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American government is in trouble. It seems to cost more, deliver less, and inspire deeper cynicism year by year. Some say the only solution is to shrink the public sector down to a competent core. Others call for restructuring, reinvention, and reform at the federal level. But the most popular prescription is to shift the public sector’s center of gravity away from Washington and toward the separate states. Democrats and Republicans alike have celebrated devolution as a return to America’s Federalist roots, a ...
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American government is in trouble. It seems to cost more, deliver less, and inspire deeper cynicism year by year. Some say the only solution is to shrink the public sector down to a competent core. Others call for restructuring, reinvention, and reform at the federal level. But the most popular prescription is to shift the public sector’s center of gravity away from Washington and toward the separate states. Democrats and Republicans alike have celebrated devolution as a return to America’s Federalist roots, a spur to efficiency, and a remedy for the rigidity, waste, and arrogance that alienate citizens from their government. They contend that the fifty state governments—small, flexible, "close to the people,” and disciplined by competition—will be more efficient and more responsive than the lumbering federal bureaucracy.But will devolution deliver? In Disunited States, John D. Donahue contends that despite its broad appeal, letting Washington fade and the states take the lead is a dubious strategy for reform. It reflects a misreading of America’s history, a warped view of its bedrock values, and a false analogy to the virtues of competition and decentralization in the private sector. At worst, he argues, America’s willing disintegration within an integrating world economy will be recorded among history’s monumental follies. At best, devolution will prove to be a detour on America’s path to renewal.Donahue shows that shifting power toward the states will do much less than advocates promise to boost efficiency and accelerate innovation—and much more than they admit to undercut national interests and corrode America’s sense of commonwealth. Addressing controversial topics as diverse as welfare reform, school funding, legalized gambling, and interstate bidding for business investment, he weaves a coherent case that isolated action by competitive state governments, not excessive centralization, poses the graver threat to Americans’ most cherished goals. The ascendancy of the states cannot relieve us of the need to confront our problems—growing inequality, eroding trust in government, and an imperiled middleclass culture—as a nation.Indeed, the proponents of shifting power to the states fail to account for the fact that America retains national interests and national values that will get short shrift in an unregulated environment where states accelerate their competition to attract business investment and capital while simultaneously competing to reduce the costs of social welfare programs.The genius of the founders was to forge a single vital nation out of the several separate states, and Disunited States reveals that the road to national division—the road not taken by Madison, Hamilton, Jefferson, or Washington—may turn out to lead us not toward restored greatness, but away from it.
Current dogma in the longstanding American drama of national authority versus states' rights favors the latter. Donahue's unfashionable response is that reality rather than ideology should shape policy: Tremendous advantages will probably not accrue from devolution of governmental responsibilities, and divided authority has its own problems. Studies of administrative efficiency reveal that state governments sometimes do slightly outperform the federal government—a finding worth noting, but hardly a ringing endorsement of state superiority. A more important point requires recognizing that the biggest task other than national defense undertaken by the federal government is writing checks. Since it is unlikely that Social Security checks, for example, can be written more efficiently in state capitals than in Washington, there are real limits to the benefits of decentralizing administrative operations. State governments could offer greater responsiveness to citizens, but polls reveal that state bureaucracies are held in only slightly less disdain than their federal counterpart. It is in the policy arena where significant differences can be found, including the contrast between Washington's relatively laissez-faire approach to economic markets and the active efforts of state governments to steal industries away from each other. Unfortunately, such efforts rarely produce good policy, and in the one area where responsibility lies at the state and local level—education—the results have not received universal acclaim. Donahue's sensible argument is that policy sometimes benefits from the unity of federal-state action, and at other times from the diversity of actions taken by state governments.
Only in the context of recent political rhetoric emanating from both parties could such a solid and balanced work be potentially controversial.
|Preface and Acknowledgments|
|Ch. 1||The Ascendancy of the States||2|
|Ch. 2||America's Endless Argument||16|
|Ch. 3||Unity and Autonomy: The Weights on the Scale||38|
|Ch. 4||The National Commons||56|
|Ch. 5||The Industrial Policy Paradox||75|
|Ch. 6||The Courtship of Capital||92|
|Ch. 7||Commonwealth and Competition||120|
|Ch. 8||The Stewardship of Skills||144|
|Ch. 9||The Endless Argument's Next Stage||159|
|Appendix||Research on the Impact of Business-Attraction Policies||171|