by Trent MacDonald
Written for the 250th anniversary of 1776, this essay reconsiders the United States as a “system of states” and asks whether federative and polycentric orders can coordinate at scale without drifting toward centralisation. Classical liberal and polycentric theories rightly emphasise the virtues of decentralised authority: competition, exit, experimentation, local knowledge, and institutional diversity. Yet successful systems of states do not merely coordinate across existing units. They also multiply inward, generating new municipalities, agencies, districts, regulatory bodies, and subordinate jurisdictions. This proliferation deepens polycentricity, but it also creates denser interdependence and greater demands for coordination.
The essay argues that centralisation is not simply an external imposition on decentralised systems, nor merely a failure of constitutional design. It is often an emergent property of successful coordination. As federative systems scale, proliferating units require shared standards and interpretive authority, complex hierarchies with structural integration, and collective capacity in the face of systemic risks. The American experience illustrates this federation paradox: a system designed to preserve decentralisation has become more locally differentiated and more centrally integrated at the same time. Nor can exit fully solve the problem, since integration itself raises the costs of exit and reduces the meaningfulness of jurisdictional alternatives.
The challenge for polycentric and interpolity orders is therefore not simply to create decentralised systems, but to sustain meaningful decentralisation as coordination becomes increasingly necessary. The task is coordination without consolidation.
[ click here to read the entire essay ]
Trent J. MacDonald is an economist and data scientist and holds a PhD in Economics from RMIT University. He is available via email here: trentjmacdonald@gmail.com.
Isonomia Quarterly 