Academic journal article Harvard Law Review

State Collective Action

Academic journal article Harvard Law Review

State Collective Action

Article excerpt

Although the Blue and Gray armies disbanded after Appomattox, the primordial forces that caused the Civil War are perpetual. These forces are not specific to antebellum America, but rather are the incentives that generate state collective action, a phenomenon by which states with common interests act in concert to obtain benefits for themselves without regard for national welfare. In the Civil War, both the North and the South went to war partially over these sectarian interests. And although modern-day instantiations of state collective action are less bellicose and less capacious than the Civil War was, they still have a potentially important effect on social welfare and yet are undertheorized in the literature. This Note aims to fill that gap. (1)

Three stylized examples of how state collective action may be used to regulate pollution illustrate how state collective action operates and what effects it may have. Each example assumes that the northeastern United States has greater air pollution than the rest of the country, but varies the cause of the increased pollution. In the first example, the higher pollution is caused by air currents that blow pollution into the Northeast from power plants that are located outside the Northeast and generate power exclusively for states located outside the Northeast. This example is the familiar case of a negative externality: the non-northeastern states will pollute more than is optimal because they do not bear the full costs of their pollution. Acting individually, each northeastern state likely can do little to affect the behavior of the polluting states; however, if they act collectively, they may be able to impose sanctions on the polluting states to address the excess pollution, leading to socially superior outcomes. Such state collective action would be socially beneficial on a national basis, but would redistribute welfare from the polluting states to the northeastern states.

In the second example, power plants in each northeastern state generate power used only in that state but cause pollution across the whole region. Here the northeastern states will generate more power than is optimal because of collective action problems: by generating less power, each state receives a small benefit from the resulting pollution reduction but incurs a large cost from lost power. If the northeastern states banded together, they may overcome this collective action problem by regulating power production and pollution regionally. State collective action in this example would also be socially beneficial on a national basis, but would affect only the Northeast.

In the third example, northeastern residents cause the higher levels of air pollution by driving more miles than residents of other states. Assume further that automakers could improve fuel efficiency to ameliorate this problem, that doing so would increase the cost of each car, and that production constraints force automakers to sell a standardized product in all states. Although the benefit from reducing emissions is worth the cost of fuel-efficient cars for the northeastern states, that benefit is not worth the cost to the other states. Thus, the status quo of automakers producing fuel-inefficient cars is socially optimal. However, the northeastern states may respond by acting collectively to adopt regional emissions standards that force automakers to make fuel-efficient cars if they want to sell any cars in the Northeast. (2) This type of state collective action would be socially suboptimal on a national basis and would involve the Northeast imposing costs upon the rest of the nation to obtain a less valuable regionalized benefit.

These examples lay out the three basic effects state collective action can have. It can maximize social welfare by creating benefits for the acting group that outweigh the costs to nonacting states, it can maximize social welfare without imposing costs on other states, or it can be socially suboptimal by imposing costs on other states that outweigh the private benefits obtained by the acting group. …

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