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How much Europe? Subsidiarity, centralization and fiscal competition

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  • Sinn, Hans-Werner

Abstract

To date, the political discussion of Europe’s future suffers from a surprising lack of foundation in terms of economic theory: the straightforward theory of fiscal federalism, which has been well developed in a vast body of literature, has been largely neglected. This paper tries to help fill the gap. It tries to see Europe’s development through the glasses of economic theory and to help draw the borderline between activities that should be shifted to the Community level and those that can be left within the nation states. The paper will first criticize current developments in Europe and clarify which of these should be categorized as policy failures. It will then sketch the obvious reasons for centralization. Thirdly, and most importantly, it will discuss the implications for centralization that result from the four basic liberties on which Europe has irrevocably agreed. -from Author

Suggested Citation

  • Sinn, Hans-Werner, 1994. "How much Europe? Subsidiarity, centralization and fiscal competition," Munich Reprints in Economics 19838, University of Munich, Department of Economics.
  • Handle: RePEc:lmu:muenar:19838
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    1. Sinn, Hans-Werner, 1995. " A Theory of the Welfare State," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 495-526, December.
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    17. Vidar Christiansen, 1990. "Subsidization Of Risky Investment Under Income Taxation And Moral Hazard," The Warwick Economics Research Paper Series (TWERPS) 357, University of Warwick, Department of Economics.
    18. Sinn, Hans-Werner, 1986. "Risiko als Produktionsfaktor," Munich Reprints in Economics 19879, University of Munich, Department of Economics.
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    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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