From Economic to Legal Competition

From Economic to Legal Competition

New Perspectives on Law and Institutions in Europe

New Horizons in Law and Economics series

Edited by Alain Marciano and Jean-Michel Josselin

The idea of legal competition as a decentralized market process of law provision in which legal clubs compete, has earned an indisputable legitimacy among economists. This book presents a debate concerning the merits of and conditions for a competitive provision of law, with a special focus on institutions in Europe.

Chapter 8: Accounting or centralization in the European Union: Niskanen, Monnet or Thatcher?*

Pierre Salmon

Subjects: economics and finance, public finance, law - academic, european law

Extract

8. Accounting for centralization in the European Union: Niskanen, Monnet or Thatcher?* Pierre Salmon INTRODUCTION Competition among governments, internationally (among national governments) or in the setting of federations (among subcentral governments), is seen in a much more favourable light today than even only one or two decades ago (see Breton, 1996). This applies to the law-making and regulatory activities of governments as it does to the policy areas that involve public finance. In the setting of a single governmental system, inasmuch as intergovernmental competition is deemed beneficial, it provides an additional and powerful argument in favour of decentralization (see Salmon, 1987). In the case of the European Union (EU), this suggests that centralization, at least in some areas, by hampering beneficial competition, may go too far. In fact, a number of economists argue or feel that it does. This chapter is not primarily concerned with the normative, or quasi-normative, issue of whether the EU governmental system is too centralized. Its focus, rather, is on the question of the mechanisms that may account for the present state or trend of centralization (of course, an answer to the second question may affect one’s opinion about the normative issue). What are these mechanisms? Centralization in the EU is often ascribed (not only by the famed English tabloids) to the existence, inherent in the present arrangements, of a bureaucratic bias. Such a claim reflects a conception of bureaucracies that stress their tendency to expand – which evokes the name of William Niskanen. This first view...

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