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Abstract
In this research, I explore the role of state policy innovation in the American federal system and determine the extent to which the historical reference to the states as laboratories of democracy is accurate. I examine state policy innovation in terms of the states' dual roles of governing their own affairs and implementing federal programs. I define state-dominated policies as those falling primarily under the states purview with little to no federal involvement. I define state innovations falling under the federal umbrella as those initiated under section 1115(a) waiver programs. By focusing on the dual nature of state policy innovation, I expand my research to two phases of the policymaking process; I compare and contrast state patterns of innovation at legislative adoption and at implementation.
To determine whether the states serve as true laboratories of democracy, I analyze the impact of political ideology, controlling for other factors, on state policy innovation. Is there a relationship between political ideology and state innovation behavior? Do state patterns of innovation differ based upon state ideological orientations? Are there comparative differences in the impact of political ideology on the innovation when the policy occurs outside or inside the federal umbrella? Do the states reference the behavior of other states with which they share similar ideological orientations?
To study state policy innovation, I use data on state health policies and Medicaid waiver programs. The state-dominated policies are high-risk pools, market reforms, health alliances, medical savings accounts, and child health insurance programs. Comparative, event history analyses of state legislative adoption and implementation of these policies combined with an analysis of state policy designs indicate the following. First, states have developed and submitted Medicaid 1115 waiver proposals to the Health Care Financing Administration as frequently as they have adopted their own reform measures. States tend to act as willing partners with the federal government in exploring new policy alternatives. Second, political ideology significantly influences state innovation behavior, with the predominant ideological philosophy varying by the type of policy and design. State policymakers respond to citizen preferences during legislative adoption and reflect government official preferences during implementation.
