Finance Papers

Document Type

Journal Article

Date of this Version

1997

Publication Source

Journal of Economic Perspectives

Volume

11

Issue

4

Start Page

43

Last Page

64

DOI

10.1257/jep.11.4.43

Abstract

The appropriate federal structure of government is now a policy issue of major debate. This paper identifies three approaches and compares their strengths and weaknesses. Economic federalism recommends the use of competitive communities for the provision of congestible local goods and a strong central government for the provision of pure public goods and spillovers. Cooperative federalism recommends intercommunity agreements; democratic federalism prefers a majority-rule representative legislature. Efficiency will sometimes conflict with other constitutional objectives--political participation and the protection of rights--and compromises will often be required.

Copyright/Permission Statement

Copyright © 1997 by the American Economic Association.Inman, Robert P., and Daniel L. Rubinfeld. 1997. "Rethinking Federalism." Journal of Economic Perspectives, 11(4): 43-64.

Embargo Date

1998

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Date Posted: 27 November 2017

This document has been peer reviewed.