Policy Conflict and the Distribution of Government Capacity

• In Event: Political Competition and Conflict

Abstract

I present a model of democratic choice over both policy and government capacity, i.e. the ability to implement policy, at two levels of government: state and national. Policy preference disagreement among citizens in a pluralistic society can act as a constraint on government capacity. The model provides partial answers to two key questions of political development and political federalism respectively: whether states develop capacity in particular policy areas and whether that capacity is geographically centralized.

I identify four broad categories of the distribution of government capacity: centralized, shared, localized, and no capacity. The shared category reflects many modern federal systems where (supra-)national and state governments make and implement law in the same policy areas. Policy conflict at either the state or national level tends to undermine the development of capacity at that level.

Capacity in a given policy area may interact between the state and national levels. The form of that interaction is critical to the distribution of capacity and how it responds to changes in population policy preferences. When capacities are substitutes (or “crowd [each other] out”), policy conflict at one level encourages capacity creation at the other. When capacities are complements, the same policy conflict deters that capacity.

As a result, the geographic distribution of policy preferences among states can affect national capacity beyond national-level policy conflict. Of particular interest, holding national policy conflict fixed, states that are more internally homogeneous in their policy preferences promote greater national capacity under complementary capacities. Contrary to conventional wisdom on the relationship between the distribution of and absolute amount of government capacity, capacity is not necessarily maximized under centralized government in equilibrium. National capacity alone can be higher under a shared system without considering state-level capacity. In diverse nations with crowd-out between government levels, state governments can provide greater capacity than a central government.

Author

• Thomas Choate, George Washington University