Top Down Funding
November 3, 2014

The United States is a really large country (316.1 million in 2013, according to Google) and in a country as big as this I do not think it is very wise to fund development from the top down.

For example, let's say that congress, somehow, finds $100 billion and decides to invest it in infrastructure. If that money is evenly divided between the 50 states, that would be about $2 billion for each state. However, we know that would not be the case - and would probably be considered unfair by most as California and Vermont would both get the same amount of money, despite California having 60 times the population of Vermont. Likely, it would be a competitive program where the federal government would ask local municipalities to submit proposals, and the money would be granted to specific projects.

Every municipality would have their own list of proposals to submit, as would America's large cities such as Dallas, Houston, Miami, D.C., New York, Boston, Chicago, Seattle, San Francisco, and Los Angeles. These high profile cities are likely to be placed at the top of the priority list, taking the lions share (more than their $2 billion per state if it were equally divided), leaving the rest of us (cities such as Oklahoma City, Little Rock, Memphis) with scraps, if anything. If Little Rock gets hardly anything, what chance does my small city of Conway with only 63,000 have at getting anything?

I wonder if this is what fuels some of the political divide between Republicans and Democrats on government spending. Even though Arkansas actually gets back more from the federal government than what it pays in taxes, to the common observer that sees their federal tax money being spent on pet projects in these far off cities, they are going to feel like they are missing out and getting the short end of the stick - especially on these great big ambitious spending programs.

Top down solutions can work, and a large part of if it works depends on the context. In a country of only five million people and three major cities, it is possible to have a representative from each region in the room, talk about their needs, and come to some sort of agreement where most of them are happy. In a country that small, everyone in the room has probably travelled to each other's city and has a good idea of their needs firsthand. But, in the United States, with around 20,000 incorporated areas with 10,000 or more residents and 388 metropolitan areas it is not as feasible to do this and to give everyone a voice. Because everyone cannot sit around a table and hear each other out, it would likely be competative program where the most vocal and powerful (the large cities) come out ahead.

The United States is so large that American states are equivalent in population to other countries;

StateClosest Country
Alabama (4,822,023) Lebanon (4,821,971)
Alaska (731,449) Comoros (734,917)
Arizona (6,553,255) El Salvador (6,340,454)
Arkansas (2,949,131) Armenia (2,976,566)
California (38,041,430) Sudan (37,964,306)
Colorado (5,187,582) Turkmenistan (5,240,072)
Connecticut (3,590,347) Oman (3,632,444)
Delaware (917,092) Fiji (881,065)
Florida (19,317,568) Côte d'Ivoire (20,316,086)
Georgia (9,919,945) Hungary (9,954,941)
Hawaii (1,392,313) Trinidad and Tobago (1,341,151)
Idaho (1,595,728) Gabon (1,671,711)
Illinois (12,875,255) Chad (12,825,314)
Indiana (6,537,334) El Salvador (6,340,454)
Iowa (3,074,186) Lithuania (3,016,933)
Kansas (2,885,905) Mongolia (2,839,073)
Kentucky (4,380,415) Georgia (4,340,895)
Louisiana (4,601,893) Central African Republic (4,616,417)
Maine (1,329,192) Bahrain (1,332,171)
Maryland (5,884,563) Nicaragua (6,080,478)
Massachusetts (6,646,144) Laos (6,769,727)
Michigan (9,883,360) Hungary (9,954,941)
Minnesota (5,379,139) Singapore (5,411,737)
Mississippi (2,984,926) Armenia (2,976,566)
Missouri (6,021,988) Nicaragua (6,080,478)
Montana (1,005,141) Fiji (881,065)
Nebraska (1,855,525) Gambia (1,849,285)
Nevada (2,758,931) Jamaica (2,783,888)
New Hampshire (1,320,718) Bahrain (1,332,171)
New Jersey (8,864,590) Austria (8,495,145)
New Mexico (2,085,538) Lesotho (2,074,465)
New York (19,570,261) Côte d'Ivoire (20,316,086)
North Carolina (9,752,073) Sweden (9,571,105)
North Dakota (699,628) Comoros (734,917)
Ohio (11,544,225) Guinea (11,745,189)
Oklahoma (3,814,820) Bosnia and Herzegovina (3,829,307)
Oregon (3,899,353) Mauritania (3,889,880)
Pennsylvania (12,763,536) Chad (12,825,314)
Rhode Island (1,050,292) Timor Leste (1,132,879)
South Carolina (4,723,723) Ireland (4,627,173)
South Dakota (833,354) Guyana (799,613)
Tennessee (6,456,243) El Salvador (6,340,454)
Texas (26,059,203) Ghana (25,904,598)
Utah (2,855,287) Mongolia (2,839,073)
Vermont (626,011) Montenegro (621,383)
Virginia (8,185,867) Tajikistan (8,207,834)
Washington (6,897,012) Togo (6,816,982)
West Virginia (1,855,413) Gambia (1,849,285)
Wisconsin (5,726,398) Denmark (5,619,096)
Wyoming (576,412) Western Sahara (567,315)

If Sweden can be relatively independent and responsible with 9.5 milion citizens, why could North Carolina not also be independent and responsible with 9.7 million citizens? I am not saying that North Carolina should succeed and become an independent country with its own currency, military, and border control - having an open border policy, a shared currency, and pooling your military resources together is good. When it comes to managing the needs of your citizens - funding education, infrastructure, healthcare, welfare - how are states, which are the sizes of countries, not equipt to handle their local everyday needs themselves?

If Denmark can do it with 5.6 million citzens, why could not Wisconsin with 5.7 million citizens? If Singapore can do it (5.4 million) why could not Minnesota (5.3 million)?

"Without the federal government, how would we have the money to provide these things?"

Where does the federal government get their money? Through taxes or through debt - which will eventually have to be off paid through taxes. It makes sense that with the money saved through less federal spending, state governments could collect and spend more instead. The overall tax burden to the citzens would be the same, only that a larger portion would be collected at the state level rather than federally.

With too much top down control, we risk creating a monoculture. What if the federal government came out with a national city planning guidebook - and every town and city was planned with the exact same zoning code, streetscape, architecture, and layout? Where would be the fun in travelling?

With too much top down control, we risk hindering innovation. How can we tell if an alternative is better if there is a single national healthcare, education, or infrastructure system? Americans rarely compare themselves to other countries, but they do to other states. If we had 50 states each with their own healthcare, education, and infrastructure systems - going from completely state run to completely free market with every combination in between - Americans would have a better chance of seeing what works.

I am not completely for or against federal involvement in healthcare, education, infrastructure, and other issues. But, I do think we need to be sensible and put things into perspective depending on their context. When it comes to funding, in particular, I think those in charge of distributing funding should be as close to the bottom as possible - where it will be spent.

Everything depends on context. I think trying to micromanging and fund the infrastructure of 388 metropolitan areas from the top down is silly and unfair. At best, you will have a handful of cities that get most of the money with really great infrastructure, and everywhere else will be subpar and underfunded. On the other hand - things of national interest like the military would be silly to manage and fund from the bottom up (a militia per city?)