Cooperative federalism is key to counterterror.

To sketch a more complete picture and offer lessons to guide institutional development into the future, Part III builds on the leading accounts by analyzing vertical intergovernmental relations regarding national security intelligence in some familiar federalism terms, including the ways allocation of government responsibility affects accountability and the economics of national security as a form of regulation. Examining accountability mechanisms in the national security context highlights the risk that state and local participation in federal programs will undermine the public's ability to influence government policy at those levels. However, this Part suggests ways that any such deficit should be offset by improvements in other types of accountability-reasoned decisionmaking and compliance oversight-by structuring cooperation to bolster joint federal-local policymaking and by creating a mix of centralized and localized monitoring. Examination of national security intelligence in terms of regulation economics helps distinguish which national security intelligence policies (such as information sharing) are probably best dictated at the federal level, because uniformity is important or because states and localities might otherwise externalize too many costs, and which policies (such as information gathering) are probably best set or heavily influenced at more local levels, because of the need to tailor intelligence policy to local contexts and to learn from processes of innovation and adaptation.