Cooperative federalism, the reigning conception of American federalism from about 1954 to 1978, was a political response to the policy challenges of market failure, postwar affluence, racism, urban poverty, environmentalism, and individual rights. Having social equity as its primary objective, cooperative federalism significantly transformed American society, but when the conditions underlying cooperation changed during the 1970s, the pressure to expand national power inherent in cooperative federalism gave rise to coercive federalism, in which the federal government reduced its reliance on fiscal tools to stimulate intergovernmental policy cooperation and increased its reliance on regulatory tools to ensure the supremacy of federal policy. The erosion of federal fiscal power and of constitutional and political limits on federal regulatory power in the 1970s and 1980s has produced a more coercive system of federal preemptions of state and local authority and unfunded mandates on state and local governments. This system undermines governmental responsibility and public accountability; yet state and local governments may not possess sufficient constitutional or political leverage to alter the system. Thus cooperative federalism has not been replaced by a new consensus on federalism. In light of contemporary conditions, a new consensus may have to be forged from elements of cooperative equity, competitive efficiency, and dual accountability.
Much attention has been focused on devolution of federal functions to states and localities; yet, little devolution is evident. Many forces are generating interest in devolution, but opposition remains potent. Meanwhile, a bipartisan process of de facto devolution involving a defunding of urban programs has been under way for two decades. De facto devolution has been driven predominantly by a shift in federal policy making from places to persons whereby the political incentives for federal officials now lie more in responding to the rights and interests of individuals than to the prerogatives and interests of state and local governments. This article, therefore, examines forces for and against devolution; the devolution records of Congress, the presidency, and the Supreme Court; de facto devolution in the context of federal emphases on persons; and implications for cities.
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