ABSTRACT
This chapter examines the interplay between regional and national policy responses to technological change. It begins with discussion of the state role in the American federal system and reviews the historical evidence. The chapter reviews general changes in state governments and discusses their capacity for handling technically complex policy issues. The balancing of political power between the states and the federal government was a central issue confronting the framers of the Constitution. Federal economic regulation began to supersede state regulation with the passage of the Act to Regulate Commerce (1887) which also created the Interstate Commerce Commission—the first of many federal regulatory agencies to follow. The policies and institutions built by different nations in the attempt to deal with the policy challenges of the Second Industrial Revolution differ greatly. The Third Industrial Revolution began around 1960, using the technologies developed during World War II.
