Home Rule in a Big World

Einstein sought a unified theory of the physical universe as the small (energy within the atom) got more intriguingly minute and the large (galaxies and their history) became more expansively puzzling. His successors are still searching in both directions.

Here, on our little planet, the running of governments and businesses follows an analogous course.

Governance is focusing on both the bigger and the smaller - local and global affairs. The process not perfect. Far from it. But both the small (local government, small business entrepreneurism) and the large (regional trade blocs, global businesses) are wrestling toward coexistence.

This week the dynamic National Governors' Association is meeting and generating ideas for mending US education, healthcare, transportation, and urban sprawl. It's doing so cheek by jowl with the Clinton administration's grand ambitions in each of those areas. This competition provides a textbook case in how large and small must cooperate to make needed change run efficiently.

A similar large-small push is on in Europe. Devolution - the states' rights movement of Britain - seeks to make home rule in Scotland, Wales,and Northern Ireland bring government closer to people. It does so even as integration into the larger European Union seeks to increase economic opportunity with efficiencies of scale, freer trade, freer movement of labor, tourism, and schooling.

It's tempting to get mushy about how logical these divisions of governance are. But beware of mushiness.

The Clinton administration risks making the same fundamental mistake the Nixon administration did when it championed revenue sharing with the states. The theory is attractive: Central government collects tax money, sends it back to states and cities for use on schools, roads, urban renewal, etc. - with reams of federal rules governing use.

Alas, there's a fundamental flaw in this arrangement. The single tax collection system is efficient. Use of the money at the local level may at first fit a plan. But risks abound. Federal officials may misjudge local needs. Red tape may be too rigid. Local officials may build patronage machines with the jobs funded. And those who disburse the funds have not had to go before voters and take responsibility for taxing to fund programs they run.

Far better, as many of America's creative, practical governors argue, for officials closer to varied local needs to take the heat for taxing and get the credit for tailoring to local needs education, policing, and urban renewal . Federal leaders must then shoulder the task of regulating competition and setting performance standards at home and abroad - and for states and businesses.

Much the same division of authority is surfacing in the new Europe.

Does this division of authority rob federal governments of a a major role? No. It's obvious that national governments still must undertake the huge task of negotiating a level playing field for their citizens and businesses in the new global world.

Clinton must avoid the Nixon miscue: running local programs from D.C.