Policies in the public sector are shaped by the political philosophy associated with governments and the surrounding social and cultural contexts of the settings in which those governments exist. The process and products of policymaking in the United States are therefore influenced by its federalist form of democratic government and the guiding principles, traditions, and cultural values of American society. Federalism is a type of government in which a constitution distributes powers between a central government and subdivisional governments. The key is that both levels of government receive their powers from the Constitution. Both have substantial powers and responsibilities, including the ability to collect taxes and pass laws regulating the conduct of individuals. State and local governments are also policy institutions within the federalist system. They implement federal domestic programs, which typically leave many aspects to the discretion of state and local policymakers (Van Horn et al., 1992). They also create policy of their own.