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Market mechanisms for policy decisions: Tools for the European Union

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  • Casella, Alessandra

Abstract

The thesis of this paper is that more transparent, rule-bound and subtle mechanisms for policy coordination will be needed to ensure the success of an enlarged European Union. A common policy is a public good with distributional implications. Economists have developed a large number of plausible market mechanisms for the efficient provision of public goods, and the European Union, with its limited number of members and relative ease of information is a promising ground for such schemes. An important open area of applied research is thus the tailoring of incentive schemes to the specific needs of the European Union and its policy choices. The paper discusses two possible examples: a system of tradable deficit permits to implement the fiscal constraints imposed by the Maastricht treaty; and a rule allowing country representatives to shift their own votes intertemporally when deliberations are taken by vote in periodic committee meetings.
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  • Casella, Alessandra, 2001. "Market mechanisms for policy decisions: Tools for the European Union," European Economic Review, Elsevier, vol. 45(4-6), pages 995-1006, May.
    • Handle: RePEc:eee:eecrev:v:45:y:2001:i:4-6:p:995-1006
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    1. Alessandra Casella, 1999. "Tradable deficit permits: efficient implementation of the Stability Pact in the European Monetary Union," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 14(29), pages 322-361.
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    Cited by:

    1. Marie-Laure Breuillé, 2007. "Tradable deficit permits: a way to ensure sub-national fiscal discipline?," Working Papers hal-04139221, HAL.
    2. Hefeker, Carsten, 2023. "Policy competition, imitation and coordination under uncertainty," Economic Systems, Elsevier, vol. 47(1).
    3. Kjell Hausken & John F. Knutsen, 2002. "The Birth, Adjustment and Death of States," Public Economics 0205004, University Library of Munich, Germany.
    4. Hefeker Carsten, 2019. "Helping with the Homework: Support Mechanisms for Uncertain Reforms in a Monetary Union," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(5-6), pages 983-1004, October.
    5. Hausken, Kjell & Knutsen, John F., 2010. "An enabling mechanism for the creation, adjustment, and dissolution of states and governmental units," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 4, pages 1-38.
    6. Hefeker, Carsten & Neugart, Michael, 2018. "Non-cooperative and cooperative policy reforms under uncertainty and spillovers," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 94-102.
    7. Amy K. Filipek & Till Schreiber, 2010. "The Stability and Growth Pact: Past Performance and Future Reforms," Working Papers 97, Economics Department, William & Mary.
    8. Lossani, Marco & Natale, Piergiovanna & Tirelli, Patrizio, 2001. "A Reform Proposal for EMU Institutions," MPRA Paper 18694, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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