Public Management Research Association
Journal of Public Administration Research and Theory, Inc.
The Devolution Revolution in Intergovernmental Relations in the 1990s: Changes in Cooperative
and Coercive State-National Relations as Perceived by State Administrators
Author(s): Chung-Lae Cho and Deil S. Wright
Source: Journal of Public Administration Research and Theory: J-PART, Vol. 14, No. 4 (Oct.,
2004), pp. 447-468
Published by: Oxford University Press on behalf of the Public Management Research Association
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JPART14:447-468
in
Revolution
in the
1990s:
Relations
Intergovernmental
Coercive
in Cooperative and
Changes
as
Perceived
State-National Relations
by
Administrators
State
The
Devolution
Chung-Lae Cho
Deil S. Wright
Universityof NorthCarolina,Chapel Hill
ABSTRACT
relationsin
The "devolutionrevolution"was a centralissue in Americanintergovernmental
the 1990s. Judgmentsabout the outcomes of intergovernmentalpolicy changes varied
among scholars of Americanfederalism.Some argued that intergovernmentalrelations
shifted substantiallyin the directionof devolutiontowardthe states in the 1990s. Others
were skepticalabout the existence or degree of devolutionduringthe decade. This essay
examines shifts in state-national relationsduringthe 1990s. The research centers on
nationalfiscal and regulatoryinfluence on the states. Data from the 1994 and 1998
AmericanState Administrators
Projectsurveyswere used to measure state agency heads'
perceptions of national influence on state governments and administrativeagencies.
factoranalysiswas employed to confirmthe findingthat perceived national
Confirmatory
fiscaland regulatoryinfluenceschangedin the 1990s. Therewas an identifiableand distinct
decline in the aggregateand averagelevels of nationalfiscaland regulatoryinfluencefrom
1994 to 1998. Justas nationalinfluenceaccruedgraduallyacrosspriordecades, it appeared
to decline graduallyin the 1990s. The shift was more an evolution than a revolution.
there was a clearand noteworthyshifttowardconvergencein perceptionsof
Additionally,
nationalfiscaland regulatoryinfluence.Thisempiricalfindinglends credenceto the "coercive
cooperation"phrasecoined by Elazarto describethe changesof state-nationalrelationsnear
the end of the twentieth century.Forpracticingpublicadministratorsone centralfinding
emerges from this analysis.The turbulentwaters of intergovernmental
management have
become increasinglymurky.The blending of fiscallybased cooperationwith regulatoryrelatedconflict(or coercion)callsfor greatlyenhanced managementskills.
We wish to acknowledge supportfrom the EarhartFoundationof Ann Arbor,Michigan,and the Odum Institutefor
Researchin Social Science of the University of North Carolinaat Chapel Hill. We also express appreciationto
several anonymousreferees who offered constructivecomments on an earlierdraftof this essay.
doi:10.1093/jopart/muh031
Journalof PublicAdministrationResearch and Theory,Vol. 14, no. 4
? 2004 Journalof PublicAdministrationResearch and Theory,Inc.;all rights reserved.
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448
Journalof PublicAdministrationResearchand Theory
Few words relevant to intergovernmental relations were featured more recently and
frequently than devolution or devolution revolution. In the 1990s a series of congressional,
presidential, andjudicial actions was taken to shift policy responsibilities and discretion to
state governments and also to limit the national government's power (Cole, Hissong, and
Arvidson 1999). These decisions by national actors had important consequences for
elected and appointed administrative officials at the state and local levels of government.
Indeed, past patterns as well as the overall landscape shifted. In few places were the
changes more significant or the administratorsmore strategic than in the case of executives
heading state agencies. These central actors are the key respondents and the intergovernmental focus of this essay.
Scholars and practitioners of intergovernmental relations in the 1990s differed in
their assessments of national policy actions. Nathan (1996) suggested that "major
changes" occurred, ones approaching those of the Great Society in the 1960s (see also
Stanfield 1995, 2206). Kincaid offered a different judgment: "Devolution is plodding
along at a turtle's pace while centralization is still racing ahead at a rabbit's pace" (1998,
13). He noted that devolution had been accompanied by significant federal regulations
and thus the states operated under many new federal rules and regulations. Ellwood
(1998) likewise argued that even welfare reform, where significant devolution seemed to
occur, was not a substantial shift because the discretion Congress gave to design and
implement welfare programs was restricted by regulations involving work requirements
and time limits.
Debate about the effects of devolution policies reflects sustained and systematic
efforts to understandnew developments in intergovernmentalrelations during the 1990s.
What is an accurate picture of recent American intergovernmental relations? Has the
paradigm of American federalism shifted? Was (is) there a single paradigm and
predominant theme that best describes the world of intergovernmental relations for the
practicing public administrator?Did the center of policy responsibilities, authority, and
power move away from the national government toward state and local governments? The
purpose of this analysis is to provide provisional and partial answers to these questions. We
pursue these answers with central attention devoted to the fiscal (cooperative) and
regulatory (coercive) dimensions of devolution as they influence and are perceived by the
heads of over 2,000 administrative agencies across the 50 states. Their assessments were
obtained from surveys conducted in 1994 and 1998.
AND CONFLICTUAL/COERCIVE
FEDERALISM
COOPERATIVE
For more than two centuries a wide-ranging debate has been centered around the basic
character of American federalism. The elementary question is: What pattern dominates
federal (state-national) relationships, conflict or cooperation? For many scholars and
public officials a conflictual pattern has historically been seen as dominating intergovernmental relationships for almost two centuries. This theme receives strong
resonance today, as witnessed by Gormley's observation: "If intergovernmentalconflicts
have all the elegance of a barroombrawl, that is because they involve such a wide variety
of disputes. The disputes pit one level of government against another,one ideology against
another, one political party against another, and one issue network against another. This
makes for a hopelessly tangled melange of friends and enemies" (1989, 173). Revisionary
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ChoandWright DevolutionRevolutionin IntergovernmentalRelationsin the 1990s
thinkingwitha focus on cooperationbeganseveraldecadesago, especiallyduringtheNew
Deal andGreatDepression.Froma legal standpointCorwin(1950) notedthe "passingof
dualfederalism."Froma partysystemanda politicalperspectiveGrodzins(1960a, 1960b,
1966) explored in considerabledepth the underlying themes of collaborationand
cooperationaroundthe phrase "the New American System." Administratively,Key
(1937) and others (Clark 1938) confirmedmajor changes in state-nationalrelations.
Elazar (1962) also gave particular attention to intergovernmentaladministrative
collaborationand documentedpreviouslysubmergedandunrecognizedcooperativerelations throughoutthe nineteenthcentury. Several observerswho focused on patterns,
relationsoverthe pasthalf-century
periods,or phasesof federalismandintergovernmental
tendedto highlightrelationshipsin which conflictwas frequentlyovershadowedby cooperation(Elazar1990;Peterson,Rabe,andWong 1986; Sundquist1969;Walker1981;
Wright1988).
Startingin the 1970sand 1980s,butescalatingin the 1990s,the contentas well as the
tenorof the conflict-cooperationdebatechanged.This shift was denotedchiefly(butnot
exclusively) by the substitutionof the word coercion for conflict. A leader in the
articulationof this conceptualshifthas been Kincaid(1990, 1993, 1996, 1998, 1999),but
manyothersfollowed (Cho andWright2001; Walker2000; Wright1997).An important
componentof this tilt towardcoercioncomes fromthe onset of "regulatoryfederalism"
Relations 1984, 1993). For practicing
(Advisory Commission on Intergovernmental
publicadministrators,
regardlessof theirposition(s)in the intergovernmental
system,the
adventof regulatoryfederalismrepresenteda majordepartureif not a sea changein their
workingworld.
Two quotesfromElazarhelp anchorthe pointandframethe largeradministrative
and
context
for
this
in
the
1980s
Elazar
observed
that
"the
organizational
essay. Writing
Americanfederalsystemmay be passinginto a new phase,one in which federalgrants,
while remainingimportant,will no longerset the tone in intergovernmental
relations....
Now themove seemsto be in the directionof new relationshipsin the fieldof governmental
regulation"(1984, 252). At the startof the followingdecade,Elazar(1990, 13) notedthat
thehistorictensionbetweenconflictandcooperationhadblendedintoa periodof "coercive
cooperation."Thesetwo contrasting,paradoxical,andblendedconcepts(cooperationand
coercion)arethe pivot pointsaroundwhichthis essay turns.
What patterns and shifts were present between these two intergovernmental
dimensionsin the 1990s? What was the extent of any changes?What do the patterns,
shifts, and findingsfromthis analysistell us aboutthe characterand contentof coercion
and cooperationon the contemporaryintergovernmental
scene?Whatmessagesdo these
shifts send to public administratorswho operate in this reconfigured,complex, and
environment?
Thesequestionshighlightandouranalysisrespondsto
coercive/cooperative
Nathan'sobservation,"Thescholarlycommunitywill be challengedto presenta clearand
understandable
pictureof the natureandpatternsof stateandlocal responsesto thisnewest
of new federalisms"(1996, 13).
Cooperative State-National Relations
Since the Great Depression cooperative intergovernmentalrelations have expanded
primarilythroughfederal grants-in-aid.Although federal aid to the states (and local
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Journalof PublicAdministrationResearchand Theory
governments) has sometimes declined in relative terms (and in absolute dollars during the
Reagan era), national sources still constitute about 20-25% of state/local revenues
(O'Toole 2000). Grants-in-aid have promoted not only cooperative intergovernmental
relations but also varying degrees of national influence over state and local governments.
Federal aid, however, has fostered a framework that has been commonly characterized as
a bargaining, negotiation, mutual adjustment process in which intergovernmental
managers/administratorsplay key roles (Agranoff 1986; Agranoff and Lindsay 1983;
Ingram 1977; Peterson, Rabe, and Wong, 1986; Wright 1990). The national government's
impact on state and local governments has expanded through the conditions attached to
grants-in-aid. One clear result is the presence of influence through interdependent
cooperative relationships among different levels of government.
This fiscal dimension of intergovernmental relations has been a prominent and
perhaps the most significant traditional way of studying cooperative American
federalism. O'Toole argues, "There may be no better way of seeing the interdependence and complexity of today's intergovernmental system than by following the money
trail, or examining the fiscal aspects of the network" (2000, 191). Agency administrators' views about the effects of federal aid on state programs and policies constitute inviting avenues for understanding state-national cooperative relations (Wright
1968).
Coercive State-National Relations
From the late 1970s onward a new era emerged as a prominent feature of
intergovernmental relations. The national government's reliance on grants appeared to
decline as its reliance on regulatory tools increased (Kincaid 1990). The U.S. Advisory
Commission on Intergovernmental Relations (ACIR) observed, "By the late 1970s, the
cooperative tradition was being challenged by the rise of several new and more intrusive
techniques of intergovernmental regulation" (1993, 7). The ACIR listed four major
regulatory policy tools: direct orders, crosscutting requirements, crossover sanctions, and
partial preemption.
Regulatory intergovernmental relations are distinct from conditions attached to
federal aid, although the boundaries between the two are sometimes blurred, especially at
the margins. The conditions attached to federal aid "run with the money." Regulation,
however, tends to be independent of federal aid. The nature of regulation or coercive
federalism is "mandatory" and rests on the fundamental legal authority of the national
government (ACIR 1984). Conlan noted this feature of coercive federalism by observing
that "intergovernmental mandates and preemption offer the national government cheap
policy tools for continued policy activism under the federal budgetary constraints"
(1991, 44).
By the 1990s the issue of regulatory federalism drew national, state, and local
intergovernmental actors' attention. Passage of the Unfunded Mandate Reform Act of
1995 by the 104th Republican Congress was symbolic and noteworthy legislation designed
to counteract the escalation of federal regulation on states and local governments (Posner
1997, 1998). Beside mandates, congressional preemption statues and U.S. Supreme Court
interpretations constitute major facets of national regulation. An ACIR (1993) study
documented the passage of various types of preemptions. The numbers for recent decades
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Choand Wright DevolutionRevolutionin IntergovernmentalRelationsin the 1990s
were as follows: 1960s, 45; 1970s, 110; 1980s, 100; 1990s, 120 (estimated). State/local
public interest groups were intensely concerned about the level of preemption activity.
They organized systematic reporting services on congressional actions (Arnold and Plant
1994). The Preemption Monitor published quarterly by the National League of Cities is
only one example.
The rise of intergovernmentalregulation offered a strategic opportunityto query state
agency heads about the effects of national regulations on their respective states and
agencies. Identical questions in 1994 and 1998 surveys elicited the perceived impact of
national regulatory actions. A concerted effort was made to cover broad but systematic
aspects of regulatory (or coercive) federalism.
A PARTICIPANTS'
RELATIONS
PERSPECTIVES
APPROACHTO INTERGOVERNMENTAL
Anderson defined intergovernmental relations as "an important body of activities or
interactionsoccurringbetween governmentalunits of all types and levels within the federal
system .... It is human beings clothed with office who are the real determinersof what the
relations between units of governments will be. Consequently the concept of
intergovernmental relations necessarily has to be formulated largely in terms of human
relations and human behaviors" (1960, 3-4). Following Anderson (1960) and Weidner
(1960) we address state-national cooperative (fiscal) and coercive (regulatory)relations by
exploring administrators'perceptions of national fiscal and regulatory influences on states
in the 1990s. Among the several state-level intergovernmentalactors we centered attention
on state administrators.Two rationales justify this administrative focus.
First, state administratorsare on the front lines of intergovernmental relationships;
they are among the most knowledgeable reporters and judges of changes in intergovernmental relations. For instance, during the early 1980s when new intergovernmental
policy instruments emerged and were not fully recognized, state and local government
administratorswere among the firstto notice the intrusiveness of the new federal regulations
(Conlan 1998, 192). State agency heads, in other words, are centrally and strategically
positioned to view and assess the dynamics of state-national relationships.
Second, Schneider, Jacoby, and Coggbum reinforce this attention to state
administrators. They note that "bureaucratshave a significant impact on the ways that
governmental policies impinge on American citizens. This is particularlytrue at the state
level. Administrators in state agencies have wide latitude to make vital decisions in
importantpublic programs.And yet, surprisinglylittle is known about this process" (1997,
240). An enhanced understanding of state bureaucrats (agency heads) is essential given
their critical roles in state governance, their key roles in intergovernmental interactions,
and the general resurgence of the states in domestic policymaking. More generally, the
prominence and influence of public administrators/managersin intergovernmental interactions, whether conflictual or cooperative, have generated the concept and significance of intergovernmental management (Agranoff 1986; Wright 1990).
The reliance on administrators' perceptions (or attitudes) as an intergovernmental
indicator is one of the distinct approaches in the study of American federalism (Anderson
1960; Glendening and Reeves 1977; Rosenthal and Hoefler, 1989; Weidner 1960; Wright
1988). What intergovernmental actors see and how they respond within the framework
of their perceptions about the organizational world are an important dimension of
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451
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Journal of Public Administration Research and Theory
intergovernmental reality.' This point of view is supported by Weick's observation,
"Reality is selectively perceived, rearrangedcognitively, and negotiated interpersonally"
(1979, 164). Organizations or people "socially construct" their own realties, which then
constrain their actions (Ring and Van de Ven 1989; Weick 1979, 1995,2001). State agency
heads, as intergovernmentalactors, create and interprettheir own organizational and intergovernmental environments. Pressman (1975) argued that intergovernmentalparticipants
use simplified images of each other to make sense of complex interjurisdictionalrelations.
These images affect the way these actorsbehave with respect to each other. Boulding defined
the image-behavior relationship: "We must recognize that the people whose decisions
determine the policies and actions of nations do not respond to the 'objective' facts of the
situation,whatever thatmay mean, but to their 'image' ofthe situation. It is what we think the
world is like, not what it is really like, that determines our behavior" (1959, 120). Our
investigation of a perceived or "constructed" intergovernmental reality by state administratorsforms the basis for understandingstate-national relations. As Thomas and Thomas
observed, "If men define situations as real they are real in their consequences" (1928, 572).
A major component of intergovernmentalrelations is the interaction among human
beings in differentpositions of official responsibility(Anderson 1960; Weidner 1960; Wright
1988). The views, opinions, andattitudesof stateagency heads concerningthe relationsamong
different levels of governments are an instrumental part of describing the landscape of
intergovernmentalrelations. They are also the basis for conveying to public administrators
a better grasp of the complex intergovermental world in which they are embedded.
The time frame of this research is significant. We investigated differences in national
fiscal and regulatoryinfluence duringand after critical events in the devolution movement. A
logical question is, When did the current"devolution revolution" begin? Scholars generally
agree that the actions of the 104th Republican Congress following the 1994 national election
marked a pivotal point in devolution (Cole, Hissong, and Arvidson 1999; Cole, Stenberg,
i Referees commentingon this essay questionedthe measurementbasis of this analysis, statingthat it relies
solely on the perceptionsof agencies heads, not on "actual fiscal and regulatorypatterns."They furthernoted
that "the data base of perceptions,not behaviors,"may not show that "actualtransactionsmay move cooperationin
realitybut [may] not [be] reportedin perceptions."Anothercommentwas that "all non-behaviorperceptualdataneeds
to be differentiatedwith appropriatecaveats." Our response to this is threefold.
First,we do clearly and consistentlyindicatethat our measuresare "perceptions."Second, and substantively,we
arguethatperception,or how administratorsview the world, guides theiractions andtheirrelationshipsto otheractors.
We agree with Weick (1979), Ring and Van de Ven (1989), and Alexis and Wilson (1967) about the "reality"that
perceptionsrepresent.These authorsand other researchin organizationtheory and behavior subscribeto the
perceptionalpropositionbest expressed by Alexis and Wilson: "The decision maker's behaviorreflects his
perceptionsof people, roles, and organization.... Even the most intelligent of us act on the basis of images that
include more than the objective facts of the decision situation"(1967, 158). For that reason we also cite Pressman
(1975, chap. 5) and his insightful "images" of national-local relationshipsin Federal Programs and City Politics.
Downs (1967) is likewise relevantin his elaborationof organizationalor policy "space" as perceived by
bureaucrats(administrators).AdditionallyDowns identifiesfive specific types of bureaucratsdependingon their
perceptionsand adjustmentsto the intra-and interorganizationalworld aroundthem. For an elaborationof Downs's
bureaucratictypes based on AmericanState AdministratorsProjectdata, see Bowling, Cho, and Wright(2004). In
short,perceptionsare an importantand consequentialpartof "reality."
Our thirdresponse to the perceptionsversus "objectivity"realm is to acknowledgethe potentialdiscrepancy
between the two and place it on the agenda for furtherresearch.For example, two referees point to the high levels
of perceived national fiscal and regulatoryinfluence in western states. They pose the query:How do perceived
influence levels square(correlate)with some "objective" variables,e.g., federal aid or regulationsimpactingon the
states? We hope to explore this at a futuretime, but as indicatedat differentpoints in this essay, a
well-developed explanatoryanalysis is beyond time and space limitations.
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Cho and Wright Devolution Revolution in Intergovernmental Relations in the 1990s
and Weissert 1996; Conlan 1998; Kincaid 1998, 1999; Nathan 1996). There was, of course,
no neat beginning or ending to devolutionary actions, and significant efforts in this direction
predatedthe 1994 elections. It is fair to say, however, that by surveying key actors in 1994
and 1998 we were monitoring the devolution movement at two critical junctures.
The data for this research are derived from the 1994 and 1998 American State
AdministratorsProject (ASAP) surveys. The surveys were conducted across the 50 states
covering approximately 3,400 agency heads of more than 90 different administrative
agencies. (For details on the ASAP surveys, see Bowling and Wright 1998; Brudney and
Wright 2002; Wright and Cho 2001.) The number of respondents to each survey was
around 1,200, and response rates were 37 percent and 33 percent, respectively, in 1994 and
1998. Survey methods confirmed that these respondents were representative of the state
agency head universe (Wright and Cho 2001).
In both surveys identical questions were asked about national fiscal and regulatory
influences on the states. We could therefore compare national influences on the states in
1994 and 1998. We hypothesized that differences in state administrators'perceptions of
national influence reflected the outcome of national devolution policies.2
MEASURINGNATIONAL
FISCALAND REGULATORY
INFLUENCE
Intergovernmentalfiscal and regulatoryrelations were tapped by three types of questions in
the ASAP surveys. The question sets focused on state-national relationships at three levels:
(1) state jurisdictional domain, (2) statewide policy impacts, and (3) agency-specific
effects. The three areas are aimed at measuring national influence and impact on the states
from the general (statewide) to the specific (agency-focused) level. These questions
permitted the development of reliable and valid measures of national fiscal and regulatory
influence by relying on confirmatoryfactor analysis (CFA) as a central statistical strategy.3
State administrators'perceptionsof nationalfiscal and regulatoryinfluencemight be explainedby several
factors, includingindividual,agency, institutional,state, and intergovernmentalcontextualcharacteristics.
Explainingthe effect of devolutionpolicies on agency heads' perceptionsof nationalinfluencerequiresa complex
regressionmodel thatincludesthe severalcontextualfactorsnotedabove as controlvariables.Sucha regressionmodel is
beyond our space and capacity here but is being exploredby Chung-LaeCho in a doctoraldissertation(in progress).
3
There are two major statisticalapproachesto extractunderlyingfactors or latent variablesbased on observed
variables:(1) explanatoryfactor analysis and (2) confirmatoryfactor analysis. Comparedwith explanatoryfactor
analysis (EFA), confirmatoryfactor analysis (CFA) provides the opportunityand flexibility to hypothesizethe
relationsbetween/amonglatent variables,observedvariables,and measurementerrors.EFA seems most appropriate
when there is limited substantiveknowledge about the numbersof latent variablesor the relationshipsbetween
latent and observedvariables.If, however, we can formalize a model representingrelationshipamong three
elements-latent variables,observedvariables,and measurementerrors-with theoreticaljustification,then CFA is
more advantageous.Because EFA relies on only statisticalcriteria,such as retainingonly factorsassociatedwith an
eigenvalue greaterthan one, problematicsolutions and interpretationsmay emerge (Bollen 1989, 232).
In contrast,CFA requiresresearchersto apply theoreticaland substantiveknowledge to constructa model. The
model can then be estimatedto see whetherit fits empiricaldata. The employmentof both substantiveand statistical
knowledge producesa more reasonableand reliable solution. There are two practicaladvantagesthat CFA
contributesto this research.One is that CFA allows correlationsamong measurementerrors.In EFA measurement
errorscannot be correlated.Because few if any measurementsare perfect, measurementerrorsneed to be includedin
a formal and statistical/empiricalmodel. Measurementerrorsare part of the variancethat is not explainedby latent
variables.It is quite plausible that measurementerrorscan be related.The second utility of CFA for this researchis
that the covarianceof latent variablescan be estimatedor set to any value. As discussed and estimatedlater, the
two dimensionsof nationalinfluence-fiscal and regulatory-are tested as to whetheror not they are independent.
If they are separatedimensions,then the associationwill be estimated.These importantadvantageslead to the
choice of CFA as a majorstatisticalstrategyof this research.
2
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Journalof PublicAdministrationResearchand Theory
Measuring National Fiscal Influence
An initial fiscal (federal aid) question focused on the broad boundary or general domain of
state government. Agency heads were asked, "Has federal aid led to national interference
in affairs that are the appropriate domain of the state?" This question was targeted at
national intrusion on the political domain, integrity, or "turf' of the state through grantsin-aid. The question probes whether national actions intrude on what Downs (1967) calls
the jurisdictional "territoriality" of state government.
The second question rested on the proposition that federal grants lower the price of
aided programs and alter the agenda of issues or balance among programs and policies
pursued by state decision makers (Wright 1968, 1988). The purpose of the question was to
elicit responses about the extent to which federal aid skews or shifts state priorities or policy
choices because of the availability of program-specific (categorical) grant funds. The
statewide policy question asked, "Does federal aid tend to unbalance or skew the overall
characterof your state's programs?" Downs (1967) frames this issue in terms of altering or
modifying resource allocations within the "policy space" of a jurisdiction or organization.
The third-level question was agency specific and rested on the same logic about the
price effects of federal grants. The price effects of funds here, however, are internal to the
agency. Administrators were asked, "In place of categorical federal aid, if your agency
were given an equal amount of money without 'strings' attached, would you allocate the
money differently from the way federal funds are now allocated? IF YES, how different
would your reallocation be?" The probe following a yes response consisted of four
progressive options: "slight," "moderate," "substantial," and "radical." Downs (1967)
frames this issue as altering resource allocation(s) within a specific agency's policy space.
The three questions above, denoted as "Interference," "Skewness," and "Reallocation,"
were used to measure perceived national fiscal influence (PNFI) in 1994 and 1998.4
Figure 1 shows the hypothesized relations between PNFI and the three indicators. The
indicators are assumed to be determined by PNFI. Positive causal relations are expected
between PNFI and each indicator. As the PNFI score increases, state administratorsare
likely to report higher interference, skewness, and reallocation. In this model we imposed
an equal constraint on the factor loadings of interference and skewness. This constraint is
based on the assumption that interference and skewness presumably measure national
fiscal influence on a transagency or statewide basis. Interference is about national fiscal
influence on state authority. Skewness involves influence on overall state policies. State
administrators are likely to report similar responses to the interference and skewness
questions.
The expected positive relationship between PNFI and the three indicators is
confirmed. The estimated factor loadings are 0.89, 0.89, and 0.38, respectively. All three
are statistically significant. The model fit indexes are very good (see figure 1), allowing us
to argue that the theoretical model fits the data well.5 These three indicators were used to
These three questionswere used previouslyto investigatethe effect of Reagan's new federalismreforms
(Yoo and Wright 1993, 1994).
5
In figure 1 all model fit indexes except chi-squareshow that our model fits the data well. The chi-squareof
6.22 is statisticallysignificant,suggesting that this model is unacceptable.The chi-squarestatistic,however, is
problematicwhen a sample size is large. The sensitivity of chi-squareto sample size promptssome researchers
to use the ratio of chi-squareto degrees of freedom as a fit measure.There is no guideline aboutwhat value of the
x2/dfis acceptable.In our researchthe ratio is 6.62. Given the size of our data set (N = 1,623) and other model
fit indexes we are confidentthat our model fits the data well in spite of the chi-squarevalue.
4
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Choand Wright DevolutionRevolutionin Intergovernmental
Relationsin the 1990s
Figure1
Modelfor MeasuringPerceivedNationalFiscalInfluence.Note:N = 1,623. X2(1)= 6.62 (p = 0.01).
Goodness of Fit Index: 1.00. AdjustedGoodness of Fit Index:0.99. Normed Fit Index: 1.00.
NonnormedFitIndex:0.99. The estimatesare standardized.***p < 0.01. nt = significanceis not
tested becausethisfactorloadingis fixedat 1.0 to scale the factor.
.89'**
PNFI
^^--^
?
.89**
.
INTERFERENCE
<
)
SKEWNESS
_ ^ 38"nt
- -~
K/
REALLOCATION
construct PNFI scores for each respondent.6 A further test was employed to assess the
reliability of the PNFI scores. The reliability index for the scores was 0.79, a level that is
quite acceptable.7 We thus have a conceptually and empirically valid measure of national
influence that is also reliable.
A separate and independent validity test of the PNFI measure was pursued. The 1998
ASAP survey asked separate questions concerning devolution in state-national relations
over the past four years (1994-1998). The questions were (a) whether or not more state
discretion existed in program/policy choices and (b) whether or not state discretion
increased in the use of federal funds. Similar questions were asked with respect to agency
level effects. The questions asked whether, during the past four years, (a) more agency
discretion was available in program/policy choices and (b) greater agency discretion
existed in the use of federal funds. If the PNFI score is valid, then the PNFI for
administratorsreporting no to the devolution questions should be higher than for those
responding yes.
Table 1 shows PNFI scores for the two response groups. Mean PNFI scores for the
"No" group are consistently higher than for the "Yes" group on all four questions. In
addition, the four sets of differences between the two response groups are statistically
significant. This empirical evidence supports the validity of the PNFI measurement.
Measuring National Regulatory Influence
The measurement of perceived national regulatory influence parallels the general-tospecific strategy used to measure national fiscal influence. Three levels or types of
questions were incorporatedin the ASAP surveys.
CFA provides factor scores. The factor scores are used as weights. PNFI scores for each respondentare
constructedby summingthe three weighted PNFI indicators.
7
Reliability is defined as the ratio of true varianceto total variance(Bollen 1980, 1989; Hatcher1994).
This forms the basis for derivinga reliabilityindex for PNFI. Following Bollen's (1980) formulawe obtaineda
reliabilityindex of 0.79. Althoughthere is no common or fixed standardfor acceptablereliabilitycoefficients,values
around0.9 can be consideredexcellent; 0.8, very good; and 0.7, adequate(Kline 1999, 194). Accordingto these
guidelines the measurementreliabilityfor PNFI (0.79) is quite acceptable.
6
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Journalof PublicAdministrationResearchand Theory
Table 1
State Administrators'
PerceivedNationalFiscalInfluence(PNFI)Scores by Responses to Fiscal
Devolution,1998
Devolution
Response
YES
NO
T-score
More State
Discretion in
Program/Policy
Choice
IncreasedState
Discretion in Use
of FederalFunds
More Agency
Discretion in
Program/Policy
Choice
IncreasedAgency
Discretion in
Use of
FederalFunds
0.80 (449)
1.00 (254)
4.25***
0.81 (410)
0.94 (297)
2.74***
0.77 (405)
0.97 (339)
4.31***
0.79 (375)
0.93 (371)
3.15***
Note: The numbers in the parentheses are the number of respondents. PNFI ranges from 0 to 1.5.
One-tailed test. ***p < 0.01.
The first-level general question is, "Have national legal/regulatory actions infringed
on the reserved powers of the states?" The second question elicited responses about the
extent to which federal regulatory actions affected state priorities or policy choices. The
statewide policy question asked, "Have national legal/regulatory actions altered your
state's program and policy priorities?" A third cluster of questions was agency specific.
Administrators were asked to rate the impact of the four types of national regulatory
actions on their agencies: (a) administrative regulations, (b) mandates, (c) statutory
preemptions, and (d) federal court decisions. These four items measured the degree to
which national regulations influenced a particularagency's policy space.
These six questions (two general and four specific) were used to measure perceived
national regulatory influence (PNRI) for 1994 and 1998. The relationships among PNRI
and the six indicators as well as the measurement errors are shown in figure 2.8 The factor
loadings for infringement and policy change are 0.52 and 0.48. Those for administrative
regulations, mandates, preemptions, and federal court decisions are 0.72, 0.77, 0.79, and
0.72, respectively. All factor loadings are statistically significant, and the goodness of fit
for the overall model is solid enough to confirm that the hypothesized relations among
PNRI, the indicators, and the measurement errors are acceptable. These results strengthen
the point that PNRI has both conceptual and measurement validity. PNRI scores for
respondents were developed following procedures identical to those for PNFI. The reliability of PNRI scores is 0.79, which suggests the measurement is acceptable. The measurement of perceived national regulatory influence appears both valid and reliable.
For the PNRI an empirically based validity test was performed similar to that for
PNFI. The 1998 ASAP survey included separate questions on regulatory devolution.
Respondents were asked whether or not, during the past four years, more state discretion in
program/policy choices was provided; whether or not overall federal regulation on the state
declined; and whether or not unfunded mandates on the state were reduced. The same
questions were also asked with respect to agency-level effects. If the measurement is valid,
then the PNRI scores for agency heads reportingno to these devolution questions should be
higher than for those reporting yes. Table 2 displays PNRI scores for the two response
groups. The mean PNRI scores for the "No" group are consistently higher than for the
8 Two constraintsare imposed on this PNRI measurementmodel: (1) the measurementerrorsof infringement
and policy change are correlated;and (2) those of administrativeregulationand mandatesare also correlated.
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Choand Wright DevolutionRevolutionin IntergovernmentalRelationsin the 1990s
Figure2
ModelforMeasuringPerceivedNationalRegulatory
Influence(PNRI).
Note:N = 1,603.X2(7) = 12.55
=
of
Fit
Goodness
Index:
1.00.
of
Fit
Goodness
Index:
1.00.NormedFitIndex:0.99.
0.08).
(p
Adjusted
NonnormedFitIndex:0.99. The estimatesare standardized.***p < 0.01. nt = significanceis not
tested becausethis factorloadingis fixedat 1.0 to scale the factor.
"Yes" group on all six questions, and the differences in PNRI between the two groups are
all statistically significant. These results further confirm PNRI as a valid measure of
national regulatory influence.
Are Fiscal and Regulatory Influence Measures Independent?
This research posits that PNFI and PNRI are separate measures of national fiscal and
regulatory influence. This assumption derives from the two historic and contrastingaspects
of state-national relationships, cooperation and coercion. The conceptually separate
dimensions, however, do not assure that state administratorsperceive empirically these
two types of distinctive national influence in their operational world.
Table2
State Administrators'
PerceivedNationalRegulatoryInfluence(PNRI)Scores by Responses to
Devolution,1998
Regulatory
More State
Discretion in
Devolution Program/Policy
Choice
Response
YES
NO
T-score
1.21 (423)
1.37 (254)
4.39***
Reduction Reductionin More Agency Reduction Reductionin
in Federal Unfunded
Discretion in
in Federal Unfunded
Regulation Mandates Program/Policy Regulation Mandates
on States
on States
Choice
on Agency on Agency
1.13 (134)
1.21 (129)
1.20 (329)
1.17 (115)
1.20 (102)
1.31 (524)
1.31 (487)
1.29 (372)
1.27 (578)
1.26 (543)
4.01***
2.08**
2.50***
2.07**
1.59*
Note: The numbers in the parentheses are the number of respondents. PNRI ranges from 0 to 2.5.
One-tailed test. ***p < 0.01; **p < 0.05; *p < 0.1.
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Journalof PublicAdministrationResearchand Theory
Confirmatory factor analysis provides a method to test the dimensionality of
a construct such as national influence.9 For dimensionality testing two models that combine
PNFI and PNRI measurement models are estimated. One is a two-factor model, whereas
the other assumes a single factor. The single-factor model is identical to the two-factor
model except that the correlation between PNFI and PNRI is constrainedto equal 1.0. That
is, PNFI and PNRI are assumed to be perfectly correlated.10The chi-squares obtained from
the estimation of the two models are compared to assess which model is better. If
a significant difference is found in the chi-square values between the two models, then it
suggests that the constraint of perfect correlation between PNFI and PNRI is not
acceptable. The chi-square difference test showed that the two-factor model has a better
model fit than the single-factor model.11 In other words, PNFI and PNRI are two
dimensions rather than one.
The dimensionality test has significant implications. First, there are two dimensions of
national influences: fiscal and regulatory. Second, our research strategy based on a twodimensional approach to national influence is appropriate both empirically and
conceptually. The larger significance is that a more complete and balanced understanding
of state-national relations necessitates reliance on a dual dimensional approach. This firm
finding leads us to explore later the relationship between PNFI and PNRI.
INFLUENCE
IN THE1990S
NATIONALFISCALAND REGULATORY
The measurement of PNFI and PNRI allows and encourages the comparison of national
fiscal and regulatory influence levels between 1994 and 1998. In which direction has
perceived national influence moved? Two strategies for comparison are employed. One
compares PNFI and PNRI scores for all 1994 and 1998 ASAP respondents(about 1,600) by
independent-samples t-tests. The second compares only those scores for respondents who
replied to both the 1994 and 1998 ASAP surveys (paired-samples t-test).12
Table 3 reports mean scores for PNFI and PNRI in 1994 and 1998. For the
independent samples the mean scores for national fiscal influence are 1.00 and 0.84 for
1994 and 1998, respectively. Perceived national fiscal influence dropped noticeably across
the four-year span. Similarly, national regulatory influence declined, with the mean score
dropping from 1.42 in 1994 to 1.24 in 1998. The paired-samples test furtherconfirms the
declines in national fiscal and regulatory influence. Mean PNFI scores dropped from 0.70
9
To obtain valid and reliable measurements,the dimensionsof a measurementmodel should correctlyreflect the
dimensionsof a construct.Bollen andGrandjeanemphasizedthe importanceof dimensionalityby stating,"In research,
measurementoperationsthat do not accuratelyreflect the dimensions of a constructyield ambiguousresults. If
a constructis multidimensional,a unitarymeasuremay tap only one dimension.... Conversely, an attemptto use
separatemeasuresfor a unidimensionalphenomenonwill result in a futile battle with multicollinearity"(1981, 651).
lo For other examples of dimensionalitytests, see Bollen and Grandjean(1981) and Bollen and Hoyle (1990).
1
The test result showed that chi-squaresof the single-factor(one-dimension)and two-factor(two-dimension)
model are 172.89 with 26 degree of freedom and 106.98 with 25 degree of freedom, respectively.The resultant
chi-squaredifferenceis 65.91 with 1 degree of freedom(p < 0.0001). The significantdifferencein chi-squaresuggests
that the two-factoris betterthan the single-factormodel.
12
We identified208 respondentswho replied to both the 1994 and 1998 ASAP surveys. Among them 126
respondentswere available for comparisonof PNFI scores and 103 for PNRI scores. With these panel data we
examinedthe differenceof PNFIandPNRIscoresbetweenthe two ASAP surveysfor individualrespondents.We found
that for PNFI 44 percent, 25 percent, and 31 percent of the respondentsperceived decreased,increased,and same
nationalfiscal influence, respectively, from 1994 to 1998. For PNRI 59 percent, 37 percent, and 4 percent perceived
decreased, increased,and the same nationalregulatoryinfluence,respectively, across the four-yearspan.
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Choand Wright DevolutionRevolutionin Intergovernmental
Relationsin the 1990s
Table3
of PerceivedNationalFiscaland Regulatory
Influence(PNFIandPNRI)in 1994 and 1998:
Comparison
Independentand PairedSamplesT-Test
Independent-SamplesT-Test
T-score
Paired-SamplesT-Test
T-score
PNFI Mean Score
1994
1998
PNRI Mean Score
1994
1998
1.00 (N = 820) 0.84 (N = 803)
5.34***
=
0.70 (N 126) 0.59 (N = 126)
2.96***
1.42 (N = 841) 1.24 (N = 762)
8.10***
=
1.24 (N 103) 1.11 (N = 103)
3.10***
Note: PNFI ranges from 0 to 1.5; PNRI ranges from 0 to 2.5.
***p < 0.01.
in 1994 to 0.59 in 1998, whereas PNRI scores shifted from 1.24 in 1994 to 1.11 in 1998.
This paired-samples test provides more reliable and persuasive results. Because they are
based on the same respondents (N = 126; N = 103) over the four-year span, factors
affecting the perceptions of national influence could be controlled except for lapsed time.
Babbie (1995, 95-100) argued that panel data give a more reliable and comprehensive
picture of attitude change over time.
The figures and findings in table 3 reveal a modest yet significant change in
intergovernmentalfiscal and regulatoryrelations in the 1990s. State administratorsviewed
both national fiscal and regulatory influence as significantly less intrusive in 1998. In short,
we identified a clear and notable movement in the direction of devolution duringthe 1990s.
The shift, however, could be interpreted as modest, incremental, or evolutionary rather
than revolutionary.
THEDIFFERENTIAL
EFFECTS
OF DEVOLUTION
Our findings confirm a general but modest downwardtrend of national fiscal and regulatory
influence. In the aggregate, intergovernmental relations as perceived by state administratorsmoved toward reduced national influence in the 1990s. These changes, however,
are likely to vary according to different criteria. Two criteria or factors are (1) types of
public policy areas and (2) geographic regions. Examining national influence by policy
arenas and by geographic regions provides a more specific, illustrative, and disaggregated
picture of the two intergovernmentaldimensions, cooperation and coercion.
Functional or Policy Arena Differences in National Fiscal and Regulatory Influence
Public policy arenas have been used to explain variations in politics and administration
across different programs and activities (Lowi 1970, 1972; Peterson 1995; Peterson, Rabe,
and Wong, 1986; Ripley and Franklin 1991). These policy arenas often reveal differences
in intergovernmentalrelationships (Wright 1988). Peterson (1995) noted that redistributive
policies such as income security became more centralized (nationally financed) whereas
the states assumed greaterresponsibility for distributivepolicies such as transportationand
education. Wright and Cho (2000) found that various types of state agencies differ
distinctively in their involvement with intergovernmentalrelations. This variation provides
a rationale for exploring perceived national fiscal and regulatory influence by clusters of
state agencies according to policy arenas.
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Journalof PublicAdministrationResearchand Theory
Table4
PerceivedNationalFiscaland RegulatoryInfluence(PNFIand PNRI)by State AgencyFunctional
Categories(PolicyArena):MeanScoresfor PNFIand PNRIin 1994 and 1998
PNFI
Function
Staff: Fiscal
Environmentand Energy
Income Security and Social Service
Health
Staff: Nonfiscal
Transportation
Elected Officials
Economic Development
Regulation
NaturalResources
Education
Other
CriminalJustice
Average (All Respondents)
N
PNRI
1994
1998
1994
1998
1.25 (1)
1.16 (2)
1.15 (3)
1.09 (4)
1.08 (5)
1.06 (6)
1.02 (7)
1.00 (8)
0.94 (9)
0.90 (10)
0.84(11)
0.80 (12)
0.74 (13)
1.00
820
1.33 (1)
1.05 (2)
0.98 (4)
0.92 (6)
0.99 (3)
0.87 (7)
0.60 (11)
0.84 (8)
0.93 (5)
0.75 (10)
0.49 (13)
0.57 (12)
0.79 (9)
0.86
841
1.53 (2)
1.51 (4)
1.42 (7)
1.35 (9)
1.51 (3)
1.40 (8)
1.54 (1)
1.27 (13)
1.42 (6)
1.47 (5)
1.35(10)
1.34 (12)
1.34 (11)
1.42
803
1.44 (1)
1.33 (2)
1.25 (7)
1.01 (13)
1.24 (8)
1.25 (6)
1.29 (5)
1.15 (11)
1.31 (3)
1.30 (4)
1.19(9)
1.17(12)
1.14 (12)
1.24
762
Note: PNFI ranges from 0 to 1.5. PNRI ranges from 0 to 2.5. The numbers in parenthesis are ranks of PNFI and PNRI mean scores.
We move beyond Lowi's policy typology of distributive, regulatory, and redistributive categories and use a less aggregated classification of policy arenas. State agencies
are categorized into thirteen groups of generally similar types of activities and functions.
This classification scheme, used previously (Cho and Wright 2001; Wright and Cho 2000),
disclosed aspects of both consistency and diversity in state-national relationships.
The mean scores for PNFI and PNRI by respective functional or policy areas are displayed in table 4. Several findings are evident from the policy area comparisons as well
as contrasts between 1994 and 1998 results. Three major points are worth noting.
First, the overall picture for fiscal and regulatory state-national relations was one of
general and consistently reduced national influence. Disaggregated parts of the larger
picture, however, reveal a variety of different patterns. Fiscal influence declined for
most functions yet increased slightly for fiscal staff and criminal justice agencies. The
largest drop in fiscal influence was reported by elected officials and education agency
heads. National regulatory influence dropped from 1994 to 1998 across every cluster of
agencies. The largest decline in regulatory influence occurred among health and nonfiscal staff agencies.
Second, national fiscal and regulatory influence varied substantially across functions.
Agency heads from staff (fiscal and nonfiscal), environment/energy,income security/social
service, and health perceived higher fiscal influence, whereas those from elected positions,
natural resources, education, and criminal justice perceived lower influence. Regulatory
influence also diverged across functions. Fiscal staff, elected, and environment/energy
positions reported comparatively high levels of national regulatory influence. By way of
contrast, education, health, economic development, and criminal justice administrators
reported regulatory influence at levels well below those for other agency clusters.
Third, agency heads for some functions were inconsistent in their perceptions of
national fiscal and regulatory influences. That is, they perceived high fiscal influence on
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Cho and Wright Devolution Revolution in Intergovernmental Relations in the 1990s
Figure 3
State Administrators'Levels of Perceived National Fiscal Influence (PNFI) in the 1990s by State
(N= 1,623)
WY~~~~I~~~;o
PNFI
Score:
I
|
-
hno
I Low
ModeratelyHigh
~=;)ieOH
p I;;;
ModeratelyLow
High
one hand but relatively moderate or low regulatory influence on the other (or vice versa).
For example, health and income security/social service agencies reported relatively high
national fiscal influence but moderate or low regulatory influence. The opposite applied to
elected officials and natural resources agencies. Agency heads from these two functions
experienced moderate or low national fiscal influence but high regulatory influence.
These findings supportthe argumentthat both the fiscal and regulatory dimensions of
intergovernmental relations need to be assessed to obtain a balanced understanding of
American federalism. Assertions about national influence that cover only one dimension
of federalism, fiscal or regulatory, are likely to produce limited and likely inaccurate
estimates of the complex nature of state-national relationships. Furthermore,the shifting
patterns of national influence vary widely depending on the type of agency and function
at the state level. Complexity and contingency are part and parcel of Elazar's notion
of coercive cooperation.
Regional Differences in Fiscal and Regulatory Relationships
Sharkansky (1967, 1968, 1971) argued that region serves as an important variable for
systematic analysis of the American states. His several studies found that regionalism was
strongly related to state political and administrative characteristics such as voter turnout,
interpartycompetition, legislative apportionment, and state expenditures. This prompted
us to raise questions of the region-related effects of national influence. Are there evident
and consistent regional patterns of perceived national influence regarding fiscal and
regulatory relationships? Do the circumstances that neighboring states have similar
historical experiences, political subcultures, and economic conditions contribute to
regional patterns of state officials' perception of state-national relations (Elazar 1984)?
Figures 3 and 4 reveal noteworthy regional patterns of perceived state-national fiscal
across the
the United
United States.
between eastemn
eastern
and regulatory
States. First,
regulatory relationships
relationships across
First, comparisons
comparisons between
and
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Journalof PublicAdministrationResearchand Theory
Figure4
State Administrators'Levels of Perceived National RegulatoryInfluence (PNRI)in the 1990s by State
(N= 1,603)
PNRI
Score:
I
I Low
1M
ModeratelyHigh
[-I;;:; ModeratelyLow
and western regions show that states west of the Mississippi River generally score higher
on perceived national fiscal and regulatory influences. These western states are high or
moderately high on both fiscal and regulatory influence, whereas eastern states tend to
report low or moderately low national influence. Second, scores on both influence
measures in the middle and southern Atlantic states tend to be especially low for both the
PNFI and PNRI categories. Third, state administratorsfrom the mountain western states
(except for Montana and New Mexico) record particularly high PNRI scores.
Seven of twelve states included in the high PNRI category (Alaska, Arizona,
Colorado, Idaho, Nevada, Utah, and Wyoming) are mountain western states, and they also
score high or moderately high on national fiscal influence. These western states tend to
have one feature in common; all have unusually high proportions of federally owned lands
within their boundaries. The 1980s, and particularlythe early Reagan years, were identified
as the era of the "Sagebrush Rebellion" (Wright 1988). It appears that those sentiments
and sensitivity about national influence(s) can have long-term effects.
AND CONVERGENCE
DIMENSIONS:DIVERGENCE
FISCALAND REGULATORY
Fiscal (cooperative) and regulatory (coercive) dimensions are distinctive and prominent
aspects of contemporary intergovernmental relations. State administrators perceive and
distinguish between these two aspects of intergovernmental relations. This conclusion is
supported by the dimensionality test where the two-dimension model better fits the data
than the single-dimension model. It is therefore natural to explore what the association is
between the two dimensions. What are the correlations between PNFI and PNRI?
Confirmatoryfactor analysis formed the basis for the correlation analyses. Combining
the PNFI and PNRI measurement models enabled us to estimate correlations between the
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Choand Wright DevolutionRevolutionin IntergovernmentalRelationsin the 1990s
Table5
Correlations
betweenPerceivedNationalFiscalInfluenceand PerceivedNationalRegulatory
Influence
Scoresin the 1990s
Correlation
Goodness of Model Fit
N
Chi square(df=25)
Normed fit index
Nonnormedfit index
Goodness of fit index
Adjustedgoodness
of fit index
1994
1998
0.58***
0.75***
0.71***
599
79.38***
0.94
0.94
0.99
576
85.58***
0.94
0.94
0.99
1,175
106.98***
0.96
0.95
0.99
0.98
0.98
0.99
1994 and 1998
***p < 0.01.
two latent variables (PNFI and PNRI) for 1994, for 1998, and for the merged data sets.
The results are shown in table 5.
Correlationsbetween the two dimensions are 0.58 and 0.75, respectively, for the 1994
and 1998 ASAP survey respondents. Merging the two data sets provides an overall
correlation for the 1990s of 0.71. These correlations suggest two points. First, the two
dimensions of state-national relations are separately identifiable in practice (perceptions)
as well as conceptually. Second, the moderate or moderately high correlationsbetween the
fiscal and regulatory measures suggest that these two are to some degree overlapping.
The correlations between PNFI and PNRI may derive from the use of distinct
intergovernmentalpolicy tools. Regulatory tools such as direct orders and preemptions are
independent of federal aid. Likewise block (or unconditional) grants, as a fiscal tool, are
largely unrelated to regulatory relations. The conditions attached to grants-in-aid such as
crosscutting requirements and crossover sanctions, however, blur the boundaries between
fiscal and regulatory intergovernmental dimensions. These separations and overlaps of
intergovernmental policy tools appear to produce the moderate correlations between
perceived fiscal and regulatory intergovernmentaldimensions. The conditions attached to
federal grants-in-aid such as crossover sanctions and crosscutting requirementsbelong to
both fiscal and regulatory policy tools. Their presence might explain the overlapping and
consequent positive correlations of the two dimensions.
Over the four-year span the correlations between PNFI and PNRI increased from
0.58 to 0.75. One explanation might be offered for the rise in this correlation coefficient.
The national government may have relied more on crosscutting requirements, crossover
sanctions, or conditions attached to federal grants-in-aid. Such a shift would explain
why the correlations between PNFI and PNRI moved upward from 1994 to 1998. As
with other findings reported in this analysis, further research on the actual frequency
and incidence of national regulations would assist in linking objective reality with subjective reality.
There is a furtheraspect of the PNFI and PNRI relationship that merits attentionunder
the convergence theme. It derives in part from the combination of lower scores in 1998
than in 1994 on both the fiscal and regulatory dimensions. At the same time, however, the
underlying correlation between the two dimensions rose from 0.58 to 0.75. Although the
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Journalof PublicAdministrationResearchand Theory
Figure5
Shifts in State-National Fiscaland RegulatoryRelationships in the 1990s: Divergentand Convergent
Perceptions of National Influence
High
Fiscal
Regulatory
191994
1994
Degree of
National
Influence
1998
Divergent
1998
Convergent
Divergent
Proximityof Fiscaland RegulatoryTools
two overall national influence measures declined, there was greater overlapping between
the two generic dimensions. This greaterproximity or convergence as well as the influence
shifts (downward) can be grasp better in visual form.
Figure 5 displays abstractly the vertical and lateral movements in the patterns of
perceived national influence. Although perceived national influence declined on both the
fiscal and regulatory fronts from 1994 and 1998, the two measures simultaneously
converged. More broadly and significantly, the movements displayed in figure 5 highlight
the continuing trade-offs that intergovernmental public managers constantly face.
Although gains may accrue from reduced national influence, those results come at the
cost of more blended, overlapping, and complex merging of fiscal and regulatory factors.
Recently Agranoff and McGuire (2001) alerted administrators to four "models of
management" that are in play, so to speak, for actors in the American federal and
intergovernmentalsystem. It is unclear whether the shifts we depict in figure 5 are a part of
or extend beyond their fourth or "networks" model. Regardless of the fit or extension,
what is evident is the increasingly complex and nuanced character of intergovernmental
management in the U.S. federal system.
OBSERVATIONS
CONCLUDING
This analysis examined the "devolution revolution" of the 1990s. We empirically
measured and explored changes in state administrators'perceptions of national fiscal and
regulatory influence in 1994 and 1998. The findings provide the basis for the following
observations.
First, the systematic measurement of state administrators' perceptions of national
fiscal and regulatory influence captured important aspects of changes in state-national
relations during the 1990s. Confirmatory factor analysis provided valid and reliable
measurements of national fiscal and regulatory influence. We found that state
administrators'perceptions of national fiscal and regulatory influence declined moderately
yet significantly from 1994 to 1998. This finding reveals that devolution was partially
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Choand Wright DevolutionRevolutionin Intergovernmental
Relationsin the 1990s
realized, at least from the standpoint of key state officials (agency heads) who were in
position to observe and judge the shifting nature of state-national relationships.
Second, the disaggregation of PNFI and PNRI scores by types of agencies indicates
that shifts in state-national relations during the 1990s varied across different policy arenas.
State-national fiscal and regulatory relations are significantly different across functions.
These findings emphasize the need to take account of the differential effects of both the
fiscal and the regulatory aspects of state-national relations. Viewing one dimension of
intergovernmentalrelations without the other is not likely to provide accurate or adequate
knowledge of the current, complex, and dynamic nature of state-national relations.
National fiscal and regulatory influences on the diverse range of state agencies require
differential analyses to arrive at a more complete understanding of contemporary
intergovernmentalrelations.
Third, there was a distinct regional pattern involving perceptions of national
regulatory influence. Agency heads from states west of the Mississippi River generally
regarded the national government as more intrusive. They reported high or moderately
high levels of national fiscal and regulatory influence. In particularthe administratorsfrom
western mountain states perceived especially high national regulatory influence. These are
states, of course, where federally owned lands are a high percentage of the state and where
the "Sagebrush Rebellion" of the 1980s was a featured political issue. In sharp contrast,
agency heads from eastern states tend to report low or moderately low national influence
levels. State administrators from the middle and southern Atlantic regions scored
exceptionally low on both national fiscal and regulatory influence.
Fourth, the fiscal and regulatory dimensions of intergovernmental relations are
moderately and increasingly related. This finding suggests that these two historic and
distinct dimensions of intergovernmental relations are not as divergent as previously
presumed. Empirical evidence supports the presence of a new and contradictory
intergovernmental period. Elazar's (1990) "coercive cooperation" concept appears
specifically relevant to an increasing blend of fiscal cooperation and regulatory coercion.
Fifth, the directions of changes in state-national relations in the 1990s were twofold.
One was the downward shift in the influence of the national government. State
administratorsregarded national fiscal and regulatory influence as less intrusive in 1998
than in 1994. This suggests that devolution as political strategy had an identifiable and
noteworthy policy impact. Its effects, however, were modest and more evolutionary than
revolutionary. The second direction of shifting national influence might be labeled as
convergent. Fiscal and regulatorydimensions of intergovernmentalrelations moved closer,
as demonstratedby the dual directions of these shifts (see figure 5). As the level(s) of national
influence declined, the separationor distinction between PNFI and PNRI converged.
The blurring of the distinction(s) between cooperative and coercive state-national
relations suggests that understanding and working in contemporary intergovernmental
relations require increased skills, greater sophistication, and subtle differentiations.Four or
more models of management are clearly present in intergovernmental arenas (Agranoff
and McGuire 2001, 2004). Cooperation and coercion apparently are converging. In that
respect the validity of the blended concept of coercive cooperation (Elazar 1990) captures
the intergovernmentalframes of reference for state agency heads in the last decade of the
twentieth century. Understanding and managing coercive cooperation pose major
challenges for both practitioners and scholars assessing and navigating federalism and
intergovernmentalrelations during the first decade of the twenty-first century.
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