Market-preserving federalism
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Market-preserving federalism refers to a type of federalism where the federal government has limited authority to regulate markets. In a market-preserving system, each state or province generally maintains primary authority over economic policy within its jurisdiction. The national government typically only retains the power to regulate trade between states.[1]
Background
Professor Barry R. Weingast credits market-preserving federalism for the economic growth seen in England in the 18th century, in the United States in the 19th and 20th centuries, and in China after that.[2] He argued that federalism "limits the ability of the state to confiscate wealth" and helps "commit the state to honor economic and political rights."[2]
Professors Jonathan Rodden and Susan Rose-Ackerman question the political theory of market-preserving federalism and argue that "under a range of plausible conditions, federal systems will not bear out Weingast's predictions. When they do not, a move to greater decentralization may reduce rather than increase efficiency."[3]
See also
External links
Footnotes
- ↑ Mercatus Center, "A State and Local Federalist Relationship Must Be Market-Preserving," accessed August 9, 2021
- ↑ 2.0 2.1 Journal of Law, Economics, and Organization, "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," 1995
- ↑ Virginia Law Review, "Does Federalism Preserve Markets?" 1997
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