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Book Summary

Conlan, Timothy 1998. From New Federalism to Devolution: Twenty Five Years of Intergovernmental Reform. Washington, DC: Brookings Inst. Press. Chapter 14: Intergovernmental Reform and the Future of Federalism.

Conlan chronicles the changing trends of devolution and federalism reform over the past 25 years, through the tenures of Richard Nixon, Ronald Reagan and Newt Gingrich. Shifts are examined in terms of the differences in the mens ideology, methods employed and the outcomes of reform.

Conlan describes Nixon as an activist conservative. Nixons managerial approach, based on theories of public administration and finance, aimed to improve the management of intergovernmental programs by making government more efficient and responsive at all levels. Nixon emphasized devolution of power to the states by the sorting out of the functional responsibilities of various governmental levels. In his view, the federal government was responsible for levying taxes while the states were responsible for administering local spending. To this end, capacity-building programs were included in block grants. Uniform national benefits for welfare were proposed, entitlement spending and intergovernmental regulations expanded. Nixons policies were consistent with the theories of public finance.

Ronald Reagan, on the other hand, was highly skeptical of domestic governmental activism. He felt that Nixons model of mere managerial restructuring constituted insufficient reform. Reagan advocated reduction in governmental activism at all levels, encouraging private initiative and volunteerism. Breaking from Nixons approach of sorting out, he aimed at bringing taxation and spending functions together under the federal government to reduce uncontrolled spending by states. Reagan proposed a $90 billion plan to eliminate all federal aid programs and a corresponding 23% tax cut. The administrations domestic spending program deeply cut federal grants for state and local governments. Paradoxically, Reagan did maintain a safety net of programs for the poor, which grew during most of his presidency.

Gingrich attacked the redistributionist model of Reagan. He took special aim at cutting poverty programs, which had been supported during Reagans reign. He wanted to remake the welfare state into an opportunity society. By decentralizing power and decision making, he sought to reduce the size and reach of the federal government. The devolution of power to state and local governments was only a partial step. The bestowing of power to its origins, the citizens, represented true dispersal.

The intellectual basis of reform shifted across the past 25 years. Nixons reform agenda was guided by theories of public administration and finance, which aimed at restructuring intergovernmental relations on the basis of executive leadership, clear lines of authority and improved coordination. During the eras of Reagan and Gingrich, diminishing federal responsibility in redistributive programs indicated the shift from theories of public finance. The reforms of Gingrich show an increasing proclivity to the public choice theory, which emphasizes controlling public sector growth and non-interference in the market.

The decreasing difference between federal and state shares of total government revenues, modernization of state governments (in terms of strengthened institutional capacity), well balanced fiscal systems and increased representation of minorities support devolution. The move toward decentralization can be viewed as the decline of the nation state as a result of the interplay of political and economic factors. The decline of the nation state and the increasing demands of citizens from local governments has led to the creation of sub-national entities that are required to take on more responsibility for provision of goods and services than before, and hence demand greater local autonomy and policy devolution.