Americans have long revered the genius of the founders in devising the nation's system of federalism. It is easy to forget, however, that the real genius of the founders was not their ideology but their pragmatism. Federalism was not concocted so much as a sacred principle as a scheme to keep a young nation from spinning apart. The founders' genius lay in balancing competing tensions-in finding a strategy that could accommodate all 13 original colonies without putting the entire nation at social, economic, or military risk.
The same is true for the devolution movement of the 1990s. Pragmatism drives the movement far more than ideology, and the federal government faces a tough challenge. Public trust in government in general-and the federal government in particular-has plummeted. Citizens, quite simply, have lost confidence in the government's ability to get things done. In a 1997 public opinion poll, 42 percent of Americans could not name a single successful federal program in the last 30 years.
We can debate whether the government's performance is really that bad, but the public has lost hope that the federal government can successfully do much. The Challenger exploded, kids died after eating government-inspected hamburgers, fraud plagued Medicare, and the IRS abused taxpayers' rights. As the budget deficit shrank, the performance deficit grew.
Add to that the fiscal squeeze. Like most industrialized democracies, the United States hit the size-of-government wall in the 1980s. Citizens balked at paying higher taxes, but their appetite for government services scarcely shrank. Indeed, from mass transit to fast food, citizens demanded a better and safer world and they expected government to produce it.
What happened when declining trust in government, rising performance problems, shrinking enthusiasm for taxes, and steadily enlarging citizen expectations met? Washington policy makers discovered that the easiest way to solve their problems was to make the problems someone else's. Ending "welfare as we know it" meant giving it to the states. Making the streets safer meant that the federal government funded 100,000 cops-and then passed the tough job on to the cities.
Devolution thus proved more a pragmatic tactic than an ideological strategy. This scarcely means that the ideas don't matter. They do-but principally to provide an intellectual skin to devolution's pragmatic skeleton.
Moreover, devolution, privatization, and deregulation were not separate ideas flying in loose formation. Each has become a tool for the next. When the federal government made welfare reform a state problem, the states solved their problem by contracting with a complex network of for-profit and not-for-profit service providers. If welfare reform works in Milwaukee, for example, it will succeed because the state of Wisconsin has found a way to get six contractors-five local nonprofits and a for-profit company based in Virginia-to do what the federal government could not. Devolution works only if privatization works.
When the first generation of environmental policy bogged down in endless lawsuits and problems that command-and-control regulations couldn't touch, EPA devised new partnerships with the states to allow them to find new ways to reduce pollution. Some states worked on giving companies more flexibility in exchange for meeting tough performance standards. Other states experimented with emissions trading and other market-based tactics. Deregulation became devolution, and much devolution depended on privatization.
Thus, the transformation of American federalism runs far more subtly than Lowi suggests. Faced with tough problems that current government institutions seemed unable to solve, Americans cobbled together new tactics with broad strategic implications.
The states and cities might indeed prove more conservative decision makers, as Lowi argues. At the very least, concocting new techniques to reduce pollution or get welfare recipients jobs means building partnerships with the businesses who might pollute and the contractors who have to train welfare recipients and find them jobs. Devolution means doing business on a different level, and the norms of the players will surely if subtly shift the system's center of gravity.
On a deeper level, however, devolution, deregulation, and privatization have become inextricably linked-not only with each other but also with much of American society. What that really means is that even as Americans have cried out to shrink government, more of them have been pulled into doing the government's business and in having a direct stake-both social and economic-in how the job gets done.
Who, for example, runs the Medicaid program to provide health care to the nation's indigent? The federal government funds the program, but many states supplement the federal grant. Private doctors and nursing homes provide the services, and private contractors collect the bills, make the payments, and process the paperwork. In a devolved, deregulated, privatized system, the paradox is that the effort to shrink government has made almost everyone government's partner.
This makes the new millennium's globalization of government much different than the last one. It is ever harder to transform government ideology because government's operations have increasingly come to embody the ideology of the body politic. The body politic has become woven into the government's administrative fabric. Potomac policy-makers, meanwhile, have become enmeshed in high symbols far-removed from the real action of domestic policy, in the nation's state houses and city halls.
Reformers have not so much set these forces in motion to transform the ideology. They have struggled to solve pragmatic problems-and like the founders, their solutions have had powerful ideological implications. If we-as a nation and as players in the political system-wish a different ideological outcome, the approach lies not so much in shifting who makes decisions but in who can deliver results.
The federal government's performance deficit is enduring after the end of the budget deficit. It can regain leverage in domestic policy, and have a legitimate claim on shaping national norms, only if it can make a case for producing performance. The federal government's disinvestment in its administrative capacity makes shifting the locus of action back to Washington highly unlikely.