The paper by Tannenwald examines the recent debate on devolution of fiscal responsibilities from the U.S. federal government to the States. Over the last 70 years, the share of federal spending out of total government outlays doubled, reaching 61 per cent. This trend appears inconsistent with the important role that the Constitution assigns to States. Since the 1990s, a rebalancing of responsibilities has been widely discussed. A “devolution revolution” has been considered. Several economists have highlighted the efficiency benefits of devolution and suggested several policy changes, such as the reduction in federal aid to state and local government, the substitution of block grants for matching entitlements and greater flexibility for states in making use of federal grants. Tannenwald notes that the political support for devolution has not actually been very strong and that the federal government has mostly retained its dominant role. He illustrates this point by analysing the policies concerning health care for children, health care for low-income households (the Medicaid program), and federal assistance for primary and secondary education. He shows that matching requirements and constraints on the use of federal funds still have an important role.