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The new systems competition

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  • Sinn, Hans-Werner

Abstract

While the old systems competition took place within closed borders, globalisation has brought about a new type of systems competition that is driven by the mobility of factors of production. The new systems competition will likely imply the erosion of the European welfare state, induce a race to the bottom in the sense that capital will not even pay for the infrastructure it uses and erode national regulatory systems. In general, it will suffer from the same type of market failure which induced the respective government activity in the first place. The new systems competition will force inefficient governments to seek national efficiency, but national efficiency does not imply that systems competition will itself be efficient.

Suggested Citation

  • Sinn, Hans-Werner, 2004. "The new systems competition," Munich Reprints in Economics 19608, University of Munich, Department of Economics.
  • Handle: RePEc:lmu:muenar:19608
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    References listed on IDEAS

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    1. Sinn, Hans-Werner, 1980. "Ökonomische Entscheidungen bei Ungewißheit," Monograph, Mohr Siebeck, Tübingen, edition 1, number urn:isbn:9783169427024.
    2. Sinn, Hans-Werner, 1997. "The selection principle and market failure in systems competition," Journal of Public Economics, Elsevier, vol. 66(2), pages 247-274, November.
    3. Rosanne Altshuler & Harry Grubert & T. Scott Newlon, 2000. "Has U.S. Investment Abroad Become More Sensitive to Tax Rates?," NBER Chapters, in: International Taxation and Multinational Activity, pages 9-38, National Bureau of Economic Research, Inc.
    4. Hans–Werner Sinn, 2002. "Der neue Systemwettbewerb," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 3(4), pages 391-407, November.
    5. Richter, Wolfram F., 1994. "The efficient allocation of local public factors in Tiebout's tradition," Regional Science and Urban Economics, Elsevier, vol. 24(3), pages 323-340, June.
    6. Hans-Werner Sinn, 2001. "Risk Taking, Limited Liability and the Competition of Bank Regulators," CESifo Working Paper Series 603, CESifo.
    7. Hans-Werner Sinn & Gebhard Flaig & Martin Werding & Sonja Munz & Nicola Düll & Herbert Hofmann, 2001. "EU-Erweiterung und Arbeitskräftemigration : Wege zu einer schrittweisen Annäherung der Arbeitsmärkte," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 2, November.
    8. Hans-Werner Sinn, 2002. "Risktaking, Limited Liability, and the Competition of Bank Regulators," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(3), pages 305-329, August.
    9. Sinn, Hans-Werner, 1982. "Kinked utility and the demand for human wealth and liability insurance," European Economic Review, Elsevier, vol. 17(2), pages 149-162.
    10. Oates, Wallace E. & Schwab, Robert M., 1988. "Economic competition among jurisdictions: efficiency enhancing or distortion inducing?," Journal of Public Economics, Elsevier, vol. 35(3), pages 333-354, April.
    11. Hans-Werner Sinn, 2001. "The New Systems Competition," CESifo Working Paper Series 623, CESifo.
    12. Edward L. Glaeser & Matthew E. Kahn, 1999. "From John Lindsay to Rudy Giuliani: the decline of the local safety net?," Economic Policy Review, Federal Reserve Bank of New York, vol. 5(Sep), pages 117-132.
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    More about this item

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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