Looking inward, looking outward: The politics of stare welfare innovation under devolution

Theories of federalism supporting the devolution of welfare policy to the s tates suggest that the removal of national policy controls will allow state s to tailor-make welfare policy to fit local needs and preferences. These t heories predict that state policymaking under devolution will respond mostl y to state-specific factors. Alternative theories of federalism suggest tha t devolution will increasingly expose stales to national and interstate pre ssure, and that state policymaking will follow primarily national factors. We use data on AFDC waivers granted to states from 1977 through the end of the program in 1996 to test these competing approaches. National factors te nd to be more important than state-specific factors in shaping state welfar e innovation, supporting competitive theories of federalism, although welfa re innovation, unlike benefit levels, does not seem to be susceptible to th e "welfare magnet" phenomenon.