That works if and only if the best individual choice is also the best group choice. This isn't always true, see the Prisoners' Dilemma.
For example, perhaps society benefits when you tax the wealthy to help the poor. But given the choice, the wealthy will move to where their taxes are lower, so that plan works poorly if you let individual states pick and choose.
Or perhaps society benefits when you don't tax the wealthy to help the poor, and make the poor pull themselves up by their bootstraps. But the poor will move to a state with more aid, again defeating the plan.
Obviously there are differences between the states right now, so this isn't a total obstacle. But it really only works to the extent that there is a lack of mobility between the states (people tend to want to stay where they are), or on issues where it doesn't matter.
For example, perhaps society benefits when you tax the wealthy to help the poor. But given the choice, the wealthy will move to where their taxes are lower, so that plan works poorly if you let individual states pick and choose.
Or perhaps society benefits when you don't tax the wealthy to help the poor, and make the poor pull themselves up by their bootstraps. But the poor will move to a state with more aid, again defeating the plan.
Obviously there are differences between the states right now, so this isn't a total obstacle. But it really only works to the extent that there is a lack of mobility between the states (people tend to want to stay where they are), or on issues where it doesn't matter.