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Subsidiarity and the European Union

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Author Info
Robert P. Inman
Daniel L. Rubinfeld
Abstract

The European Union is at a crossroads. At issue will be each of the three decisions which define a federal constitution: the number of participating governments, the assignment of policy responsibilities to the new EMU, and the representation of local interests in, and the decision-making rules for, the Union. Subsidiarity is to be the guiding principle. This essay reviews three alternative models of subsidiarity -- decentralized federalism, centralized federalism, and democratic federalism -- and argues the current European Economic Community has evolved from decentralized to centralized to a fully democratic federalist state. The structure of EMU governance is in place and it closely resembles that of the United States: an institutionally weak executive, a country-specific Council of Ministers and a locally representative Parliament. The remaining issues to be decided are the number of participating members and the assignment of policy responsibilities to levels of government. A large Union with significant fiscal policy responsibilities is likely to replicate U.S. economic policy performance.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6556.

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Date of creation: May 1998
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Handle: RePEc:nbr:nberwo:6556

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H1 - Public Economics - - Structure and Scope of Government
H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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  1. Eichengreen, Barry, 1993. "European Monetary Unification," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1321-57, September. [Downloadable!] (restricted)
  2. Sen, Amartya, 1988. "Freedom of choice : Concept and content," European Economic Review, Elsevier, vol. 32(2-3), pages 269-294, March. [Downloadable!] (restricted)
  3. Coate, Stephen & Morris, Stephen, 1995. "On the Form of Transfers in Special Interests," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1210-35, December. [Downloadable!] (restricted)
  4. Bednar, Jenna & Ferejohn, John & Garrett, Geoffrey, 1996. "The politics of European federalism," International Review of Law and Economics, Elsevier, vol. 16(3), pages 279-294, September. [Downloadable!] (restricted)
  5. Crawford, Vincent P, 1982. "A Theory of Disagreement in Bargaining," Econometrica, Econometric Society, vol. 50(3), pages 607-37, May. [Downloadable!] (restricted)
  6. Laffont, Jean-Jacques, 1987. "Incentives and the allocation of public goods," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 2, chapter 10, pages 537-569 Elsevier. [Downloadable!] (restricted)
  7. Tamim Bayoumi and Barry Eichengreen., 1992. "Shocking Aspects of European Monetary Unification," Economics Working Papers 92-187, University of California at Berkeley. [Downloadable!]
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  8. Besley, Timothy & Coate, Stephen, 1997. "An Economic Model of Representative Democracy," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 85-114, February.
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  9. Inman, Robert P. & Rubinfeld, Daniel L., 1994. "The EMU and fiscal policy in the new European Community: An issue for economic federalism," International Review of Law and Economics, Elsevier, vol. 14(2), pages 147-161, June. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Molero, Juan Carlos, 2001. "Analysis Of The Decentralization Of Public Spending In Spain," MPRA Paper 8056, University Library of Munich, Germany. [Downloadable!]
  2. Alberto Alesina & Ignazio Angeloni & Federico Etro, 2001. "Institutional Rules for Federations," NBER Working Papers 8646, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Floriana Cerniglia & Laura Pagani, 2007. "The European Union and the Member States: Which Level of Government Should Do what? An Empirical Analysis of Europeans’ Preferences," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  4. Massimo Bordignon & Sandro Brusco, 2003. "On Enhanced Cooperation," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  5. W.H. Buiter, 1999. "Alice in Euroland," CEP Discussion Papers dp0423, Centre for Economic Performance, LSE. [Downloadable!]
  6. McCahery, J.A. & Vermeulen, E.P.M., 2005. "Does the European company prevent the "Delaware-effect"?," Discussion Paper 10, Tilburg University, Tilburg Law and Economic Center. [Downloadable!]
  7. SALMON, Pierre, 2002. "Accounting for centralisation in the European Union : Niskanen, Monnet or Thatcher?," LATEC - Document de travail - Economie (1991-2003) 2002-05, LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS UMR 5118, Université de Bourgogne. [Downloadable!]
  8. Floriana Cerniglia & Laura Pagani, 2007. "The allocation of competences between the European Union and the Member States: an analysis of the determinants of Europeans’ preferences," Working Papers 118, University of Milano-Bicocca, Department of Economics, revised 2007. [Downloadable!]
  9. McCahery, J.A. & Vermeulen, E.P.M., 2004. "The changing landscape of EU company law," Discussion Paper 23, Tilburg University, Tilburg Law and Economic Center. [Downloadable!]
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