Journal of Economic Perspectives: Vol. 11 No. 4 (Fall 1997)


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Rethinking Federalism

Article Citation

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

DOI: 10.1257/jep.11.4.43


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.

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Inman, Robert P. (U PA and NBER)
Rubinfeld, Daniel L. (U CA, Berkeley)

JEL Classifications

H11: Structure, Scope, and Performance of Government
H77: Intergovernmental Relations; Federalism; Secession


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