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Institutional change is needed to accompany changes in production if this is to result in economic growth. Institutional changes can help lower transaction costs and transformation costs. There is no necessary link between rising transaction costs and technical change, and rising transaction costs may result from a move by the supply curve for such services. Transaction costs can be integrated into economic history by use of Coase theory.

The public has revived its interest in the federal system's functions and changes that have transpired through the years. The interest extends to those years prior to the 20th century, with questions on the role of the government on the economy, the existence of centralizing trends, and the interactions involved in federal, state, local government and private sector activities. A comprehensive, quantitative record of US fiscal federalism covering the years 1790-1995 is discussed., As Americans reconsider the relative sizes and roles of federal, state, and local government in the federal system, there is renewed interest in how the system functioned and changed in [...]