debates in India as the central government led by Narendra Modi has attempted to encourage the central government and states to work in partnership to achieve major national policy goals from improvements to the investment environment, sanitation, digitization or universal health care. New institutions such as the NITI Aayog have been tasked with strengthening the cooperative dimensions of federalism. However in a period of greater political centralization, these efforts have also faced contestation and non-compliance by state governments. Many opposition ruled states complain that the federal spirit is being undermined in other ways.
Could you tell us a bit about the history of the idea of cooperative federalism in other countries such as the United States?
The writers of The Federalist in 1787-88 generally anticipated intergovernmental cooperation, with Alexander Hamilton, for instance, recommending that the new federal government hire state tax collectors to collect federal taxes too. Albert Gallatin, U.S. Secretary of the Treasury from 1801 to 1814, sought to forge cooperative federalism by urging federal financial support for canals, roads and other infrastructure but allowing states to choose the locations and lengths of such projects. For most of U.S. history, though, intergovernmental cooperation was facilitated by the confederated party system in which states and their counties were the centres of power in each party. As such, local and state government officials controlled the electoral fortunes of members of Congress and presidents, and thereby secured their cooperation with state and local objectives. Ordinarily, moreover, members of Congress seek to direct federal largesse to their state and/or district even if the state and/or district is controlled by a different party.
Cooperative federalism has also been a way to allay long-standing American fears of ‘big government’. It is a way of having big government without appearing to have big government because, with state and local governments implementing most federal domestic programmes, the federal bureaucracy remains tiny and mostly out of sight (except for U.S. mail delivery people). Since the collapse of the con-federated party system during the 1960s, cooperative federalism has rested on other factors.
The carrots and sticks of federal aid now play important roles in ensuring cooperation. The federal government has 1,319 grants-in-aid, the total funding for which was $749 billion in 2019. On average, federal grants accounted for 31 per cent for state budgets in 2017 (ranging from 17.5 per cent in Hawaii to 41.9 per cent in Michigan). In addition, the salaries of many state and local government employees and resources for the programmes they administer rest in part on direct or indirect federal monies. From 1978 to 2004, the proportion of state agencies receiving and managing federal aid ranged from 69 per cent in 1988 to 79 per cent in 2004. Even if only a small percentage of an employee’s salary or programme resources comes from federal aid, loss of that portion can result in a job or programme cutback.
Many intergovernmental programmes are administered wholly or partly by non-governmental organizations and their employees who depend on federal funds delivered to them via state and local treasuries. Thus, they have strong incentives to welcome federal monies and the regulations that accompany them.
Another federal tool for cooperation is partial pre-emption, which allows states to enact their own regulations in a federally pre-empted field so long as those regulations are equal to or higher than the federal standards. This tool, however, is a one-way federalism. States are free to rise above the federal regulatory floor but are hammered to the floor if they enact policies deemed by the federal government to fall below the floor.
Waivers of federal law sought by states through the president are a more recent tool of cooperation arising from programme complexity, public pressure to allow more state discretion to improve outcomes, skyrocketing costs in some programmes, such as Medicaid, and polarization that makes it difficult for state and local officials to obtain more discretion through the legislative process. Waivers, however, permit only federally sanctioned state discretion and experimentation.
Many federal statutes associated with coercive federalism contain penalties including, in some cases, civil or criminal penalties, aimed at uncooperative state and local officials. Many federal statutes also enable citizens to sue state and local officials for insufficient or biased compliance with federal laws. Nevertheless, federal officials sometimes accommodate state and local officials by extending compliance deadlines. Federal officials also penalize state and local governments for violations less often than they penalize private firms.
The courts also play a role in intergovernmental relations. Following the massive resistance by southern state and local governments to the federal courts in the 1950s and 1960s, state and local officials became generally cooperative with judicial decisions, which are seen as central to the rule of law. The federal courts stand as potential hammers to compel compliance; hence, state and local officials have incentives to cooperate with federal officials. Federal officials, in seeking to foster compliance, ordinarily negotiate and bargain with state and local officials before seeking judicial intervention, but the prospect of judicial intervention has a sobering effect on state and local cooperation with federal officials.
Since the fall of massive resistance to desegregation in the South, no cultural, ethnic, religious, or linguistic region in the United States (akin to a Quebec or Catalonia) has had strong incentives to thwart intergovernmental administrative relations. Similarly, partisanship does not play a major role in intergovernmental administration. In the political arena, there may be vigorous partisan conflict over huge intergovernmental programmes, such as Medicaid and surface transportation, and over costly mandates, such as environmental regulations, but once federal policies on these matters are enacted into law, bureaucrats have an incentive to cooperate across party lines so as to administer programmes as effectively and efficiently as possible.
Due to similar civil-service rules and shared professional norms, most federal, state, and local administrators dull the sharp edges of partisanship so as to focus on cooperative task execution under existing rules and budgets. Federal, state, and local administrators within policy fields often share the same education and training pedigrees and interact with each other in the same national and regional professional associations, which are usually more important to them than party affiliations. Federal, state, and local law-enforcement officials, for example, share common training and professional backgrounds, as well as a professional camaraderie that facilitates intergovernmental cooperation.
The intergovernmental policy sector also is much more unionized than it was in 1960. Federal, state and local public employee unions and associations have similar goals; they support federal programme implementation; and they serve as additional forums for intergovernmental communication and cooperation. State and local public employee organizations usually welcome federal money and rules, and thereby support expansions of federal power.
Additionally, state and local administrators frequently advocate expansive actions and higher spending in their policy field and thus often welcome federal intervention. State and local environmental officials, for example, are likely to welcome federal rules that set stricter environmental standards and require more state and local spending on environmental protection. It is not uncommon for state and local bureaucrats to lobby for federal policies that are opposed by state and local elected officials who can be punished at the ballot box for implementing unpopular federal policies or raising taxes in order to pay for state or local implementation of those policies. Multi-year research found over the decades that federal aid and regulations promoted ‘constant, consequential, and pervasive’ state agency autonomy from gubernatorial and legislative oversight.
Interest groups are important also. After achieving a federal policy objective, they pressure state and local governments to cooperate in implementing that objective. There has been tremendous growth in interest-group activity within the states since the late 1960s. One cause of growth has been the need for interest groups to induce cooperative state and local compliance with national policy objectives supported by the interest groups. Advocates for policy causes and rights protections do not hesitate to lobby, protest and sue state and local governments for non-compliance. In 2014-17, for example, protests in numerous cities of fatal police shootings of young black men triggered federal interventions to secure local police compliance with federal civil rights rules, often through judicial consent decrees.
Socialization has occurred too. Federal dominance in so many policy fields for the past 50 years became an unquestioned fact of administrative life. Furthermore, many of today’s senior federal, state and local administrators entered public service in the late 1960s and early 1970s with a common passion for reform. For rank and file administrators, the origins of their work dictates are less important to them than their preoccupation with how to implement those dictates and satisfy the citizens who will ultimately vote for or against the elected officials who preside in a general and usually distant way over policy implementation.
Congressional interference with federal bureaucrats is another important stimulus for cooperative federalism. Members of Congress usually respond when public officials and voters in their state and/or district complain about federal bureaucrats. It is difficult to say which of the above factors is most important because of the now highly institutionalized synergy among them.
Otherwise, there is no overarching institution intended to foster cooperative federalism. The Advisory Commission on Intergovernmental Relations approximated such an institution but it operated only from 1959 to 1996. There is a White House Office of Intergovernmental Affairs, and most major federal executive agencies have an intergovernmental affairs office, but Congress no longer has committees or subcommittees devoted to federalism or intergovernmental relations. Instead, intergovernmental cooperation and coordination occur mostly through sector-specific and task-specific mechanisms of a semi-formal nature. These mechanisms arise largely from the dictates of law. Thus, for example, federal, state, and local air pollution officials are more or less required to coordinate their work. If a state department of transportation wants to build a road, it must work with all private landowners and local governments along the proposed route, comply with federal aid rules, and comply with federal and state environmental, labour, historic preservation, and civil rights laws, among many others.
In your work on cooperative federalism in the United States, you have made the point that calls for strengthening cooperative federalism were often in fact synonymous with efforts to strengthen the ability of the federal government to intervene in matters constitutionally reserved for the states. How successful were these efforts, for instance in policy areas such as the environment, urban poverty or tackling racism?
During the 1960s, there was an acceleration of a more coercive federalism as the Democratic Party and public opinion urged federal intervention into states’ affairs to remedy rights violations, social inequalities, and negative externalities.
As a result of litigation by black Americans, the U.S. Supreme Court issued a momentous ruling in 1954 ordering southern states to end their systems of education segregation whereby black and white children were required by law to attend separate public schools. The ruling helped legitimize the growth of a larger civil rights movement that spurred enactments of major federal legislation, such as the Civil Rights Act (1964) and Voting Rights Act (1965), as well as more federal court rulings, intervening in the affairs of all states for rights protection purposes. The U.S. Supreme Court also nationalized the U.S. Bill of Rights by applying its provisions to the states, even though every state constitution has always had a bill of rights. This rights revolution expanded to include American Indians, Hispanics, LGBTQ people, persons with disabilities, other minorities and women. Substantial progress has been made – including federal legalization of same-sex marriage in 2015, which was first legalized in Massachusetts in 2004 – in reducing overt discrimination in voting, education, employment and access to public goods, although social discrimination, especially against blacks, persists in many ways.
The rights revolution triggered an equality revolution that led the federal government to enact many anti-poverty programmes. Two of the largest programmes – Medicare (health insurance for people age 65 and older) and Medicaid (health insurance for the poor) – were enacted in 1965. Medicare is almost entirely a federal programme funded by a federal Medicare tax on all payrolls. Medicaid is an intergovernmental programme administered by the states in which the federal government reimburses states from 50 per cent to 77 per cent depending on a state’s per capita income. The federal government enacted many other anti-poverty programmes after 1964, almost all of which are administered by state and local governments. Poverty declined overall, although in 2017, 12.3 per cent of the U.S. population was still officially poor. However, due largely to rising divorce rates and female headed households after 1964 – which some critics blame on federal anti-poverty policies – about 17.5 per cent of children were poor in 2017 compared to 11.2 per cent of people aged 18-64 and 9.2 per cent of people aged 65 and older.
The principal negative externality attacked by the federal government has been environmental pollution. All of the 16 major federal environmental laws were enacted from 1969 through 1974. States have been mostly compliant, partly because strong citizens groups advocating environmental protection exist in every state. However, state and local government officials resent underfunded and unfunded federal environmental mandates that require them to impose often unpopular fees and taxes to fund environmental protection. For example, my city will soon add an annual $80 fee to the fees it already charges every household for water and sewer services so as to pay for federally required clean-ups of storm water. Virtually every other local government in the country will also have to impose such a fee or tax – much to the ire of their citizens. Overall, there has been substantial progress in all areas of environmental protection, although one pollutant, carbon emissions, has been rising for the past three years after having declined for many years.
Despite the calls for greater centre-state cooperation in India, many opposition ruled states have incentives not to cooperate with central policies, especially where they fear the electoral credit will go to the central government. For instance, some states have dragged their heels or refused to implement the central government’s health insurance scheme, PMJAY. Do you see similar dynamics in the US?
Resistance to federal policies by some states has been present in the federal system since the initial rise of federal power in the 1930s, although there were periodic harbingers of resistance in the past, such as threats by New England states to secede from the union in 1814 over various federal policies deemed detrimental to New England. However, given the very limited role of the federal government for the republic’s first 140 years, there was little federal policy for states to resist.
Today, resistance is almost entirely partisan, whereby a state controlled by one party resists current and past federal policies instituted by the other party in control of federal institutions. For example, passage of the Affordable Care Act (2010) by a Democratic Congress with a Democrat (Barack Obama) in the White House provoked strong resistance from states controlled by Republicans. The act sought to entice each state to establish an online health insurance marketplace; failure to do so would result in the federal government establishing the marketplace. As of 2018, only 12 states had established their own marketplace, while another 11 did so in a partnership arrangement with the federal government. The 27 states that refused to establish a marketplace had one that was established by the federal government. The act also required each state to expand its Medicaid programme; failure to do so would result in the loss of all federal funding for the state’s existing Medicaid programme. However, as a result of litigation by attorneys general from Republican states, the U.S. Supreme Court struck down this provision of the Affordable Care Act, holding that it was unconstitutionally ‘coercive’. As of 2019, 14 states had still refused to expand Medicaid.
Almost all sanctuary states and localities are Democratic. These jurisdictions refuse to cooperate with federal officials to enforce certain provisions of federal immigration laws that apply to illegal aliens present in their jurisdiction. President Trump sought to cut-off federal grant funds to those jurisdictions but federal courts stopped him because only Congress can attach conditions to federal grants. Similarly, most states that have legalized recreational and medical marijuana are Democratic. They refuse to enforce the federal Controlled Substances Act, which classifies marijuana as an illegal drug.
The form of state resistance reflected in sanctuary jurisdictions and marijuana legalization is sanctioned by the U.S. Supreme Court, which has held since 1842 that state legislative and executive officials are not constitutionally required to enforce federal law unless they volunteer to do so or the federal government pays them to do so. Hence, federal officials, if they wished to do so, could enter a state (e.g., Colorado) and arrest every owner, employee and customer of a marijuana shop, but this has not occurred because even though Congress has been unable to amend the Controlled Substances Act, Congress has refused to appropriate funds for the U.S. Department of Justice to enforce the federal law in states that have legalized marijuana. President Trump’s first attorney general, Jeff Sessions, threatened to enforce federal law anyway against state-legalized marijuana businesses but the backlash from Congress and public opinion led Trump to conclude that sending U.S. marshals and drug enforcement agents into marijuana states would be politically unwise.
Almost all states seeking to thwart access to abortion in opposition to the U.S. Supreme Court’s 1973 ruling legalizing abortion are Republican. States cannot defy the court by outlawing abortion, but they can use their considerable police power – which is the authority of a state to regulate the health, safety, welfare and morals of its citizens – to enact regulations that restrict the time period to obtain an abortion and/or make it very difficult to access abortion services. Most recently, for example, several states have sought to prohibit abortion when physicians can detect a fetal heartbeat.
Since the Reagan years (1981-89), it has become common for state attorneys general (who are elected by the voters in 43 states) to file lawsuits against the president of the opposite party. During Obama’s presidency (2008-17), Republican attorneys general filed an unprecedented number of lawsuits challenging his policies. However, already in the third year of Donald Trump’s presidency, Democratic attorneys general have filed more lawsuits than were filed during Obama’s eight years in office.
Such state resistance should not be interpreted, however, as a significant impediment to intergovernmental cooperation or the functional operation of the federal system. The lion’s share of federal laws and intergovernmental programmes functions cooperatively and as effectively as can be expected from governments in all 50 states.
Another important aspect of the federal narrative in India in the last five years has been the idea of ‘competitive’ federalism. The NITI Aayog has taken the lead to rank states, districts and villages on a range of indicators with the objective of promoting “competition” amongst subnational units in the expectation of encouraging a race to the top. The idea of competition in the centralized Indian scenario is still in its infancy. Are there lessons from other federal systems?
Some observers argue the U.S. federal system was designed to be competitive; yet, all three mentions of competition among the states in The Federalist treat it as undesirable. James Madison in The Federalist did foresee competition between the federal government and the state governments for the public’s affection, but such intergovernmental competition has not been a prominent feature of American federalism. In recent years, though, partisan polarization has produced a new form of intergovernmental competition in which the party out of power in Washington, D.C., uses states under its control as laboratories of democracy to build public affection for policies it will seek to impose on all states when the party recovers control of the federal government.
U.S. federalism has been competitive in a de facto sense insofar as interjurisdictional competition among states and among local governments was facilitated by default by a very limited federal government for the republic’s first 140 years and by the considerable powers possessed by the states in the system of dual federalism. States have substantial legal and governmental capacities to compete with each other. Interjurisdictional competition was muted for most of U.S. history because economic growth and immigration created ever larger economic and population pies that delivered bigger slices to every state. Since the 1960s, however, there has been an increase in competition for economic assets as reflected in the willingness of states to offer subsidies and tax abatements to attract domestic and international corporations. Such enticements are positive when they yield more jobs and produce better education and infrastructure, but such enticements can also be counterproductive. Interjurisdictional competition is somewhat common in metropolitan areas, especially as parents seek to purchase homes in the best public school district they can afford for their children.
In principle, interjurisdictional competition can yield positive results, but such results depend crucially on the ability of citizens to move between jurisdictions. Competition may yield negative results where financial, cultural, language, racial, legal, and other barriers inhibit interjurisdictional mobility. In principle, inter-governmental competition could yield the most positive results, in part because, rather than geographic mobility, citizens need only the freedom to vote for different parties in the federal and state arenas; however, it has proven difficult in most federal systems for state/provincial/cantonal governments to compete effectively with the federation-wide government.
