It is taken as a matter of course in legal commentary that the US federal structure exacerbated the seriousness of the COVID-19 pandemic by preventing a uniform national response to the public health threat. In his recent book, The Collective-Action Constitution, for example, Neil Siegel asserts that COVID-19 was an issue that “states acting individually” could not solve because the problem “was too large—[its] scope transcend[ed] state borders.”

But Siegel and others gloss over the distinction between something being a common problem among the states and it being a collective-action problem among the states. The distinction may be subtle, but it’s crucial to make when considering optimal institutional design. Different state policies are not perforce failures of coordination and cooperation among the states. Ironically, legal minds from 200 years ago often reflect a better intuitive grasp of the conditions for creating an optimal mix of national and state policymaking than scholars applying modern methodological tools to account for those same conditions.

Policy variation is generally a strength of the US federal system, not a weakness. That is true even when considering life-and-death public health policies. While the US national government was created in large measure to solve coordination and cooperation failures that the states could not solve themselves, the various state-level policy responses to COVID-19 did not, and do not, reflect those triggering structural failures.

Underestimating the Benefits of State-Level Policy Variation in Pandemics

Critics of states taking the lead in implementing pandemic policies misjudge the incentive structure states have to implement optimal pandemic policies; the critics underestimate the benefits of policy variation among the states and overstate the costs and barriers states face to implementing optimal policies.

For example, Yale Law Professor John Fabian Witt, in American Contagions, argued

Decentralization [of COVID policies] meant wide legal variation and poor coordination. … Indeed, state and local divergence in coronavirus policies became a hallmark of American law’s response to the new contagion. Some applauded decentralization, given that different infection rates seemed to warrant different responses, depending on region. But of course nothing in a centralized response would have required a one-size-fits all federal policy.

We can concede to Witt that national policymakers can and often do tailor policies to fit local circumstances. The problem with his criticism is that the existence of differing local circumstances is not the only rationale for different policies among the states. Voters in different states can also hold different preferences over the content of optimal policy for their state. This includes different preferences over risk and the cost of reducing risk in pandemics.

A critical first step when trying to identify optimal institutional structures is that we focus on institutional structure itself rather than use it as a proxy for our substantive policy preferences.

Consider an example outside of the domain of public health: Conservatives hate an “activist” judiciary and liberals love it when judges intervene disproportionately to vindicate liberal policy preferences (as they did during the Warren Court). But conservatives loved an activist judiciary and liberals hated it when judges intervened disproportionately to vindicate conservative policy preferences (as they did during the Lochner era).

In this example, one’s position on “judicial activism” is really only a response to whose ox is getting gored. Our assessment of optimal institutional structure really only reflected substantive political preferences and not what type of judicial institution might be best in the abstract.

The same thing happened over debates about optimal institutional structure in response to public health problems like pandemics. During the COVID pandemic, one’s position on centralized versus decentralized policy often only reflected whether one agreed or disagreed with the substantive policy positions of national-level decision makers relative to the positions of (some) state-level decision makers.

In choosing optimal institutional structures, abstracting the institutional issue from the substantive policy question is necessary. At the very least, circumstances could be easily reversed in the next pandemic. It’s easy to imagine that national-level policymakers in the next pandemic may prefer a less aggressive response to a threatened pandemic than some state-level policymakers.

More importantly, however, we need to recognize that different people naturally hold different preferences over risk. Some people buy insurance with high levels of coverage and low deductibles, others buy little or no coverage or choose high deductibles. Some of us buy lottery tickets; others think it’s foolish. So, too, voters in different states naturally differ in preference over risk and in preferences over the costs they want to assume to insure against risk.

That different sets of voters in different states prefer different mixes of risk and safety does not in itself reflect state-level coordination or cooperation failures.

Talking about benefits and costs regarding pandemic policies in which lives are being lost is often styled as heartless. The thing is, though, we all place an implicit price even on our own lives. All of us make tradeoffs between risk and reward every day. Making that tradeoff is no less avoidable in public policy than it is in our individual lives. And this is how economists calculate the value of a life. Not by imposing their valuation on the lives of others, but by backing out the value that we place on our own lives.

Science might tell us what the different risks are, but there is no correct scientific answer to the question of what risks and tradeoffs we are willing to make given the information. Risk preference is just that, a preference. Consequently, it is not intrinsically illegitimate (let alone “unscientific”) to consider the cost of lost education for our children as a result of schools being closed precipitously in the face of a threatened pandemic, or to ask about economic losses and their impact on the less affluent among us or on the provision of needed governmental services.

That different sets of voters in different states prefer different mixes of risk and safety does not in itself reflect state-level coordination or cooperation failures. It just reflects different preferences among the people inhabiting different states.

The critics of COVID policy diffusion, however, suggest that they’re not complaining about different preferences among the people of different states. Rather, they suggest it’s a structural or systemic concern that one state’s policy choice imposes a cost on another state. And the problem of one state exporting its problem to another state is what the US national government was formed to prevent.

This possibility, however, even regarding something as serious as pandemic policy, is exaggerated.

Overestimating the Costs of Policy Diffusion

Critics of the state-driven pandemic response underestimate the benefits of policy diffusion and overestimate the cost of state-level policy heterogeneity.

To be sure, the critics’ claims sound superficially plausible. Yet the asserted cost of heterogeneous state-level policies largely evaporates on closer inspection. While states do face collective action problems in some areas, and those problems justify centralized national action, pandemic policy is not one of those areas.

The basic argument of the critics is this: in a country like the US, with a highly mobile population and a highly integrated system of interstate transportation, states that implement less aggressive pandemic policies—say, opting to keep schools open longer than other states—will effectively undermine the policies in states that adopt more-aggressive policy responses. One state allowing the disease to spread more broadly than a second state cannot help but export that disease to the second state. And avoiding situations in which one state can forcibly export its policy problems to other states is one reason the US created a strong, centralized national government in the first place.

Yet the pathological incentive structures that result in cooperation and coordination failures between states—and which serve as the rationale for delegating specific policy domains to the national government—do not exist when it comes to state-level pandemic policies.

To motivate the efficacy of state-level action in the face of infectious threats, we can start by noting that, even today, the state of California runs its own system of inspection stations to interdict the importation of fruit that could threaten the state’s domestic fruit production. Further, the state claims that its inspection system is highly effective at preventing the importation of threatening pests and disease from other states.

Although pitched as an issue of institutional design, the criticism of diffuse state COVID policies was little more than a poor proxy for substantive policy preferences.

Deterring the importation of a pandemic-level communicable disease from other states would implement a system similar to this model, albeit almost certainly strengthening and intensifying it given the risk to human life.

States have long held, and continue to hold, a great deal of authority that allows them to prevent health threats from being imported from other states. State efforts must be evidence-based and not simply blunderbuss restrictions. Nonetheless, the evidentiary requirements to justify even very aggressive state-level restrictions are not particularly high. States can require testing or even temporary isolation prior to admitting someone into the state. As the Supreme Court declared in 1926,

It is well settled that a State in the exercise of its police power may establish quarantines against human beings or animals or plants, the coming in of which may expose the inhabitants or the stock or the trees, plants or growing crops to disease, injury or destruction thereby, and this in spite of the fact that such quarantines necessarily affect interstate commerce.

To be sure, states need not go it alone. Centralizing information gathering and analysis at the Federal level is common sense, and Federal intervention can support the integrity of state-level policy choices. Yet the voters in different states can legitimately hold different views of what policies to pursue—what mix of risk and insurance they prefer—in light of that information.

Pandemic Policy Diffusion is Fully Consistent with the Purposes of National Governance

And, yet, isn’t a nationwide epidemic exactly the sort of problem that the US national government was created to solve? To quote Neil Siegel again, it is a common opinion that “states acting individually” could not have succeeded in responding to COVID because “its scope transcend[ed] state borders.”

Siegel several times points to Chief Justice Marshall’s dictum in Gibbons v. Ogden in support of his argument that appropriate national-level concerns are those that affect “more states than one.” Certainly COVID-19 meets that criterion, and so meets the threshold justifying a national-level rather than a state-level response.

The problem is that Siegel and other commentators invoking Marshall’s argument stop reading too soon. Marshall explains his claim more fully just a couple of sentences later in the same paragraph:

The genius and character of the whole government seem to be that its action is to be applied to all the external concerns of the nation, and to those internal concerns which affect the States generally, but not to those which are completely within a particular State, which do not affect other States, and with which it is not necessary to interfere for the purpose of executing some of the general powers of the government.

Crucially, Marshall identifies three conditions in his summary statement of powers delegated to the national government. He argues that national authority extends

1. to internal concerns which affect the states generally; but does not extend to concerns that
2. are within a particular state and do not affect other states; and
3. with which it is not necessary for the national government to interfere.

It is not a cooperation or coordination failure for states merely to adopt different policies, even over life-and-death issues such as pandemic policies. Rather, the “failure” bit maps onto Marshall’s “necessity.” There needs to be something that prevents independent state action from being able to achieve optimally preferred state policies. Yet these sorts of structural or incentive problems just don’t exist with pandemic policies.

After all, the incentive structure of pandemic policies do not induce a “race-to-the bottom” among states. Nor, as discussed just above, does the lack of nationally coordinated policies threaten states: even when neighboring states adopt different responses to a pandemic, more interventionist states have expansive authority not only to stipulate aggressive public health policies within their own borders, but to adopt polices at their borders to aggressively deter the entry of transportable diseases into their states from other states. The efficacy of an inspection or control station at a state border does not depend on the inspector wearing a badge issued by the federal government rather than one issued by that state’s government.

The incentive structures states face individually do not hinder their ability to respond to pandemic concerns consistent with the preferences of their states’ voters. The sort of pathological state-level incentive structures that induced the delegation of specific policy domains to the national government simply do not exist with regard to state-level pandemic policy-making.

Although pitched as an issue of institutional design, the criticism of diffuse state COVID policies was little more than a poor proxy for substantive policy preferences: Commentators simply disapproved of the cost-risk choices in states that implemented COVID policies less aggressive than their preferred policies. Ironically, these same critics would likely rediscover the virtues of diffuse state-level policy-making if the situation were reversed and national-level officials preferred to implement uniform national-level policies less aggressive than the critics preferred. If we abstract away from the issue of whose ox is getting gored and consider institutional design in the abstract, the benefits of diffuse state-level pandemic policies remain substantial, and states can readily deter the importation of disease from other states if they wish. State-level COVID policy was the optimal design for the pandemic, and remains the optimal design for future pandemics.