Rules and Regulations Affecting States
Federalism scholars have often referred to the 1960s and 1970s as a period of increased "regulatory federalism". Regulatory Federalism can be understood as a shift in the way in which the federal government interacts with the states. Specifically, it connotes a shift away from working with the states through financial incentives (such as grant subsidies) to the writing and enforcement of regulatory programs.
Measuring the real size or volume of regulatory activity is complicated. In 2014, two researchers at George Mason University published a new database that helps quantify federal regulation. Using a novel method they call "restrictions analysis", the authors created a groundbreaking tool that measures the volume of regulatory restrictions. In the figure below, we can see that the total number of restrictions in the Code of Federal Regulations had more than doubled from 1970 to 2019.
Beginning in the early 1980s, scholars and critics of the idea of "regulatory federalism" began to notice that regulatory activity had increased the size and reach of the federal government - often at the cost of subnational autonomy. In a 1981 report, the Advisory Council on Intergovernmental Relations concluded: "Over the past 20 years the federal role has become bigger, broader, and deeper-bigger within the federal system, both in size of its intergovernmental outlays and the number of grant programs, broader in its program and policy concerns, and the wide range of subnational governments interacting directly with Washington; and deeper in its regulatory thrusts and preemptive proclivities."
As ACIR had observed in the 1980s, grants and regulations are intertwined. The following graph provides users with a starting point for assessing the growth of grants and subsidies to states. Using data adapted from the Congressional Research Service, we present an overview of outlays for federal grants to states and local governments (selected years) from 1902-2018.
Grants and Subsidies
Outlays for Federal Grants to State and Local Governments 1902-2018
To learn more, and to access current data, we recommend users visit the Reg Stats resource at the Regulatory Studies Center, George Washington University. This collection is one of the best resources available online to find accessible charts and supporting data.
The following dashboard is a sample, adapted from data collected and organized by the Regulatory Studies Center. Our selection focuses on four proxies of regulatory activity and growth: Economically Significant Rules, Pages in the Federal Register, Agency Budget Outlays, and FTE Agency Personnel.
Regulatory Studies Center
George Washington University
How can we best analyze the effects of regulation - costs and benefits - over time? This is an especially thorny issue, which requires sophisticated analysis and nuanced qualitative interpretation. Regulatory Federalism raises similar questions about the Constitutional foundations of federal regulation itself. Is it possible to provide a measure the constitutionality of regulations over time?
To answer this question, regulations scholar and historian Clyde Wayne Crews has developed a novel, innovative Unconstitutionality Index. It measures the ratio of rules issued by agencies relative to laws passed by Congress and signed by the president.
The following chart is a recreation of Crews' innovative work. While Crews acknowledges that there are no clear trends in the data, and while he admits that there are "unavoidable complexities" in trying to measure the Unconstitutionality of rules, his work does provide empirical validation of the claim that there has been a significant shift in lawmaking from Congress to agencies.
Regulation and the Constitution
Rules by Agencies Relative to Laws Passed by Congress
We now turn to another set of questions, related to the effect of regulatory activity on American federalism - or the "balance" between federal and state governments. In 1999, President Clinton issued Executive Order 13132 on Federalism. The objective was to guarantee "the Constitution's division of governmental responsibilities between the federal government and the states." It did so by outlining nine "principles of federalism" (see Section 2) and then providing a series of criteria for federalism policymaking (see section 3).
How successful were efforts in the late 1990s to limit policymaking that might have had federalism implications? The following chart provides one measure. It indicates modest improvement, both in the efforts to measure regulatory impact, and in terms of limiting the upward trend in "regulatory federalism" since 2000. While there are good reasons to be skeptical of these measures, the data does indicate modest progress in the curtailing of policies with major federalism implications.
Rules and Policies with Federalism Implications
Efforts of reform, since the 1990s, appear to have had a modest impact. Our research team looked at the raw count of "rules affecting states" in the Unified Agenda of Federal Regulatory and Deregulatory Actions. Since 1997, there has been a moderate decrease in both measures of Rules Affecting States and Rules Affecting Local Governments.
Efforts at Reform
State Versus Local Government
1. Beginning in the early 1980s, federalism scholars have called attention to a shift from financial aid to states to an emphasis on federal regulatory programs.
2. In the aggregate, regulatory restrictions have increased steadily, with no sign of abatement. Grant outlays have also increased, with no clear indication of a slow-down or reversal in trend.
3. As indicated in this dashboard, however, we do not recognize an empirical shift away from the use of financial incentives and toward regulatory mandates.
4. Likewise, we do not find evidence for the hypothesis that regulatory mandates have increased, relative to grants and subsidies. We estimate a total of 1,140 combined rules in 1997 as compared to 526 total number of combined rules in 2018. Similar data from the Competitive Enterprise Institute (CEI) indicates a 29.4% decrease in rules affecting state governments and a 32.9% decrease in rules affecting local governments from 2010-2019.
5. None of this suggests that federal regulations have had no substantial effect on American federalism since the 1980s, when scholars began to identify trends in regulatory federalism. Despite the volumes of data and improvements in the monitoring of regulatory activity, we still lack reliable measures of the total regulatory costs.
6. Further empirical work is needed to monitor and assess trends in regulatory activity. As one scholar notes recently," Researchers are only beginning to understand the causes and effects of the federal regulatory system’s massive size and dramatic growth over the past four decades. Now, with better data, the effects of state regulation can be studied more comprehensively" - Patrick McLaughlin, QuantGov, Mercatus Center at George Mason University, Arlington, VA, 2020.
John Dinan, The State of American Federalism 2007–2008: Resurgent State Influence in the National Policy Process and Continued State Policy Innovation, Publius: The Journal of Federalism, Volume 38, Issue 3, Summer 2008, Pages 381–415, https://doi.org/10.1093/publius/pjn014
“Executive Order 13132 of August 4, 1999, Federalism.” Federal Register, title 3 (1999): 43255-43259.
"The Regulatory Plan and Unified Agenda of Federal Regulatory and Deregulatory Actions” Federal Register.
Regulatory Review, Office of Information and Regulatory Affairs, Office of Management and Budget
QuantGov is a sophisticated platform designed to help users sort through the enormous volume of federal, state, and local government policies, laws, regulations, court decisions, and other documents. Users interested in variation by state may want to consult the QuantGov "Total Restrictions" by state, which includes a "Federal Regulation and State Enterprise" (FRASE) index, which attempts to rank the 50 states according to the impact of federal regulation on the private sector.
These cards focus only on regulations affecting state or local governments. Analysts have collected data that compares rules affecting state/local governments with rules affecting small business (e.g., Ten Thousand Commandments An Annual Snapshot of the Federal Regulatory State Crews 2019).