The Optimal Decentralisation of Government Activity: Normative Recommendations for the European Constitution

Authors: Breuss F.¹; Eller M.²

Source: Constitutional Political Economy, Volume 15, Number 1, March 2004 , pp. 27-76(50)

Publisher: Springer

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Abstract:

This article surveys the research on the efficient assignment of policy tasks to different levels of government and applies the results on the delimitation of competencies within the EU. A precise derivation of an optimal degree of decentralisation is not possible on purely theoretical grounds, it has to be determined case-by-case. Systematic evidence on direct relationships between economic performance and fiscal decentralisation is both scarce and ambiguous. Comparing the actual and prospective delimitation of EU-competencies with the normative recommendations, remarkable discrepancies arise in the fields of agriculture and defence. The establishment of a flexible assignment scheme is an undeniable necessity in order to guarantee reversibility and to cope efficiently with changing conditions. In this respect, the European Convention has delivered insufficient results in its final draft Treaty as of July 2003.

Keywords: H11; H73; H87; P16; economic theory of federalism; fiscal federalism; decentralisation; allocative efficiency; european integration; constitutional economics; delimitation of competencies; european convention

Document Type: Research article

DOI: http://dx.doi.org/10.1023/B:COPE.0000017962.76744.33

Affiliations: 1: Research Institute for European Affairs (IEF), Vienna University of Economics and Business Administration (WU Wien), Althanstrasse 39-45, A-1090 Vienna, Austria;, Email: Fritz.Breuss@wu-wien.ac.at 2: Research Institute for European Affairs (IEF), Vienna University of Economics and Business Administration (WU Wien), Althanstrasse 39-45, A-1090 Vienna, Austria;, Email: Markus.Eller@wu-wien.ac.at

Publication date: 2004-03-01