Does Competition in Government Work

Reply to Leonard and Joseph: Tom Dye American Federalism

Leonard

Is the race to the bottom risk a legitimate concern in Tom Dye’s model? The race to the bottom risk is the proposition that companies will attempt to move their operations to jurisdictions with lower environmental and social standards in order to reduce costs. This race to the bottom can lead to a downward spiral in environmental and social standards, as companies vie for a competitive advantage.

But In Tom Dye’s American Federalism model, the race to the bottom risk is mitigated by the presence of strong environmental and social regulations at the federal level (Gerlak et al., 2020; Hong et al., 2019). These federal regulations provide a floor below which companies cannot go in their efforts to reduce costs. As a result, the race to the bottom risk is not as great a concern in Tom Dye’s American Federalism model as it is in other models of federalism.

That said, I do think that federal regulation is not the ideal to be depended on, because the nation was really founded on the idea that the states should be calling most of the shots in their respective boundaries. So people might push back against federal regulation—and then perhaps there would be a real race to the bottom. But in my opinion, we need to weigh the pros and cons: no system or model is going to be perfect. So what are we really trying to achieve. If it is independence and a free market type of competition, then I would say Dye’s model makes the most sense. And in the end, we need to be like what is recommended of us in 2 Corinthians 9:7: “Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver.” Only then can our society flourish—and flourish it will if we just apply the Christian model.