ABSTRACT
This chapter considers the regulatory response in federal systems. The core of the study of polycentric governance is a debate about the fundamental nature of government and governance. Economists have long seen federalism as desirable because it increases the efficiency of public goods provision as long as people are able to “vote with their feet” in response to public policies with which they disagree. In the US federal system, Congress has substantial authority to regulate issues that transcend the boundaries of any single state. The Canadian constitution divides authority between a federal government and provincial and territorial governments. The technological aspects of shale suggest that policy experimentation may be desirable once shale development proceeds. Polycentric governance is the foundation of a self-governing society. In such systems, governance is shared, including at the municipal level, at multiple levels.
