Name:

Q1.
The reasons that oppose the cooperative federalism are as follows:
1. Too much power for central government: It provides direct intervention of central
government in many areas which were traditionally been managed by states. Thus,
state government had less freedom in managing the issues and issuing their policies.
For example in case of No child Left Behind Law (2011), the central government started
micro-managing the state affairs in the area of education. It allowed federal government
to order the states to do various things.
2. Conflict between laws and policies: Many times any two federal laws indirectly
conflict and the state government could not find out which one to follow. In this case, the
government faces confusion and hence dissatisfaction to complete the things. Thus, the
sense of cooperation is lost. For example in the case of Environmental Protection
Agency v. EME Homer City Generation in the purview of Clean Air Act , "upwind" states
that are producers of pollution are required to develop SIPs that protect "downwind"
states from that pollution (Nash, 2014). In 2011, while the legal case was going on, the
EPA issued new regulatory approach and simultaneously issued FIPs to implement that
approach. The states started following the new approach but they were undergoing
through litigations on practices that were 2 years old. The central government had not
given sufficient time to the states to comply before filing the case for not abiding the old
practice.

3. Increasing complexity: When state and federal government both try to manage the
things, then complexity in rules and work processes arise. For example, the overall
revenue system and its constituent parts are complicated. Complication results in
misunderstandings and many taxpayers avoid devoting time to learn the new system.
Q2. Three ways by which intergovernmental relations could be improved in the area of
fiscal prudence are:
1. The federal government should give reasonable freedom to state and local
governments to manage the issues at their levels and provide strategies on how to
accumulate and spend funds to resolve these issues. Thus, federal government should
give power to spend as well as power to raise revenue to lower level governments.
2. The government should take measures to reduce the vertical fiscal imbalance. This
disparity is largely due to the different revenue sources used by governments. The
federal government can provide freedom to state governments to use locally imposed
taxes to finance local expenditures. It should try reducing the variations between state
governments work processes. It could also define jurisdictional boundaries to define the
scope of activity by each local government. Thus, they can better manage the expenses
and identify ways to gain taxes or revenues. Thus, federal government should promote
local fiscal accountability.
3. Federal government should identify the areas where economies of scale could help
the local governments to reduce cost. For example the transaction cost of tax collection
could be reduced by imposing common guidelines by most of the states and having one
common portal to collect and manage state level taxes.

References:
Nash, J. (2014). Keeping cooperation in cooperative federalism, The Hill. Retrieved
from http://thehill.com/blogs/pundits-blog/energy-environment/207683-keepingcooperation-in-cooperative-federalism