Policy Feedback and Interdependence in American Federalism: Evidence from Rooftop Solar Politics

This paper amends and expands the classic notion of states as “laboratories of democracy,” whereby mechanisms of learning and competition lead to the diffusion of successful state policy experiments across the federal system. Drawing from policy feedback literature, I develop a new framework for studying policy interdependence. State-level reforms that benefit particular organized interests also strengthen them politically. These interests, in turn, might have an economic incentive to apply newfound strength to seek to propagate the reforms that benefit them. As a result, state policies can “feed into” the interest group politics in other states, potentially driving policy diffusion. I study the case of rooftop solar policy, an area in which state-level decisions have been fundamental to industry growth and the emergence of installers as political actors. Bringing together a variety administrative, lobbying, and policy data, I demonstrate that solar installers used resources amassed in leading states to seek to shape policy elsewhere. Quantitative and qualitative evidence suggest these efforts had implications for state policy decisions. Theoretically, this paper expands conceptions of interconnection across federal systems of government. For reformers, it suggests that subnational policy can be a crucial ingredient in building coalitions for (geographically) broader policy reform.