DEVOLUTION and RECENTRALIZATION OF WELFARE ADMINISTRATION: Implications for "New Federalism"

ABSTRACT When the Aid to Families with Dependent Children program was created, participating states were made responsible for the administration of the program. States could choose between administering the program themselves or allowing local administration under state supervision. Initially, 32 of the 50 states (64%) opted for the state‐supervised, locally‐administered structure. By 1990, only 15 states (30%) were operating under state‐supervised systems. Amid decades of talk about federal‐to‐state decentralization, seventeen states have chosen to centralize their welfare administration systems. This choice is an important one as there is substantial evidence indicating that administrative structure is an important determinant of program delivery costs and equity. This article uses a logit model to identify the characteristics that have influenced state choice of administrative model. The results suggest that decisions to centralize welfare administration have been systematic choices, driven by geographic, demographic, economic, and political considerations unique to each state.