Does the logic of collective action explain federalism doctrine?

• Author: Huq, Aziz Z.
• Position: III. Collective Action and the Case for National Power Revisited A. The Weak Collective Action Case for National Power 2. Noncoercive Solutions to Interstate Collective Action Problems through Conclusion, with footnotes, p. 261-302

2. Noncoercive solutions to interstate collective action problems

   The second reason to reject a single logic of collective action turns on the existence of noncoercive solutions to states' collective action problems of the kind intimated in Part II.C. As Cooter and Siegel rightly observe, one such tool is the interstate compact. (221) They dismiss the utility of such agreements, however, citing the putative difficulty of securing unanimity among any numerically large number of participants. (222) They also decline to discuss other possible modalities of cooperation. Yet both compacts and other non-national government-based forms of state-to-state cooperation merit more than passing attention as potential solutions to collective action problems.

   There are three ways in which states voluntarily coordinate without federal coercion. First, states can align their regulatory policies to yield collective goods without any formal mechanism via an informal process of learning or policy diffusion. Empirical studies of smoking bans, welfare programs, teacher qualification rules, same-sex marriage laws, and other regulations identify "robust patterns of policies and institutions spreading from ... state to state." (223) Diffusion of this sort can generate legal uniformity, eliminating externalities and ensuring wide adoption of successful policies. (224) Diffusion overcomes a collective action dilemma because the production of new state-level policies is not costless. Rational states have an incentive to refrain from innovation because they will not be able to capture all its benefits. Instead, they prefer to free ride on the innovation of others. Despite this free riding problem, a significant amount of diffusion is observed in practice. Like many other collective action-related norms, the diffusion mechanism operates through observation, imitation, or economic pressure--and not federal coercion. (225) Second, intergovernmental organizations such as the Uniform Law Commission (ULC) can serve as institutional loci for the development of"rules and procedures that are consistent from state to state" in areas where "new technology wears away geographical borders and matters of law implicate more than one state." (226) The ULC itself defies collective action expectations. Despite being voluntary (such that any state could free ride on its efforts), every state is a member. (227) The ULC "has proposed uniform laws in virtually every area of state law," some of which--e.g., the Uniform Commercial Code--have been adopted "in nearly every jurisdiction." (228) Nor is the ULC unique. The Multistate Tax Commission (MTC) also operates free of national governmental imprimatur and yet counts forty-seven states as members. (229) Its function is to issue fiscally consequential rules for apportioning and allocating tax receipts from multistate taxpayers--hardly a matter with low stakes for states.

   Yet another example is the national organization formed by state attorneys general, which has overcome collective action hurdles to effectively deploy federal court litigation as a policy tool. (230) The National Association of Attorneys General has run a Supreme Court project since 1982 to coordinate state litigation efforts and to supply technical aid to litigators. (231) In addition, it "play[s] an important networking and lobbying role" and in that way has increased the volume of state participation in federal court litigation. (232) Seeking injunctive relief in a federal court of appeals--or, better yet, the U.S. Supreme Court--is a way for a subset of states to secure a policy benefit for most or all states that would otherwise be beyond the reach of states operating within the metes and bounds of the national political process.

   Recent, high-profile constitutional cases demonstrate the potency of legal action in this vein by a minority of state attorneys general. It is thus worth recalling that one of the first legal challenges to the health care law was filed by a state attorney general, and many state attorneys general remained deeply involved in the case until its finale. (233) In the ultimate Supreme Court judgment, a minority of states secured a better deal on Medicaid funding than they were able to during the negotiating process in Congress. (234) The following Term, a different coalition of states was able to secure release from a key element of the Voting Rights Act of 1965, a boon that had been denied by large, bipartisan margins in Congress in 2006. (235)

   Of course, in the absence of a federal statute that vests states with the right to sue, the expected value of cooperation among state attorneys general is often a function of the Court's federalism jurisprudence--and one of the ultimate goals of this study is to interrogate the latter's generosity. I thus invoke the state attorneys general example here solely to illustrate the existence of voluntary collective action. If federalism jurisprudence were scaled back, that value might diminish. It would not vanish entirely, however, because of the likely continued existence of statutory causes of action for states to leverage.

   To be sure, these voluntary organizations and ad hoc coalitions of states are no panacea for those concerned about excessive centralization by the national government. They do not impose binding constraints on participants. In consequence, it may be costly for participants to detect or punish infractions, as Cooter and Siegel rightly observe. Nevertheless, such organizations might still valuably diminish the frictions of collective action in three ways. First, by reducing interstate variance in legal regimes, they lower the epistemic costs of interstate commerce, thereby fostering the national free market (itself a public good). Second, they mitigate the risk of conflicting or inconsistent regulation that also might impede commerce. Third, uniform laws can mitigate the prisoners' dilemma mechanism implicit in interstate competition that induces a race to the bottom. (236)

   Finally, formal interstate compacts themselves provide a surprisingly robust alternative to national legislative action due to critical mass effects. (237) Cooter and Siegel identify their unanimity rules as a crippling constraint on the expansion of interstate compacts, suggesting that "[t]he probability of coopera tion approaches zero as the number of states that must agree unanimously exceeds, say, ten." (238) This, however, may be excessively pessimistic, even without accounting for the far higher participation rates in the ULC and the MTC. There has been a "sharp increase in the number of [interstate] agreements during the past six decades," albeit "with little attendant public visibility." (239) Some of these accomplish policy change without any approving congressional imprimatur. The Regional Greenhouse Gas Initiative (RGGI), for example, was initially proposed by New York Governor George Pataki in April 2003 and weaves nine northeastern states into a regional cap-and-trade program designed to mitigate carbon dioxide emissions from regional power plants. (240) The RG operates without congressional authorization, (241) even though interstate compacts of its ilk generally displace state law. (242) Viewed narrowly through the lens of collective action federalism, "[p]recisely why the states want to participate in RGGI is unclear--because greenhouse gases do not have localized effects, the states do not seem to receive any tangible benefit from this program even though they bear the costs." (243) Yet the RGGI might be parsimoniously explained by the heterogeneous political payoffs to the leaders of participating states with significant voting blocs of environmentally conscientious constituents. Other interstate compacts wanting national authorization include interstate taxation, oil and gas extraction, and mining. (244)

   To be clear, my claim here is not that either informal policy diffusion or institutions (i.e., multistate commissions and informal compacts) provide comprehensive solutions to all of the states' collective action dilemmas. In some cases, diffusion surely causes rather than cures collective action problems. Diffusion might even precipitate a "foul dealer" problem if one state can exploit an equilibrium created by otherwise unanimous concert. (245) The salience of volun tary solutions lies not in their comprehensiveness but rather in this: they demonstrate that mere identification of a barrier to states' collective action is inadequate guidance respecting the need for federal regulation. It is also necessary to consider the availability of one of several potential noncoercive alternatives that are observed arising in practice among the several states.

3. Comparing state and federal collective action

   Arguments for greater national power based on states' inability to act collectively are essentially comparative in nature. (246) More specifically, they rest on an assumption that collective action barriers confronting states will, at least as a general matter, tend to be lower inside the national political process than outside. But it is not at all clear that this assumption always holds true, or even represents a generalization that captures the empirical realities of states' promotion of federal values. It is well known that a federal bill must pass through at least three vetogates (bicameralism and the veto), and perhaps five (including two supermajority votes when the President opposes a law), to become law. Running this gauntlet requires that a bill appeal to diverse constituencies. On the one hand, the floor votes empower median legislators. (247) On the other hand, both Houses have committees, which not only resolve interbranch informational asymmetries and cycling problems (248) but also play an agenda-setting role, and decide the issues that reach a floor vote. (249) The crucial committee members' preferences are likely to be distinct and distant from those...