Contemporary social federalism: Sorting, natural polarization, and policy devolvement

This article presents a theory of policymaking at the federal and state levels where individuals locate based on the differences in state policies. Individuals have an ideology that represents the strength of preferences for redistribution and social policy. States (and individuals) separate with one state spending on redistribution and attracting individuals with stronger ideology and another that provides a public good and attracts individuals with weaker ideology. Polarization results, is natural, and originates in the states. States have a preponderance of like-minded residents and can be politically noncompetitive. The federal government is divided and bargains over policy but inaction on social policy results, which devolves social policy to the states. Devolvement reinforces the sorting among the states and amplifies polarization. Devolvement is welfare-enhancing but divisive. Devolvement does not occur on federal spending. Recent Supreme Court decisions create opportunities for additional social policy devolvement.