The US Constitution tries to preserve state prerogatives by enumerating the powers of the national government and preserving other powers for the states. But the interconnected nature of our modern economy continuously pits state and national governments against one another in the regulation of such issues as energy and the environment, banking and finance, health care, and many others. And it is rarely clear where states should give way to national authority, when power can be shared and balanced, and how states and the national government can act to provide checks and balances against one another.
The Workshop on Federalism and the Economics of Regulation provided a review of the federal system created by the Constitution’s framers and a discussion of its evolution over time. It also provided fresh insights into the way the practice of modern federalism complicates the challenge of effective regulation and suggest ways to structure the balance of power and sharing of jurisdiction to improve overall regulatory effectiveness.