Using benefit-cost criteria for settling federalism disputes: An application to food safety regulation

Federalism disputes arising from state regulations, particularly those pursuing health, safety, and environmental goals, are common in the U.S. political system. Discussion of bases for settling such disputes often focuses on the in- and out-state incidence of benefits and costs, but incidence is a complex concept that has not been systematically analyzed. We discuss five dimensions important to evaluating incidence and present benefit-cost spillover criteria for judging federalism disputes. When applied to a Massachusetts regulation of Alar residues in heat-processed apple products, the criteria reach different conclusions on its appropriateness, highlighting key considerations in evaluating state regulation in a federal system.