provision” (Pierson 1995: 325). Questions of political economy trumped questions of federalism.
The history of workers’ compensation offers at least two twists to this way of characterizing policy preemption. First, it appears that questions of political economy differ depending on which levels of government are involved. Within the individual states, changes to workers’ compensation are bounded by concerns that generosity will make the state less economically competitive (e.g., Tarpinian, Tuminaro, and Shufno 1997; Graetz and Mashaw 1999: 85-86). When national officials think about reforming workers’ compensation, on the other hand, questions of political economy are bounded by concerns that powerful third-party providers will object. The second twist is that it is hard to separate questions of political economy and questions of federalism when discussing workers’ compensation. When policy makers contemplated a greater national role, they faced opposition from state bureaucracies and from third-party providers operating within the states. Indeed, it is perhaps precisely because opponents could rely on two different lines of attack, substantive and jurisdictional, that workers’ compensation has resisted federalization, much less nationalization. 34