Adverse Selection, Political Parties, and Policy Delegation in the American Federal System

We extend research on the nexus of federalism, policy delegation, and American politics by asserting that partisan politics at both the national and subnational levels of government matter when explaining variations in U.S. federal intergovernmental policymaking. Specifically, we maintain that national level institutions not only respond to the partisan composition of state level institutions in a direct manner, but also use this information as a means to mitigate adverse selection problems that they confront when making policy in a federal system. Using a novel data set of 459 U.S. public laws spanning the 1947--98 period, we uncover support for the importance of vertical partisan institutional relationships on policy delegation in American federalism. The conclusions drawn from this study highlight the importance attached to vertical institutional relationships for understanding policy delegation by showing how state governments influence the balance of policymaking authority in the United States, even when formal decision-making authority resides at the national level. Copyright 2005, Oxford University Press.