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Subsidiarity and the European Union

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  • Robert P. Inman
  • Daniel L. Rubinfeld
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    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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    Bibliographic Info

    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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    5. Inman, Robert P & Fitts, Michael A, 1990. "Political Institutions and Fiscal Policy: Evidence from the U.S. Historical Record," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 6(0), pages 79-132.
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    12. 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, Elsevier, vol. 14(2), pages 147-161, June.
    13. Coate, Stephen & Morris, Stephen, 1995. "On the Form of Transfers in Special Interests," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 103(6), pages 1210-35, December.
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    Cited by:
    1. Berthold, Norbert & Fricke, Holger, 2009. "Die Bundesländer im Standortwettbewerb," Wirtschaftswissenschaftliche Beiträge, Julius-Maximilians-Universität Würzburg, Lehrstuhl für Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik 106, Julius-Maximilians-Universität Würzburg, Lehrstuhl für Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik.
    2. Lossani Marco & Natale Piergiovanna & Tirelli Patrizio, 1999. "Disegno delle istituzioni e stabilità finanziaria nell'Unione Monetaria Europea," Economia politica, Società editrice il Mulino, Società editrice il Mulino, issue 2, pages 243-270.
    3. 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, University of Milano-Bicocca, Department of Economics 118, University of Milano-Bicocca, Department of Economics, revised 2007.
    4. SALMON, Pierre, 2002. "Accounting for centralisation in the European Union : Niskanen, Monnet or Thatcher?," LATEC - Document de travail - Economie (1991-2003), LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS UMR 5118, Université de Bourgogne 2002-05, LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS UMR 5118, Université de Bourgogne.
    5. Molero, Juan Carlos, 2001. "Analysis Of The Decentralization Of Public Spending In Spain," MPRA Paper 8056, University Library of Munich, Germany.
    6. Alberto Alesina & Ignazio Angeloni & Federico Etro, 2001. "Institutional Rules for Federations," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1940, Harvard - Institute of Economic Research.
    7. 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 2067, CESifo Group Munich.
    8. W.H. Buiter, 1999. "Alice in Euroland," CEP Discussion Papers, Centre for Economic Performance, LSE dp0423, Centre for Economic Performance, LSE.
    9. Bordignon, Massimo & Brusco, Sandro, 2006. "On enhanced cooperation," Journal of Public Economics, Elsevier, Elsevier, vol. 90(10-11), pages 2063-2090, November.
    10. Maria Balaguer-Coll & Diego Prior & Emili Tortosa-Ausina, 2010. "Decentralization and efficiency of local government," The Annals of Regional Science, Springer, Springer, vol. 45(3), pages 571-601, December.
    11. Rezessy, Silvia & Dimitrov, Konstantin & Urge-Vorsatz, Diana & Baruch, Seth, 2006. "Municipalities and energy efficiency in countries in transition: Review of factors that determine municipal involvement in the markets for energy services and energy efficient equipment, or how to aug," Energy Policy, Elsevier, Elsevier, vol. 34(2), pages 223-237, January.

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