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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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Cited by:
(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. Stefanie Schmid-Lübbert & Hans-Bernd Schaefer, . "The Constitution of the European Union," German Working Papers in Law and Economics 2002-1-1030, Berkeley Electronic Press. [Downloadable!]
  2. Molero, Juan Carlos, 2001. "Analysis Of The Decentralization Of Public Spending In Spain," MPRA Paper 8056, University Library of Munich, Germany. [Downloadable!]
  3. 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:
  4. 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!]
  5. Massimo Bordignon & Sandro Brusco, 2003. "On Enhanced Cooperation," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  6. W.H. Buiter, 1999. "Alice in Euroland," CEP Discussion Papers dp0423, Centre for Economic Performance, LSE. [Downloadable!]
  7. 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!]
  8. 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!]
  9. 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!]
  10. 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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