Functional theory is optimistic. It says that each level of the federal system is well designed to carry out the tasks for which it is mainly responsible. They shift unpopular burdens to lower levels of government while spending national dollars on popular government programs for which they can claim credit. Both theories are used to explain different aspects of American federalism.
Legislative theory explains why federal grants have never been used to equalize public services.
Elected officials cannot easily justify to their constituents a vote to shift funds away from the geographic area they represent. The overall direction that American federalism has taken in recent years is better explained by functional theory. As the costs of transportation and communication have declined, labor and capital have become increasingly mobile, placing states and localities in greater competition with one another. State and local governments are responding to these changes by overlooking the needs of the poor, focusing instead on economic development. As a further consequence, older, big cities of the Rust Belt, inefficient in their operations and burdened by social responsibilities, are losing jobs and population to the suburban communities that surround them.