IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_103.html
   My bibliography  Save this paper

The Subsidiarity Principle and Market Failure in Systems Competition

Author

Listed:
  • Hans-Werner Sinn

Abstract

Contrary to a frequent contention, systems competition cannot work when governments respect the Subsidiarity Principle. The principle implies that governments step in where markets fail. Reintroducing markets through the backdoor of systems competition will again result in market failure. Three models are presented which illustrate this wisdom. The first is concerned with congestion-prone public goods and shows that fiscal competition may be ruinous for the governments. The second considers the insurance function of redistributive taxation and shows that systems competition may suffer from adverse selection. The third studies the role of quality regulation and shows that systems competition may be a competition of laxity resulting in inefficiently low quality standards.

Suggested Citation

  • Hans-Werner Sinn, 1996. "The Subsidiarity Principle and Market Failure in Systems Competition," CESifo Working Paper Series 103, CESifo.
    • Handle: RePEc:ces:ceswps:_103
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/ces_wp103.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fehn, Rainer, 2001. "Institutioneller Wettbewerb und soziale Sicherungssysteme in Europa," Discussion Paper Series 45, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    2. Knut Blind, 2002. "Driving forces for standardization at standardization development organizations," Applied Economics, Taylor & Francis Journals, vol. 34(16), pages 1985-1998.
    3. Bruno Coquet & Jacques Le Cacheux, 1996. "Les privatisations dans la perspective de l'intégration européenne," Revue Économique, Programme National Persée, vol. 47(6), pages 1333-1350.
    4. Gerken Lüder, 1999. "Ursprungslandprinzip, Wettbewerb der Staaten und Freiheit," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 50(1), pages 405-430, January.
    5. Genschel, Philipp, 1998. "Markt und Staat in Europa," MPIfG Working Paper 98/1, Max Planck Institute for the Study of Societies.
    6. Barbara Dluhosch, 1997. "Convergence of Income Distributions: Another Measurement Problem," Constitutional Political Economy, Springer, vol. 8(4), pages 337-352, December.
    7. Scharpf, Fritz W., 1997. "Balancing positive and negative integration: The regulatory options for Europe," MPIfG Working Paper 97/8, Max Planck Institute for the Study of Societies.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_103. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.