Decentralization, devolution, financial shortfalls, and state priorities in service programs in the early 2000s

Abstract

Although decentralization and devolution in some ways increase state governments' discretion, they in other ways may limit that discretion. The current study tests the thesis that, at least in the early 2000s, discretion declined in some states' substance abuse service systems; states experiencing a financial shortfall came to adopt the federal government's service priorities. These states largely acted because of the institutional dominance of the federal government. The thesis is supported by analyses of two waves of data from a nationally representative sample of providers of outpatient substance abuse services. The study considers several uses of the findings: supplementing the perspective that argues that states lose discretion due to decentralization and devolution-induced economic disincentives, understanding the diffusion of federal policies relating to the Temporary Assistance to Needy Family program, generally suggesting some limits to state discretion, and thus helping to reconceptualize the benefits and costs of decentralization and devolution. © 2012 The Author.