
The Riga Monument to Freedom. Image by © Dreamstime
by Ilya Somin
Federalism is a political system with multiple levels of government, each of which has some degree of autonomy from the others. The United States has a federalist system that encompasses the national government, states, and localities. The United States adopted federalism in part to prevent abuses of power and to preserve individual liberty. Federalism serves those goals by helping individuals to “vote with their feet,” thereby fostering interjurisdictional competition. Such benefits are most likely to be found in federal systems where subnational governments have an incentive to compete for residents and businesses because they must raise most of their revenue from their own taxpayers, as opposed to receiving subsidies from the central government. In many ethnically divided societies, federalism can also enhance liberty by reducing ethnic conflict and oppression. However, federalism can also endanger liberty or property by empowering subnational governments to exploit owners of immobile assets, most notably land. Federalism can also permit local majorities to oppress local minorities. Contrary to James Madison’s expectations, federalism in the current era is unlikely to constrain the national government since states have incentives to support the expansion and centralization of power in Washington. Whether federalism enhances liberty depends on circumstances and institutional design.
Read the Full Policy Analysis…..
The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.
We are glad you do! Please consider donating if you want to read more articles like this one.
Comment
|
June 30th, 2014
Libertarianism and Federalism
by Ilya Somin Federalism is a political system with multiple […]
The Riga Monument to Freedom. Image by © Dreamstime
by Ilya Somin
Federalism is a political system with multiple levels of government, each of which has some degree of autonomy from the others. The United States has a federalist system that encompasses the national government, states, and localities. The United States adopted federalism in part to prevent abuses of power and to preserve individual liberty. Federalism serves those goals by helping individuals to “vote with their feet,” thereby fostering interjurisdictional competition. Such benefits are most likely to be found in federal systems where subnational governments have an incentive to compete for residents and businesses because they must raise most of their revenue from their own taxpayers, as opposed to receiving subsidies from the central government. In many ethnically divided societies, federalism can also enhance liberty by reducing ethnic conflict and oppression. However, federalism can also endanger liberty or property by empowering subnational governments to exploit owners of immobile assets, most notably land. Federalism can also permit local majorities to oppress local minorities. Contrary to James Madison’s expectations, federalism in the current era is unlikely to constrain the national government since states have incentives to support the expansion and centralization of power in Washington. Whether federalism enhances liberty depends on circumstances and institutional design.
Read the Full Policy Analysis…..
Author
View all posts
The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.
Do you like the article?
We are glad you do! Please consider donating if you want to read more articles like this one.
Related
Comment
"The Map and the Territory" – Book Review
January 7th, 2014
Comment
The EU needs supply-side reform
February 2nd, 2015
Comment
The Free Market Road Show Took Argentina By Storm!
September 18th, 2018
Comment
Charismatic Chinese leader’s political reforms could simply be a purge
October 10th, 2014
Comment
World IP Day
May 7th, 2021