Richard Devillier and his family owned property abutting a highway in northern Texas, alongside other property owners. Texas built a dam next to their property to keep flood waters from flowing across the highway, which would have made it impassible. But this damming to protect the highway instead flooded and damaged the Devilliers’ property. When the Devilliers and other property owners sued for the taking of their property via the flooding, their claim was dismissed because states are sovereignly immune from lawsuits.

The Devilliers had sued in state court, claiming that the state owed them compensation under the Fifth Amendment’s Takings Clause, but the state of Texas removed the case to federal court under 28 U.S.C. § 1441. Once in federal court, Texas moved to dismiss, arguing that a claim could not be brought directly under the Fifth Amendment. Texas argued that instead the Devilliers needed to bring a 42 U.S.C. § 1983 claim. Section 1983 allows individuals to sue any “person, who under color of any [state] statute, ordinance, regulation, custom, or usage” violates that individual’s constitutional rights. The catch is that although “person” has been interpreted to include municipalities, it does not include states. So if a city violates someone’s constitutional rights, that person can sue, but not if a state violates her rights.

Texas’s arguments impermissibly create an unconstitutional “Catch 22”—if the citizen sues in federal court, the government will argue that there is no federal cause of action, but if the citizen sues in state court, the government will just remove to federal court.

The federal court denied Texas’s motion, deciding that the Takings Clause—which states that “private property [shall not] be taken for public use, without just compensation”—required the payment of compensation and allowed suits to obtain compensation. Texas appealed, and the Fifth Circuit reversed the lower court, deciding in a three-sentence opinion that there is no federal cause of action to sue for takings against state governments.

The Devilliers and the other property owners have petitioned the United States Supreme Court for review, and the Cato Institute has filed an amicus brief in support, along with law professor Ilya Somin.

Cato’s brief explains that the Fifth Amendment is self-executing—by promising a remedy of just compensation for takings, the Constitution provides a remedy in itself. No statutory right is required to sue because the Constitution gives one. The Takings Clause is the only provision in the Bill of Rights to provide a remedy when a right is violated—therefore a separate cause of action is not required to sue for takings.

In its important decision in Knick v. Township of Scott (2019), the Supreme Court reversed Williamson County Regional Planning Commission v. Hamilton Bank (1985)—a ruling that required plaintiffs with takings claims against state and local governments to first exhaust state-court remedies before seeking relief in federal court. The Court recognized in Knick that this state-litigation requirement created another impermissible “Catch-22” in which plaintiffs could not “go to federal court without going to state court first; but if [they went] to state court and los[t], [their] claim[s were] barred in federal court.”

In reversing Williamson County’s atextual exhaustion requirement, Knick established the important principle that takings plaintiffs are entitled to their day in federal court.

But the Fifth Circuit’s failure to recognize the constitutional right to sue states for takings in federal court creates a lose-lose situation for victims of takings. By holding that Fifth Amendment takings claims against states are simultaneously removable to federal court and nonjusticiable in federal court due to the purported lack of a federal cause of action, the Fifth Circuit has effectively barred takings claims against states from both state and federal court. That holding is untenable under Knick. The Supreme Court should hear the Devilliers’ claim and reverse the Fifth Circuit’s unconstitutional decision.

Tomorrow, the House Financial Services Committee’s Digital Assets Subcommittee will hold another hearing on stablecoins (crypto tokens pegged to the value of another asset like the U.S. dollar).

Ahead of the hearing, the Subcommittee released two new discussion drafts of stablecoin legislation, a 74-pager and a 34-pager. These drafts appear to be the reported separate partisan efforts by Democrats and Republicans after they essentially disowned an earlier bipartisan draft—the “ugly baby” they were at one point co-parenting.

Whereas the 74-page draft is strikingly similar to the “ugly baby,” the 34-page draft—call it “Bill 2.0”—is a more significant update. While the longer draft would increase federal authority to disapprove certain stablecoin issuers—empowering the Federal Reserve Board of Governors (“Fed Board”) to deny required registrations by state-approved stablecoin issuers—Bill 2.0 would open the door to more kinds of stablecoin issuers, permit technological experimentation, and help to clarify longstanding jurisdictional issues.

At a high level, U.S. stablecoin policy should allow for a competitive stablecoin market composed of diverse issuers. Doing so means establishing objective standards for collateral and disclosures and restricting regulatory discretion that can choke off competition and privilege insiders. Bill 2.0 contains important upgrades that could help the U.S. get closer to this goal, and a version 2.1 could help patch its additional bugs.

Ideally, stablecoin legislation should focus on the asset-backed stablecoins (those designed to be fully backed by collateral) that constitute the vast majority of the current market. Bill 2.0 appropriately maintains this focus, eschewing ideas like temporary bans on certain algorithmic stablecoins.

Stablecoin legislation also should enable competition and inclusion by allowing a larger pool of potential market entrants, including networked businesses (like social and e‑commerce platforms) and brands trusted by diverse communities. Bill 2.0 helpfully rejects prohibitions on non-financial businesses being allowed to issue stablecoins.

Last, stablecoin legislation should resolve the regulatory ambiguity and avoid allowing the regulatory discretion that threatens the development of a competitive U.S. stablecoin market. Bill 2.0 takes an important step toward resolving jurisdictional ambiguity in the U.S. by amending securities laws to exempt covered stablecoins from the definition of securities.

But, while moving in the right direction, Bill 2.0 has shortcomings when it comes to restricting regulatory discretion. A version 2.1 could help fix these bugs to ensure, for example, that regulators are not granted broad authority to prohibit stablecoin issuers from entering the market based on vague criteria.

Under Stablecoin Bill 2.0 there are three types of “permitted payment stablecoin issuers”: (1) federally approved insured depository institutions (e.g., banks and credit unions); (2) federally approved nonbank issuers; and (3) state-approved issuers.

With respect to federally qualified bank and nonbank stablecoin issuers, Bill 2.0 would empower federal regulators to deny these issuers’ applications where their activities are found to be “unsafe or unsound” in light of the “risks presented by the applicant and the benefits provided to consumers.” Weighing the risks and benefits to consumers of a stablecoin issuer on safety and soundness grounds creates an overly vague standard by which to reject new market entrants.

Digital asset policy should indeed be risk-based; however, Bill 2.0 already addresses the primary risks of stablecoins—that issuers don’t have the reserve assets they claim to—in an entire section devoted to collateral, disclosure, audit, certification, capital, liquidity, and risk management requirements (“basic operating requirements”). Regulators shouldn’t be granted a trapdoor to deny applicants that otherwise meet those standards.

Moreover, where downside risks (e.g., that a stablecoin will “depeg” due to inadequate collateral) are already addressed, regulators should not be concerned with the benefits of a prospective stablecoin issuer. An applicant should not have to demonstrate its merit before being allowed to operate lawfully, as consumers can decide whether they find a project’s benefits compelling enough to pursue.

That any one pathway to becoming a stablecoin issuer likely will never be perfect is itself an argument for the utility of Bill 2.0’s state approval pathway—which, at a high level, allows each U.S. state and territory to devise its own approval standards for stablecoin issuers, provided the issuers also comply with the abovementioned basic operating requirements. Allowing the laboratories of democracy to experiment with their own standards could help further diversity among stablecoin issuers and thereby promote both competition and financial inclusion.

Nonetheless, although Bill 2.0 makes strides in paring away requirements for state-approved issuers to also jump through federal registration hoops, it leaves open possible federal rulemaking and enforcement channels that go beyond regulations merely implementing basic operating requirements.

One such rulemaking provision is found in a section otherwise devoted to the approval of federally qualified stablecoin issuers. But nothing in the provision itself suggests it can’t be read to allow for rules applying to state-qualified issuers as well, which would then subject such state-qualified issuers to general “rules necessary for the regulation of the issuance of payment stablecoins.” Ideally, the provision should make clear that the rules made under it wouldn’t apply to state-qualified issuers. But, at a minimum, the provision should clarify that these rules also must not go beyond implementing the basic operating requirements, whereas at present the limitation is only that the rules must not be “inconsistent” with such requirements.

As for enforcement, Bill 2.0 also could be read to expand federal authority over state-qualified stablecoin issuers beyond the enforcement of basic operating requirements. Although the enforcement section’s own rulemaking provision appropriately refers to rules and orders regarding basic operating requirements, an additional section on “Enforcement Authority in Exigent Circumstances” grants the Fed Board wide latitude to define those “exigent circumstances” in which the Board may take enforcement actions against state-qualified issuers.

For one, the Fed is not the optimal regulator of stablecoin issuers. Not only is the Fed as a monetary policy specialist not well-suited to regulatory work, as Brookings’s Aaron Klein argues, but also where the Fed perceives private stablecoin issuers as competitors with its own services—such as Federal Reserve deposits or the FedNow system—the Fed faces a conflict of interest. This conflict becomes even greater the more discretion the law affords.

In addition, giving any regulator the power to define its own rules regarding exigent circumstances and take enforcement measures accordingly creates wide leeway to devise new regulatory priorities beyond the basic operating requirements determined by Congress. It also allows the regulator to take discretionary actions against institutions on an ad hoc basis. Such enforcement authority also should be limited to addressing only violations of rules implementing basic operating requirements.

The House Financial Services Committee is distinguishing itself among U.S. government bodies by doing the hard work to thoughtfully address the digital asset ecosystem’s thorny questions. Stablecoin Bill 2.0 is an important step in the right direction, but the Committee could do more to foster a diverse and competitive market by making updates to produce version 2.1.

The United States hit a new record of about 8.3 million immigrants at various stages in its family-sponsored permanent residence process in 2022—an increase of nearly 1 million since 2019. The staggering number of pending cases is primarily the result of outdated caps on green cards, but processing delays are also affecting a substantial number of applicants.

The U.S. immigration system’s current caps came into effect in fiscal year 1992. Figure 1 breaks down the family-based backlog into its two main categories: immediate relatives (“uncapped”) and family preference immigrants (“capped”) from 1992 to 2022. Immediate relatives—spouses, minor children, and parents of adult U.S. citizens—have no direct cap (though their admissions reduce the cap for the family preference (or capped) immigrants from 480,000 to 226,000). The immediate relative backlog has increased from about 73,000 in 1992 to over 1 million in 2022.

Family preference immigrants are spouses and children of legal permanent residents, adult children of U.S. citizens, and siblings of adult U.S. citizens, as well as any spouses and minor children of those relatives. Immigrants who need a cap number available to apply for a green card made up about 86 percent of the family-based backlog in 2022. From 1992 to 2022, the number of capped family-sponsored immigrants stuck in the backlog increased from about 3.3 million to about 7.1 million. The cap is set at 226,000 annually.

These estimates differ significantly from the most commonly referenced source for information on the family‐​sponsored green card backlog: the State Department’s annual immigrant visa waiting list report. The numbers from that report are shown in orange (Petition Approved-Wait Listed (Abroad)), but that report does not include several groups of applicants. It excludes the “immediate relative” or uncapped categories, anyone waiting to apply inside the United States, and—most importantly—anyone whose petition is yet to be adjudicated. As Figure 2 shows, 3.6 million had a sponsor’s petition pending. This massive backlog in pending petitions is largely because of the government’s correct view that it shouldn’t waste resources adjudicating applications that will not result in a green card being issued thanks to the cap.

The overall cap is set at 226,000, but it is divided into 5 categories based on the immigrant’s marital status and relationship to the U.S. sponsor:

1. F‑1—Married adult children of U.S. citizens: 23,400
2. F‑2A—Spouses and minor children of legal permanent residents: ~87,900
3. F‑2B—Unmarried adult children of legal permanent residents: ~26,300
4. F‑3—Unmarried adult children of U.S. citizens: 23,400
5. F‑4—Siblings of U.S. citizens: 65,000

In addition, immigrants from each country have a separate limit. No single birthplace can receive more than 7 percent of the green cards, though 75 percent of the F‑2A category aren’t counted against the cap.

As a result of the country caps and category caps, applicants face wildly different potential wait times: anywhere from 6 years to 233 years (effectively infinite). As seen in Table 1, the odds of a new family-sponsor surviving to be able to act as a sponsor when a green card is available under the cap is low in many category-country combinations. Virtually all new sponsors from Mexico in 2022—outside the F‑2A category—will die before their family member receives a green card. In fact, nearly 40 percent of all new sponsors in 2022 and 58 percent of sponsors in non-F-2A categories will die before their relatives get to immigrate. Even if the sponsor survives for eternity, about 1.6 million immigrants currently in the backlog will die before receiving a green card.

Even the shortest wait for F‑2A category—for spouses and minor children of green card holders—is unconscionable. 6 to 10 years to wait to be with your nuclear family? This would be unimaginable in nearly all developed democracies. The United States stands apart in having some of the most restrictive immigration laws among wealthy countries.

For years, now former President Donald Trump and his key supporters have claimed the FBI’s investigation into his alleged collusion with Russian officials in order to influence the outcome of the 2016 election–internally known at the FBI as CROSSFIRE HURRICANE–was a hoax. Yesterday, Mr. Trump got some validation for his claim.

Late on the afternoon of May 15, Attorney General Merrick Garland released, in nearly unredacted form, the final report of Special Counsel John Durham. Durham’s “investigation of the investigation” was authorized on October 19, 2020, by then-Attorney General William Barr.

Under the mandate he received, Durham was authorized to investigate whether any “federal official, employee, or any other person or entity violated the law in connection with the intelligence, counter-intelligence, or law-enforcement activities directed at the 2016 presidential campaigns, individuals associated with those campaigns, and individuals associated with the administration of President Donald J. Trump, including but not limited to Crossfire Hurricane and the investigation of Special Counsel Robert S. Mueller, III.” (Durham Report, p. 2)

So what did Durham find?

With respect to evidence of collusion between the Trump campaign and Russia, Durham found that before the initial receipt by FBI Headquarters of information from Australia on July 28, 2016, “the government possessed no verified intelligence reflecting that Trump or the Trump campaign was involved in a conspiracy or collaborative relationship with officials of the Russian government…neither U.S. law enforcement nor the Intelligence Community appears to have possessed any actual evidence of collusion in their holdings at the commencement of the Crossfire Hurricane investigation.” (p. 8)

Durham cited two key FBI officials as being responsible for getting the dubious CROSSFIRE HURRICANE investigation started:

“In particular, at the direction of Deputy Director Andrew McCabe, Deputy Assistant Director for Counterintelligence Peter Strzok opened Crossfire Hurricane immediately. Strzok, at a minimum, had pronounced hostile feelings toward Trump. The matter was opened as a full investigation without ever having spoken to the persons who provided the information. Further, the FBI did so without (1) any significant review of its own intelligence databases, (2) collection and examination of any relevant intelligence from other U.S. intelligence entities, (3) interviews of witnesses essential to understand the raw information it had received or (4) using any of the standard analytical tools typically employed by the FBI in evaluating raw intelligence. Had it done so…the FBI would have learned that their own experienced Russia analysts had no information about Trump being involved with Russian leadership officials, nor were others in sensitive positions at the CIA, the NSA, and the Department of State aware of such evidence concerning the subject. In addition, FBI records prepared by Strzok in February and March 2017 show that at the time of the opening of Crossfire Hurricane, the FBI had no information in its holdings indicating that at any time during the campaign anyone in the Trump campaign had been in contact with any Russian intelligence officials.” (p. 9)

For Durham, the evidence of bias in the FBI’s approaches to the Clinton and Trump campaign investigations was clear and unmistakable:

“The speed and manner in which the FBI opened and investigated Crossfire Hurricane during the presidential election season based on raw, unanalyzed, and uncorroborated intelligence also reflected a noticeable departure from how it approached prior matters involving possible attempted foreign election interference plans aimed at the Clinton campaign. As described in Section IV.B, in the eighteen months leading up to the 2016 election, the FBI was required to deal with a number of proposed investigations that had the potential of affecting the election. In each of those instances, the FBI moved with considerable caution. In one such matter… FBI Headquarters and Department officials required defensive briefings to be provided to Clinton and other officials or candidates who appeared to be the targets of foreign interference. In another, the FBI elected to end an investigation after one of its longtime and valuable CHSs went beyond what was authorized and made an improper and possibly illegal financial contribution to the Clinton campaign on behalf of a foreign entity as a precursor to a much larger donation being contemplated.” (pp. 9–10)

And with respect to “…highly significant intelligence it received from a trusted foreign source pointing to a Clinton campaign plan to vilify Trump by tying him to Vladimir Putin so as to divert attention from her own concerns relating to her use of a private email server…”:

“Unlike the FBI’s opening of a full investigation of unknown members of the Trump campaign based on raw, uncorroborated information, in this separate matter involving a purported Clinton campaign plan, the FBI never opened any type of inquiry, issued any taskings, employed any analytical personnel, or produced any analytical products in connection with the information. This lack of action was despite the fact that the significance of the Clinton plan intelligence was such as to have prompted the Director of the CIA to brief the President, Vice President, Attorney General, Director of the FBI, and other senior government officials about its content within days of its receipt. It was also of enough importance for the CIA to send a formal written referral memorandum to Director Comey and the Deputy Assistant Director of the FBI’s Counterintelligence Division, Peter Strzok, for their consideration and action.” (p. 10)

Regarding the sensational dossier of alleged Trump misconduct and ties to Russian officials, supplied to the U.S. government by former U.K. intelligence officer Christopher Steele, Durham found no corroboration for any of Steele’s claims:

“Our investigation determined that the Crossfire Hurricane investigators did not and could not corroborate any of the substantive allegations contained in the Steele reporting. Nor was Steele able to produce corroboration for any of the reported allegations, even after being offered $1 million or more by the FBI for such corroboration.” (p. 11)

Durham’s critics will no doubt point out that of the three actual criminal cases he brought against key figures in this case, he secured a plea bargain in only one–that of FBI attorney Kevin Clinesmith, who pled guilty to altering a document submitted to the Foreign Intelligence Surveillance Court (FISC) in connection with a FISA application on Trump associate Carter Page. Clinesmith got 12-months’ probation (p. 232).

But on this, the critics miss a key point: The other two defendants–Russian national and Steele sub-source Igor Danchenko and Perkins Coie attorney and Clinton campaign opposition researcher Michael Sussmann–were acquitted during jury trials on charges of making false statements to investigators. Those were not defeats for Durham, they were vindications of the American jury trial system, a system in which prosecutors are supposed to be forced to prove the guilt of the accused beyond a reasonable doubt. They represent a rare but welcome departure from the usual practice by DoJ prosecutors: coercive plea bargains.

So what are the key takeaways from the Durham Report?

The best-case interpretation is that a handful of clearly anti-Trump FBI agents and lawyers, suffering from a severe case of confirmation bias, managed to open and steer a totally unfounded counterintelligence investigation against an American presidential candidate and his campaign. The worst-case interpretation is that the senior most FBI leadership was at least tacitly okay with that approach, while proceeding far more cautiously and carefully with an investigation into his chief political opponent.

The flagrantly disparate treatment of the Trump and Clinton investigations from legal, policy, and procedural standpoints is further evidence of the bias.

Durham’s reform proposals don’t begin to get at the core problem his own investigation uncovered. Durham suggests that “to provide additional scrutiny of politically sensitive investigations would be to identify, in advance, an official who is responsible for challenging the steps taken in the investigation. [Former NSA General Counsel] Stewart Baker proposes having a ‘career position for a nonpartisan FBI agent or lawyer to challenge the FISA application and every other stage of the investigation.’ ”(p. 306)

In fact, this is exactly the role federal courts are supposed to play: providing a real check and challenge to Executive branch prosecutors and the evidence they bring seeking warrants to investigate or indictments to charge people. The failure here is with the FISC and its proclivity–like nearly all federal courts–to show a ludicrous level of deference to executive branch claims brought before them. They key reform here is for the Senate to stop confirming so many executive branch advocates to the federal bench.

Finally, the fallout from this will not just be political, but potentially legal as well. The existing federal investigations into Trump’s culpability for the January 6, 2021, Capitol riot, as well as his alleged theft of hundreds of classified documents upon leaving office, will be viewed by his supporters and perhaps other Americans as nothing more than the continuation of the FBI’s vendetta against Trump–no matter how compelling and well-grounded any evidence against him may be.

That House and Senate overseers of the FBI have for decades ignored complaints from civil society organizations about FBI surveillance and investigative overreach is a key reason why we face this new crisis.

Thanks to lower childbirth rates among the U.S. population, fewer workers are starting their careers each year than during the period following World War II. This phenomenon has made immigration much more important in counteracting workforce decline in the United States. In fact, from 1995 to 2022, immigrants and their children accounted for 70 percent of all civilian labor force growth.

From 1995 to 2022, the U.S. labor force increased from nearly 131.6 million workers to over 164.3 million—an increase of nearly 32.8 million workers: 16.1 million of that increase came from immigrant workers (49 percent) and 6.7 million were children of immigrants (21 percent), according to data from the Current Population Survey’s Annual Social and Economic Supplement. Just 9.9 million were U.S.-born citizens without a foreign-born parent. The actual effect of cutting off all immigration would have been even greater since the working immigrant population would have declined without more immigration by about 4.5 million.

Immigrants have increased from about 10 percent of the U.S. labor force in 1995 to 18 percent in 2022, and immigrants and their children have gone from 18 percent to 29 percent. The total population of immigrant workers or workers with immigrant parents increased from about 23 million to nearly 46 million, making this population a massive contributor to U.S. economic growth.

Despite the increased importance of immigration, however, the U.S. labor force growth has declined. It is just not true that immigration has meant that U.S. workers are facing more competition from new workers. In fact, immigrants are only partially offsetting the significant decline in new U.S. workers entering the workforce. The labor force growth rate fell from 1.7 percent in the 1960s to 0.6 percent in the 2010s—a decline of more than 60 percent.

Of course, some commentators respond that overall labor force growth is not as important as the labor force growth rate for non-college educated workers who are more likely to be competing with immigrants. But the rate of growth for non-college educated workers is both lower and declines faster over the entire period from 1960 to 2022 than the rate of growth for all workers. Immigrants are even more important in filling these low-skilled jobs precisely because U.S. workers are entering them at the lowest rates ever. In fact, college-educated workers have accounted for 95 percent of labor force growth from 1992 to 2022.

The Bureau of Labor Statistics predicts that about 70 percent of jobs in 2031 will not require a college degree, and that most job growth from 2021 to 2031 will come from these lower-skilled positions. Right now, there are about 9 million job openings, and the U.S. government should stop interfering into the labor market to create shortages. The United States needs workers now more than ever.

Given the steep population decline Puerto Rico has experienced, policymakers should reconsider whether remaining residents can continue to support 78 separate municipios. Consolidating some of these governments could result in more efficient service provision and reduced administrative overhead.

Puerto Rico’s population has declined 15% since the 2000 Census, but the rate of population change has varied widely across municipios. Seven municipios registered population increases between 2000 and 2021, while twenty suffered declines of 20% or more.

Smaller municipios that have experienced proportionally large population declines are especially prone to service insolvency, a condition under which the government continues to pay its bills but lacks the ability to provide public services at the level residents might reasonably expect.

The municipio that suffered the largest population decline since 2000 is Guánica—on the island’s southern coast, 45km west of the city of Ponce. Its 2022 population of 12,800 is down 41.5% since the century began. Aside from the challenges faced by other southern coastal communities hard hit by hurricanes and earthquakes in recent years, Guánica is also struggling with chemical contamination in and around its bay.

The municipal government appears to lack the capacity to provide adequate public services under these difficult conditions. According to its latest available federal Single Audit, 65% of Guánica’s spending was devoted to general administration, dwarfing the amounts spent on public safety, public works, and health and welfare, which together accounted for only 10% of total spending.

The Single Audit for the fiscal year ended June 30, 2020, shows that Guánica is heavily indebted and in fiscal distress. Long-term liabilities amounted to over $1100 per resident, and the muncipio’s general fund has a negative balance. Guánica’s balance sheet is likely worse than reported because damage to Guánica ‘s capital assets from hurricanes and earthquakes had not been assessed. This issue caused Guánica’s auditor to issue a “adverse” opinion, meaning that its financial statements cannot be relied upon to determine the municipio’s true financial condition. The fact that Guánica’s fiscal year 2021 financial statements are not yet available is another indication of its financial challenges.

With all that in mind, it is worth noting that Guánica and other struggling municipios may show better financial results in fiscal year 2022 due to the American Rescue Plan Act, which provided $1.5 billion in aid to Puerto Rico’s local governments. But that is a one-time windfall that cannot resolve long-term financial issues.

Although Puerto Rico’s Financial Oversight and Management Board (FOMB) has noted issues with municipio performance, it has stopped short of advocating consolidation. In a recent essay, FOMB Research Director Arnaldo Cruz identified a variety of problems afflicting municipal governments, including failure to meet budgetary revenue targets, borrowing to cover operational expenses, inability to complete capital projects, and procurement irregularities.

Cruz recommended regionalizing individual government services. For example, several municipios could participate in one regional authority that would provide public works services. These regional service providers would be similar to the Joint Powers Authorities that operate in California and some other states.

Although regional service providers could reduce municipal expenditures through economies of scale, they would not address the administrative bureaucracy that manages each municipio. It is only through full consolidation that redundant mayors, municipal legislatures, and support staff can be addressed.

Another challenge to regionalization of the kind recommended by the Oversight Board is lack of take-up. In 2020, the Oversight Board announced a Municipal Consolidation Fund for the purpose of providing one-time grants to municipios that voluntarily participate in service consolidations. But, according to a recent Commonwealth fiscal plan, the Oversight Board’s Municipal Consolidation Fund had yet to make any grants as of April 2023, despite the Board earmarking $22 million annually for this fund.

From a political standpoint, combining municipio governments is undoubtedly a heavy lift. Mayors, municipal legislators, staff, and suppliers all have an interest in protecting existing bureaucracies and know how to affect the policy debate. Regular Puerto Rico citizens and federal taxpayers who bear the costs of duplicative government structures, individually, pay too little for this inefficiency to be a salient issue. If Puerto Rico is to gain the benefits of municipal consolidation, good government advocates will have to push the idea forward.

Late last year, the Nigerian government caused a cash shortage for the country’s 200 million citizens that led to protests, riots, and unrest. Since then, the Central Bank of Nigeria proudly announced that the adoption of the eNaira—Nigeria’s central bank digital currency (CBDC)—has increased twelvefold from 0.5 percent to 6 percent of the population.

Godwin Emefiele, the governor of the Central Bank of Nigeria, said, “The eNaira has emerged as the electronic payment channel of choice for financial inclusion and executing social interventions.”

Whether an adoption rate of 6 percent is a success can be debated, but there should be no misunderstanding that the eNaira was not adopted by choice. At best, it gained adoption due to desperation in the wake of the cash shortage that the government created.

Governor Emefiele has been clear that, “The destination, as far as I am concerned, is to achieve a 100% cashless economy in Nigeria.” But make no mistake, while a cashless economy may be the choice that the Nigerian government has made, it is not a choice that Nigerian citizens have been free to make.