Bulletin n. 1-2/2014
November 2014
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
    • Brian Galle
    Does Federal Spending Coerce States? Evidence from State Budgets
    in Northwestern University Law Rewiev , vol. 108, issue 3 ,  2014 ,  989-1027
    According to a recent plurality of the U.S. Supreme Court, the danger that federal taxes will “crowd-out” state revenues justifies aggressive judicial limits on the conditions attached to federal spending. Economic theory offers a number of reasons to believe the opposite: federal revenue increases may also buoy state finances. To test these competing claims, I examine for the first time th e relationship between total federal revenues and state revenues. I find that, contra the NFIB v. Sebelius plurality, increases in federal revenue—controlling, of course, for economic performance and other factors—are associated with a large and statistically significant increase in state revenues. This version of the study provides extensive background explanations of underlying economic concepts for readers unfamiliar with the prior public finance literature.
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