Governmental Decentralization


In this Chapter additional governmental modifications to promote governmental innovation will be proposed. As was pointed out in Chapter 1, the rate of governmental innovation should be commensurate with the rate of private invention and innovation. And as was pointed out in Chapter 2, the current rate of governmental innovation is seriously deficient. Modifications to government were proposed in Chapter 8 to promote governmental innovation through a better estimate of the common weal. In this chapter modifications to obtain a better strategy for implementing governmental innovations will be proposed.


Federal Government Information Policy Political Action Committee Governmental Function Metropolitan Government 
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Notes and References 9

  1. 1.
    Governments below the level of the state possess only those powers directly or indirectly granted to them by the respective state government. This delegation of power is known as Dillon’s Rule after the judge ruling in City of Clinton v. Cedar Rapids and Missouri Railroad Company (1868)Google Scholar
  2. 2.
    Swiss, James E., 1984, Intergovernmental Program Delivery: Structuring Incentives for Efficiency, in Golembiewski, R. T. and A Wildavsky (eds), The Costs of Federalism, (Transaction Books: New Brunswick)Google Scholar
  3. 3.
    Andrews, Richard N. L., 1984, Economics and Environmental Decisions, Past and Present, in Smith, Kerry V. (ed), Environmental Policy under Reagan’s Executive Order, (University of North Carolina Press: Chapel Hill)Google Scholar
  4. 4.
    Boruch, R. F. and J.S. Cecil (ed), 1983, Solutions to Ethical and Legal Problems in Social Research, (Academic Press: New York)Google Scholar
  5. 5.
    The Advisory Commission on Intergovernmental Affairs, ACIR, has proposed five criteria for federal government decentralization: national purpose, economic efficiency, fiscal equity, political accountability, and administrative effectiveness. See: ACIR, 1981, An Agenda for American Federalism: Restoring Confidence and Competence, (A86), (US Government Printing Office: Washington). In this book no weight is placed on national purpose. The only consideration of equity is social inheritance and equal treatment before the law as modified by the need for experimental variation. Political accountability is considered separately in the general design of government and administrative effectiveness is considered part of economic efficiency.Google Scholar
  6. 7.
    Bowman, Ann O’M. and Richard C. Kearney, 1986, The Resurgence of the States, (Prentice-Hall: Englewood Cliffs)Google Scholar
  7. 8.
    See P. Strauss, 1979, Administrative Law, (The Foundation Press, Inc.: Mineola) Chapter 7 of reference 7Google Scholar
  8. 9.
    For an argument supporting this position see: Hoenack, Stephen A., 1989, Group Behavior and Economic Growth, Social Science Quarterly, pp 744–758. This line of reasoning is obviously in conflict with Olson, Mancur, 1982, The Rise and Decline of Nations, (Yale University Press: New Haven). Freedom of location and the implementation of a professional review would tend to promote competitive, growth oriented government.Google Scholar
  9. 10.
    For a discussion of alternative approaches, see: Siebert, Horst, 1987, Economics of the Environment, 2nd Edition, (Springer-Verlag: NewYork)Google Scholar
  10. 11.
    Harrington, W. and A. J. Krunpnick, 1981, Stationary Source Pollution Policy and Choices for Reform, in Peskin, H. M., P.R. Portney and A. V. Kneese (eds), Environmental Regulation and the U.S. Economy, (John Hopkins University Press: Baltimore) 16. Among the first to recognize the virtues of the complex urban political economy were Bish and Ostrom. See: Bish, R. L. and V. Ostrom, 1973, Understanding Urban Government, (American Enterprise Institute: Washington)Google Scholar
  11. 12.
    For a discussion of worker safety issues, see: Chelius, James R., 1977, Workplace Safety and Health: The Role of Workers’ Compensation, (American Enterprise Institute: Washington)Google Scholar
  12. 13.
    A good program of safety incentives can greatly reduce accidents and for some individual firms can be economically justified by the decrease in experience-rated workers’ compensation premiums. See: Kendall, Richard M., 1986, Incentive Programs with a Competitive Edge, Occupational Hazards, March, pp 41–45. However, Chelius and Smith performed a statistical study in which they did not observe an experience-rating effect on employer behavior. See: Chelius, James R and Robert S. Smith, 1983, Experience-Rating and Injury Prevention, in Worrall, John D.(ed), Safety and the Work Force, (ILR Press: Ithaca)Google Scholar
  13. 14.
    Indeed, if economic compensation is set too high, workers are encouraged to seek workers’ compensation as a substitute for working. See: Worrall, John D.(ed), Safety and the Work Force, (ILR Press: Ithaca) One the other hand compensation should be commensurate with the magnitude of the loss of income and be adjusted for inflation.Google Scholar
  14. 15.
    For an extensive discussion of alternative arrangements see: Salvas, E.S., 1987, Privatization: The Key to Better Government, (Chatham House Publishers, Inc.: Chatham)Google Scholar
  15. 18.
    This approach has been proposed by Demsetz, Stigler and Posner in separate papers. See: Demsetz, H, 1968, Why Regulate Utilities?, Journal of Law and Economics, vol 11, pp 55–66; Stigler, George J., 1968, The Organization of Industry, (Richard D. Irwin, Inc: Homewood); and Posner, R.A., 1974, The Appropriate Scope of Regulation in the Cable Television Industry, Bell Journal of Economics and Managements Science, Vol 5, pp 335–358.CrossRefGoogle Scholar
  16. 19.
    See Roth Gabriel, 1987, Private Provision of Public Services, (Oxford University Press: New York)Google Scholar
  17. 20.
    An extensive list is contained in reference 15.Google Scholar

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© Kluwer Academic Publishers 1993

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