Federalism and Health Care Cost Containment in Comparative Perspective’, Publius: The

Despite widespread agreement over the connection between federalism and social expenditures during times of welfare state expansion, disagreement exists concerning federalism’s role in the retrenchment era. Existing approaches fail to recognize institutional variation among federal states. Analysis of Britain, Germany, and Canada suggests that federalism may promote or hinder health care retrenchment depending upon how it structures the relationship between regional and national governments. Power-sharing federalism hinders health care reform by increasing the institutional obstacles to unpopular cutbacks. Power-separating federalism facil-itates reform by creating opportunities for blame avoidance without substantially increasing the number of veto players. These findings challenge traditional linear or dichotomous models of federalism, suggesting the need for an approach that captures how particular types of federalism affect retrenchment politics. Comparative social policy literature generally relies on a shallow understanding of the role of federalism in welfare politics. Federalism is largely understood as one of a number of institutional ‘‘veto points’ ’ like bicameralism or presidentialism that serves as a brake on welfare state expansion. By fragmenting political authority and increasing the number of decision makers involved in policymaking, federalism expands the opportunities for opponents of the welfare state to block major legislation. Empirical evidence consistently confirms the role of federalism in constraining social expenditures and welfare state programs (Huber and Stephen