Skip main navigation

The Role of the State in the Economy

Professors Cecilia Testa discusses federalism and the role of the state in the economy from an economic perspective.

Alexander Hamilton advocated a strong unitary national government where states would only have limited powers. However, federalism was the more appropriate structure to bring the individual states together as one into the United States of America. Federalism is defined as the division of powers and functions between national government and state governments.

Professors Cecilia Testa discusses how federalism functions in the America. She compares both centralization and decentralization looking at their advantages and disadvantages. Cecilia also comments on how the balance of power between the federal and state governments has changed over time.

In the comments below, discuss where you think the balance of power should lie within a country. Do you believe that either centralization or decentralization of power is the better than the other? Why do you think so?

This article is from the free online

The Politics of Economics and the Economics of Politicians

Created by
FutureLearn - Learning For Life

Reach your personal and professional goals

Unlock access to hundreds of expert online courses and degrees from top universities and educators to gain accredited qualifications and professional CV-building certificates.

Join over 18 million learners to launch, switch or build upon your career, all at your own pace, across a wide range of topic areas.

Start Learning now