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Adverse Selection, Political Parties, and Policy Delegation in the American Federal System

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  • George A. Krause
  • Ann O'M. Bowman

Abstract

We extend research on the nexus of federalism, policy delegation, and American politics by asserting that partisan politics at both the national and subnational levels of government matter when explaining variations in U.S. federal intergovernmental policymaking. Specifically, we maintain that national level institutions not only respond to the partisan composition of state level institutions in a direct manner, but also use this information as a means to mitigate adverse selection problems that they confront when making policy in a federal system. Using a novel data set of 459 U.S. public laws spanning the 1947--98 period, we uncover support for the importance of vertical partisan institutional relationships on policy delegation in American federalism. The conclusions drawn from this study highlight the importance attached to vertical institutional relationships for understanding policy delegation by showing how state governments influence the balance of policymaking authority in the United States, even when formal decision-making authority resides at the national level. Copyright 2005, Oxford University Press.

Suggested Citation

  • George A. Krause & Ann O'M. Bowman, 2005. "Adverse Selection, Political Parties, and Policy Delegation in the American Federal System," Journal of Law, Economics, and Organization, Oxford University Press, vol. 21(2), pages 359-387, October.
  • Handle: RePEc:oup:jleorg:v:21:y:2005:i:2:p:359-387
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    File URL: http://hdl.handle.net/10.1093/jleo/ewi021
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    Cited by:

    1. Christian Bjørnskov & Niklas Potrafke, 2013. "The size and scope of government in the US states: does party ideology matter?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(4), pages 687-714, August.
    2. Niklas Potrafke, 2017. "Government Ideology and Economic Policy-Making in the United States," CESifo Working Paper Series 6444, CESifo Group Munich.

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