Devolution and Deregulation: The Paradox of Financial Reform

In most areas of economic regulation, the movement toward greater state autonomy has been associated with deregulation both as a theoretical and as a political matter. In theory, devolution encourages deregulation by giving individual states discretion to relax the uniform rules typical of federal regulatory programs. Not surprisingly, state empowerment has found favor among politicians looking for ways to roll back intrusive federal economic regulation.