Federalism reflects a continually changing compromise between advocates of a strong national government and those who advocate strong state government. Under dual federalism, national and state governments were thought to be responsible for separate policy areas. With cooperative federalism (our current arrangement), the state and national governments share responsibility for most domestic policy areas.

State cultural identities (individualistic, moralistic, and traditionalistic) contribute to the policy differences among the states. The primary tools used to influence the rules of state politics have been the state constitution and mechanisms of direct democracy, including referenda, initiatives, and recall elections.

Contemporary federalism has required new, and sometimes difficult, agreements between state governments and their citizens. For the most part, state institutions (legislatures, courts, governors) have become stronger and more efficient in the process.

American local government—towns, cities, and federal power struggles, localities frequently ask states for more independence to address local problems.

State and local governments provide citizens with many opportunities for participation should they choose to get involved. Even if they don't participate in the usual ways, citizens exert a unique kind of power over their states and localities: they can move away, or vote with their feet.