Authors: Mildred Warner*, Cornell University
Topics: Economic Geography, Political Geography, Urban and Regional Planning
Keywords: State rescaling, fiscal federalism, austerity, preemption
Session Type: Paper
Start / End Time: 9:55 AM / 11:35 AM
Room: Forum Room, Omni, West
Presentation File: No File Uploaded
The Great Recession provided the fiscal crisis necessary to support an austerity narrative that calls for shrinking the state. However, recent works in the US and UK observe a broader process of “state rescaling” in which higher scales of government are downloading responsibility for redistribution to lower scales in the government hierarchy. Using focus groups and government finance data, we explore three areas of US state rescaling at the subnational level: revenue tools, expenditure responsibilities, and policy authority. Expenditure responsibilities, especially social welfare, have been devolved to the subnational level, while local revenue tools and policy authority are preempted. This decoupling of responsibility and power is cracking the foundations of fiscal federalism. At the behest of corporate-legislative coalitions, subnational state governments are shrinking local capacity and authority to govern. We show how these corporate-legislative coalitions, most notably the American Legislative Exchange Council (ALEC), take advantage of the three-tier federal structure – using the subnational state tier to undermine local authority and achieve policy changes not yet possible at the federal level. This is not state shrinkage; it is a fundamental reshaping of the subnational state to the detriment of democracy and the social contract. This abstract is part of the special session on The Shrinking State, being organized by Cambridge Journal of Regions, Economy and Society.