Announcement
May 6, 2014

"American Federalism: How Well Does It Support Liberty?" by Richard Wagner

In "American Federalism: How Well Does It Support Liberty?," a new Mercatus Research paper, Richard Wagner examines the relationship between federalism and liberty. 

Professor Wagner writes: 

Democratic governments can be either national or federal in form. Within a national republic, a single government is the source of all taxation and regulation. That government might delegate some power to tax and regulate to lower units of government, but that delegation is the province of the higher government and can be reversed if that higher government so chooses. In contrast, within a federal republic people face at least two independent sources of taxation and regulation. For instance, US state and federal governments have the independent ability to tax and regulate their citizens. 
Federalism is generally described as a pro-liberty form of government. Yet it is surely reasonable to wonder how two sources of political power within the same territory can be more favorable to liberty than one. It turns out that the pro-liberty quality of federalism is a possible but not a necessary feature. This essay explores this two-edged quality of federalism to discern more clearly the relationship between federalism and liberty.

Democratic governments can be either national or federal in form. Within a national republic, a single government is the source of all taxation and regulation. That government might delegate some power to tax and regulate to lower units of government, but that delegation is the province of the higher government and can be reversed if that higher government so chooses. In contrast, within a federal republic people face at least two independent sources of taxation and regulation. For instance, US state and federal governments have the independent ability to tax and regulate their citizens. 

Federalism is generally described as a pro-liberty form of government. Yet it is surely reasonable to wonder how two sources of political power within the same territory can be more favorable to liberty than one. It turns out that the pro-liberty quality of federalism is a possible but not a necessary feature. This essay explores this two-edged quality of federalism to discern more clearly the relationship between federalism and liberty.

Read the full paper at mercatus.org.