Pitfalls of the Collective Action Theory of Constitutional Federalism

Co-blogger Jonathan Adler points out several weaknesses in the collective action theory approach to interpreting constitutional federalism advocated by a number of academics, most notably Robert Cooter and Neil Siegel. The theory has been used as a tool for defending the constitutionality of the individual mandate, though I have argued that it may actually cut the other way because there is no collective action problem preventing individual states from enacting health insurance mandates of their own – at least not if the mandate has the beneficial effects that advocates ascribe to it.

Last year, I reviewed Cooter and Siegel’s excellent Stanford Law Review article on the subject for the Jotwell website. Although I called the article a major contribution to federalism scholarship, I also had several major reservations about their theory. Its most important flaws are that it doesn’t square with the text of the Constitution, and that it ignores the possibility that federal legislation can create collective action problems as well as solve them:

Despite its impressive strengths, Cooter and Siegel’s analysis also has a few problems. It is far from clear that Article I really gives Congress unfettered authority to solve any and all collective action problems among the states. If that were the case, why would the Founders have bothered to carefully enumerate seventeen separate powers plus the Necessary and Proper Clause, instead of a single catch-all “Collective Action Clause?” To their credit, Cooter and Siegel foresaw this issue and tried to address it by arguing that the enumerated powers are not meant to be an exhaustive list, but an illustrative one. Yet it seems unlikely that a merely illustrative list would be so long and precisely detailed. Moreover, treating the list as illustrative renders the Necessary and Proper Clause superfluous. Under that approach, Congress would already have had the power to enact any measures “necessary” to solve any collective action problem, even if they were not specifically listed.

Second, Cooter and Siegel’s framework might actually negate certain specifically enumerated powers if it turns out that they are not needed to solve any collective action problems. Consider Congress’ power to “establish post offices.” It is now clear that private firms such as Federal Express can deliver the mail just as effectively as the federal government, if not more so. And they can easily exclude would-be free riders who try to get away with not paying for postage. Does that render the US Postal Service unconstitutional?

Most importantly, Cooter and Siegel do not consider the possibility that the Constitution should be interpreted to curtail federal government policies that create “public bads,” as well as facilitate those that provide public goods. Just as Congress can solve collective action problems, it can also create them. To take one common case, it can enact special interest legislation that benefits small, well-organized groups at the expense of the general public. The repeal of such laws then becomes a nationwide collective action problem, one that the public often fails to solve because individual citizens and states have strong incentives to free ride on such matters….

Cooter and Siegel rightly argue that “[a] federal constitution ideally gives the central and state governments the power to do what each does best.” But a federal constitution must also protect against the dangers posed by both state and federal power. A powerful central government is often “best” at solving national collective action problems. But it is also often the “best” at creating them.