Downtown Detroit: local government has failed in the city
Can Britain go too far in empowering local governments? Strong mayors can be innovators who better understand the needs of their diverse constituencies, but the American experience demonstrates the downside of devolution as well as the upside.
In a sense, the American revolution was an early attempt to devolve power from London to local jurisdictions, and since 1783, the United States has typically had far more local authority than Britain. Our local jurisdictions typically play a key role providing, and often funding, some of the most critical services, including schools and police. Many of our cities have extremely strong mayors, such as Michael Bloomberg in New York City or, in the past, the two Richard Daleys (father and son) in Chicago.
The American experience illustrates many of the benefits of local control. Eighty years ago, a Supreme Court justice referred to the states as “laboratories of democracy,” and we still see governmental innovations appearing in enterprising cities and states. Milwaukee pioneered a school voucher programme in 1990, helping generate support for choice throughout the country. Boston and New York today have crowd sourcing apps that can improve interactions with the public sector. The state of California has been a pioneer on green issues.
Moreover, smaller jurisdictions often face limits, like balanced budget rules and the threat of companies leaving the area, which compel them to be more pragmatic than national government. While Democrats and Republicans do different things in Congress and the White House, Joseph Gyourko and Fernando Ferreira of the University of Pennsylvania find that leaders from the two parties enact essentially identical budgets in cities.
But there are downsides to local control. Often cities and towns act parochially. The rail service between Boston and New York is far slower than it should be because Connecticut refused to allow the rail lines to be made more direct. Localities often bar housing developments allowing outsiders to move in, especially if these might house the poor. And when localities are financed with federal dollars, they often spend wastefully because someone else is footing the bill. Detroit’s Monorail, which glides over essentially empty streets, is the legacy of funding local transit systems with national taxes.
Yet there are also grave problems with expecting localities to pay for all of their services. Like Britain, America is a nation of great economic inequality. Poorer places…