Tyler Cowen makes a persuasive case that American federalism is essentially broken:
One study found that when it comes to votes for the state legislature, the most important factor was the popularity of the sitting president and the president’s party. How well the state’s economy was doing was relatively unimportant. Again, that hardly creates strong incentives for good practical performance. Many state and local issues are more about competence than ideology, including road maintenance, running the prison system and helping to fund K-12 education.
This is a hard nut to crack. One idea occurred to me though, that combines wish lists from both sides of the isle.
First, on most big ticket spending items, eliminate the state’s contribution all together. That means Medicaid, highway construction and even education are funded through federal taxes. However, put the money for each of those into 50 Block Funds, one for each state. Allow the Governor of each state to appoint the administrator of each his states fund.
What am I trying to do here?
I am trying to focus the election for Governor not on ideology but on competence. The Governor doesn’t have the power under this arrangement to determine the size of spending or the level of taxes. Those are determined nationally. Of course, each state could raise additional taxes and spend additional money on its own, but these would likely be very small in comparison and could not be easily combined with the large fund.
Poor performance could easily be traced back to the Governor’s managerial decisions. Equally important, it would be harder for the media and partisan activists to tar-and-feather a Governor for being ideologically flexible.
Legislatures, on the other hand, could focus more on criminal law and the regulatory environment.