Do-It-Yourself biology, 3D printing, and the sharing economy are equipping ordinary people with new powers to shape their biological, physical, and social environments. This phenomenon of distributed innovation is yielding new goods and services, greater economic productivity, and new opportunities for fulfillment. Distributed innovation also brings new environmental, health, and security risks that demand oversight, yet conventional government regulation may be poorly suited to address these risks.

Cities often test the existing limits of their regulatory authority in areas like environmental protection, labor and employment, and immigration. The last few years witnessed an explosion of preemptive state legislation attacking, challenging, and overriding municipal ordinances across a wide range of policy areas. But this hostility to city government is not new. In 1915, one professor observed that “the relations of states to metropolitan cities in this country is ‘a history of repeated injuries’ .  .  .