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A new concept of European federalism


  • Frey, Bruno S.


By opening markets the European union has been also an economic success. However, with respect to political organization the European Union is far less accomplished. The misguided concept of a successful Europe consists in mistaking integration for harmonization and homogenization. But the essence of Europe is its diversity. No steps have been taken to actively institutionalize competition between governmental units at all levels. The welfare of European citizens could be improved by promoting competition between new jurisdictions. A new type of federalism based on Functional, Overlapping Competing Jurisdictions FOCJ is here proposed. FOCJ form a federal system of governments emerging from below as a response to citizens' preferences. The lowest political units (communes) must be given the freedom to engage in forming FOCJ and must have the right to levy taxes to finance the public services they provide.
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Suggested Citation

  • Frey, Bruno S., 2009. "A new concept of European federalism," LSE Research Online Documents on Economics 53366, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:53366

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    References listed on IDEAS

    1. Schneider Friedrich, 1992. "The Federal And Fiscal Structures Of Representative And Direct Democracies As Models For A European Federal Union: Some Ideas Using The Public-Choice Approach," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 3(4), pages 1-36, December.
    2. Vaubel, Roland, 1994. "The Political Economy of Centralization and the European Community," Public Choice, Springer, vol. 81(1-2), pages 151-190, October.
    3. Mueller,Dennis C. (ed.), 1997. "Perspectives on Public Choice," Cambridge Books, Cambridge University Press, number 9780521553773, May.
    4. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135-135.
    5. Stephen Mehay, 1984. "The effect of governmental structure on special district expenditures," Public Choice, Springer, vol. 44(2), pages 339-348, January.
    6. Frey, Bruno S, 1994. "Direct Democracy: Politico-economic Lessons from Swiss Experience," American Economic Review, American Economic Association, vol. 84(2), pages 338-342, May.
    7. Bird, Richard M., 1993. "Threading the Fiscal Labyrinth: Some Issues in Fiscal Decentralization," National Tax Journal, National Tax Association, vol. 46(2), pages 207-27, June.
    8. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    9. Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1776.
    10. Ashworth, John & Heyndels, Bruno & Smolders, Carine, 2002. "Redistribution as a Local Public Good: An Empirical Test for Flemish Municipalities," Kyklos, Wiley Blackwell, vol. 55(1), pages 27-56.
    11. Mueller,Dennis C. (ed.), 1997. "Perspectives on Public Choice," Cambridge Books, Cambridge University Press, number 9780521556545, May.
    12. Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
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    More about this item


    federalism; constitutional economics; public choice; monopoly on territory;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H4 - Public Economics - - Publicly Provided Goods
    • H5 - Public Economics - - National Government Expenditures and Related Policies


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