This piece was adapted from a longer article in National Affairs.

Support for decentralized authority and an active civil society are embedded in conservative orthodoxy, but they play too small a role in conservative governing. Despite rhetorical nods to the value of federalism, localism, and non-governmental bodies, leaders on the right haven’t done nearly enough to energize communities or arrest the upward trajectory of power and money. As a result, we have too many frustrated individuals deprived of agency and too many struggling communities feeling incapable of changing their lots while power and wealth concentrate in hands far, far away.

Conservatives need a small-government agenda that consists of more than the promise to roll back federal initiatives and regulations, coupled with the hope that local authorities will step up. Instead, we need to actively rebuild the local “mediating institutions” of civic life. Bringing this energetic, productive form of decentralization to life will entail combining lessons from two extraordinary resources: the scholarship of Nobel laureate Friedrich Hayek and the concept of subsidiarity. Though the former emanates from the classical and Austrian schools of economics and the latter from a branch of communitarian Catholic social thought, both speak to the distribution of authority. Their complementarity is unexpected but illuminating.

Hayek opposed state coercion, but he didn’t consider freedom to be either a natural or a designed condition. Instead, he believed that liberty evolved, its advantages were recognized, and, over time, efforts were taken to perfect and expand it. According to Hayek, liberty’s worth is further validated by the social formations it begets. As he wrote in The Constitution of Liberty, “the value of freedom consists mainly in the opportunity it provides for the growth of the undesigned,” such as associations, institutions, customs, and habits.

In the Catholic social teachings that undergird subsidiarity, freedom is endowed. The Catechism notes that human rights are prior to society, that God has great regard for freedom, and that governments must respect the rights of individuals. Rights are certainly understood as ends in themselves, but liberty is also understood as a means of advancing self-determination and collective action. The Catechism notes that God created man with free will, conferred on man the dignity to initiate and control his own actions, and continuously wills that man should be left to his own counsel. Liberty is viewed as a way for individuals to control their own fates.

Of course, there are better and worse ways to exert such control, and the teachings of both Hayek and subsidiarity discuss how best to arrange society for the benefit of the individual. In a 1961 encyclical that discusses the distribution of authority among the state and “the numerous intermediary bodies and corporate enterprises,” Pope John XXIII notes that they must all treat “individual members as human persons and encourage them to take an active part in the ordering of their lives.” Similarly, Hayek emphasizes that human knowledge and initiative must be recognized and elevated so that individuals are able to plan for themselves. The British civil-society scholar David Green brings these concepts together succinctly, writing that a limited government’s purpose is not to manage people but to enable individuals to voluntarily associate as a means of managing themselves.

In other words, preserving human initiative provides a basis for enabling the supports individuals need and for limiting overbearing government activity. A corollary is that when a social formation falls short, too little external aid means it could remain stalled; but too much aid will deplete its enterprise, steal its functions, and ultimately enfeeble it.

Two quintessentially Midwestern Republican presidents showed how this balance between assistance and initiative can be offered up as folksy wisdom. In his 1955 State of the Union address, President Dwight Eisenhower argued that the aspirations of most Americans “can best be fulfilled through their own enterprise and initiative, without government interference,” and that “the government can fully meet its obligation without creating a dependent population or a domineering bureaucracy.” To Eisenhower, this could be accomplished through two related principles: The federal government should perform “an essential task only when it cannot otherwise be adequately performed,” and, in doing so, it “must not impair the self-respect, freedom and incentive of the individual.” Abraham Lincoln wrote that governments should not interfere when people are able to act for themselves, but that governments should act for a “community of people” who cannot attain what they need through “their separate, and individual capacities.”

In short, policymakers should acknowledge the occasional weaknesses of formations but should curtail far-reaching, permanent interventions that would abridge their rights, subsume their responsibilities, or blunt their initiative. By providing limited aid to declining formations and fostering new ones, the state can create environments that promote social entrepreneurship.

Hayekian subsidiarity asks higher-level bodies to develop interventions specifically tailored for particular shortcomings. If a community’s civil sector is mostly healthy but needs a boost, for example, aid to local nonprofits might be in order. But if there are too few helpful nonprofits, either because nonprofits in a particular area are scarce or simply ineffective, direct aid to individuals might foster the necessary improvements.

Some promising strategies for putting this framework into practice include open-ended, short-term, competitive grants. The federal government can make small grants available to local bodies that propose to address a problem. Such grants should have minimal requirements so as not to discount local knowledge, initiative, and priorities. The federal charter-school program is a good example. This 25-year-old program simultaneously recognizes that families deserve K-12 options and that Washington’s role in providing them should be small. So competitive grants were made available to states, which then distributed grants to nonprofits starting new public schools. Eligibility requirements are light, and the grants last only a few years. The program has fostered a wealth of community-based organizations that develop and operate a constellation of “choice” schools.

A similar approach has been employed in the federal Promise Neighborhoods program, which provides assistance to local organizations that offer education and community services, as well as in the Investing in Innovation Fund, which grants aid to groups researching new education initiatives or expanding successful programs. The federal Race to the Top program, however, demonstrated how this approach can be distorted: Washington offered massive awards to states willing to adopt a laundry list of requirements from Uncle Sam, and rather than catalyzing civil-sector activity and locally crafted solutions, it forced its own policies on the states.

The federal government can also employ a range of tax-policy strategies to support local formations. The New Markets Tax Credit program, for example, offers tax relief in exchange for private investments in distressed communities. Rather than creating a new Washington bureaucracy, the program encourages individuals and businesses to support local “Community Development Entities” by providing tax credits and financial support to businesses in needy areas.

The Opportunity Zone program, created through the 2017 tax-reform law, calls on states to identify the most economically disadvantaged areas in their states. Individuals can invest unrealized capital gains in these locations, earning tax relief while supporting economic development. “Social impact bonds” can also enable investors interested in improving social welfare to make loans to service providers working on local problems. If a project succeeds, the investors are repaid by the government. In each of these instances, higher-level bodies energize others to diagnose problems, craft solutions, and invest in a variety of approaches.

Conservative leaders who embrace this view should be comfortable even with formations that adopt initiatives they may not like. By recognizing our own limitations and the authority of others, we can see that the American unum requires a pluribus.