As the literature on federalism and decentralization experienced a revival in recent years, comparative research has tended to fall into two categories. The first examines the origins of institutions, seeking the causes of decentralization and federalism. The second explores the consequences of decentralization and federalism for such outcomes as fiscal performance, economic growth, and the welfare state. The two books under review respectively make important contributions to each field. In both instances, we see that federalism and decentralization remain lively topics of concern for comparative politics.

In her book on the causes of decentralization in Latin America in the 1980s and 1990s, Kathleen O'Neill begins by rightly pointing to the important distinction often made between historical cases of federalism, where states “selected” their institutional forms at their founding, versus contemporary instances of formerly centralized states pursuing strategies of decentralization. Her theory is clearly intended to encompass cases that fall into the latter category. Decentralizing the State is a comparative treatment of the experiences of decentralization in Bolivia, Columbia, Ecuador, Peru, and Venezuela in the 1980s and 1990s, with some discussion of Argentina, Chile, and Mexico. The author's central aim is to explain why and when the national governments of her empirical cases “effectively decentralized,” defined very specifically as the joint adoption of fiscal and political decentralization. She reviews and dismisses a range of plausible hypotheses that might at first glance seem to explain “effective decentralization,” including international pressure, pressure from “below,” efficiency concerns, and fiscal crisis. Instead, she argues and then demonstrates with a combination of qualitative and quantitative analysis that electoral incentives shape the push for decentralization. In brief, her argument is the following: National governments decentralize when national executives believe that their own political party can expect to gain more votes at the subnational level than at the national level in future elections.

The analysis proceeds in three main steps. First, a formal model is brought to bear on the problem, making the author's basic intuition more explicit. Second, she analyzes 26 episodes of decentralization across five countries, conducting regression analysis and carefully reconstructing vote totals at local and national elections for more than 40 years. Here, the proposed argument that national executives choose to decentralize when it is in their parties' electoral interests convincingly holds up against the evidence. However, only two of the seven alternative theories are actually subjected to this same rigorous analysis, although O'Neill at several points sensibly suggests that these competing arguments contain a “partial explanation” (p. 28). Thus, the reader is left wondering: What role do these alternative arguments actually play? The third part of the book contains its empirical centerpiece: in-depth case analysis of her five main national cases. O'Neill has a keen eye for relevant evidence and demonstrates the importance of electoral factors in motivating decentralization reforms. In the last chapter, she modestly reflects on the limits of the argument when applied to other Latin American cases.

Overall, the parsimonious work is convincing as far as it goes. But parsimony is achieved, arguably, at the expense of conceptual and theoretical nuance. First, as O'Neill concedes in the last chapter, her conceptualization of “effective decentralization” (as joint fiscal and political decentralization) fails to distinguish the various dimensions of decentralization. To dichotomously code cases as “decentralized” only when both fiscal and political decentralization occurs uses an expansive category that may miss much of the action. Again, as she implies and other scholars have demonstrated, the interaction and sequencing of different types of decentralization, including “administrative” decentralization (which is altogether absent from this analysis), is crucial. Would the story look different if a graded or multidimensional operationalization of decentralization were used, rather than a dichotomous one?

Second, in terms of theory, for similar reasons there is a bit of slippage. At times, the book's stated aim is to explain “decentralization's preconditions” (p. 15), and at other points, the purpose is to develop a more modest “theory of political motivation” (p. 44). O'Neill convincingly makes clear that political executives, when unconstrained by legislatures, will prefer and thus seek decentralization if it is in their electoral interest. However, it is arguable that what she calls “a theory of political motivation” is insufficient as a theory of “institutional outcomes.” Indeed, one can ask: Under what conditions can national executives actually translate their preferences into institutional outcomes? And, further, how well does such a theory, centered exclusively around national executives, hold for the more complex situations in which national legislatures and other actors, such as subnational elites and bureaucracies, also shape decentralization plans? Finally, do not the genuine “problem-solving motivations” of political elites who are attempting to solve real governance problems deserve some consideration? In sum, O'Neill's carefully constructed work sets a useful baseline for others who might be interested in exploring how electoral incentives intersect with other factors that determine why and when decentralization occurs.

Turning from causes to an exploration of consequences, Federalism and the Welfare State is a collected volume of essays that examines, in a theoretically disciplined fashion, six established federal democracies (Australia, Austria, Canada, Germany, Switzerland, and the United States). The work makes the case that federalism does matter, but not in the straightforward fashion that conventional approaches assume. Classical public choice approaches, the authors note, view federalism as a “competition among jurisdictions” and as a vehicle for restricting the growth of the state. Similarly, historical institutionalists emphasize the role of fragmentation and “veto-players,” regarding federalism as a constraint on welfare states. The central argument in this volume adds nuance to these traditional claims: Federalism does not exert a uniform impact on social policy. Instead, it is mediated by the type of federalism and the timing of federalism's development vis-à-vis the historical process of democratization

The book is structured around a synthetic introduction and conclusion (written by the editors), as well as six national case studies. First, the authors ask why quantitative cross-national findings demonstrate that federal political systems, other things being equal, spend much less than unitary states on social welfare? And, given this empirical regularity, what explains the diversity among federal systems? Here the authors aim to refine the most obvious contrast between two “families” of federalism: intrastate European federal systems (Germany, Switzerland, and Austria) that one might suspect are more “generous” welfare states and interstate Anglo-Saxon federal systems (Australia, Canada, and the United States) that one might imagine are less generous. As the case studies reveal, such a neat divide overlooks commonalities across types and diversity within each type.

Second, the authors adopt an alternative approach, summed up in the words of the author of the Canadian case, Keith Banting, who writes, “Different models of federalism have distinctive implications for social policy, and … different models of federalism can co-exist within an individual federal state” (p. 90). The authors identify two institutional factors that cluster in different national systems in different formations. The first factor can explain the diverse timing and early development of welfare states. If welfare states were created in nondemocratic regimes, as in pre-1920 Austria and pre-1918 Germany, they served the function of regime legitimation, giving rise to early and expansive welfare programs. By contrast, if welfare states were implemented in already democratic federations (Canada, the United States, Switzerland, and Australia), institutional veto-points were robust and subnational units often already carried out many welfare functions, delaying welfare state policies and limiting their early growth.

The second factor is the type of federalism. Here, the authors demonstrate diversity among the basic institutions normally associated with federalism, such as upper chambers, constitutional courts, constitutional referenda, formality of intergovernmental relations, and the decentralization of public finance. The authors accept the conventional view that veto-points inhibit welfare state growth. But when such veto-points are absent, they note, federalism can in fact contribute to expansion of welfare states. For example, Herbert Obinger demonstrates that Austria's weak upper chamber failed to block key social policy legislation in the 1970s and 1980s, contributing to welfare state growth (p. 205). Philip Manow identifies Germany's anomalously highly centralized fiscal system as a source of its expansive welfare state (p. 224). And Keith Banting argues that unlike most policy areas shaped by Canada's classical “separate jurisdictions” federalism, its universal health system was facilitated by a “shared cost” style of federalism that reduced veto-players in this arena alone (p. 111).

The third step of the book's argument entails the ambitious effort to expand the range of outcomes being explained. Not simply explaining the timing of welfare state adoption, nor its overall level of expenditures, the authors are also interested in the dynamics of retrenchment, the prospects of policy innovation, and the “feedback” effects of the welfare state on federalism. The conclusions can be summarized in three observations: First, the findings confirm veto-player theory that federalism is status-quo preserving, usually blocking retrenchment efforts; second, the authors identify five conditions of policy innovation (pp. 341–43); and finally, they specify the welfare state's intended and unintended “feedback” effects on federalism.

In sum, this is a wide-ranging and compelling collection of essays that is essential reading for comparative scholars of welfare states and federalism. If there are any criticisms to be made, it is only with regards to the scope of the book's ambition and the degree to which competing arguments are successfully engaged. First, the range of questions asked (the welfare state's timing of development, level of expenditures, and dynamics of retrenchment) are not easily captured by a single “synthetic” theoretical framework that the authors aim to construct (pp. 42–44). Second, with a single-minded focus on federalism as a determinant of welfare state development, we are left not knowing how precisely to weigh federalism's impact vis-à-vis other traditional arguments. Nevertheless, the authors have successfully highlighted novel and underappreciated features of federalism, leaving it to future research to assess how much these factors matter when weighed against variables highlighted by other approaches.