Chapter 4: Horizontal competition in multilevel governmental settings
Governmental systems, whether federations, unitary states, or a sui generis entity such as the European Union, always include many governments (national, regional and local), which always compete with each other (Breton 1996). Thus competition among governments is first of all a fact – a feature of existing arrangements whose importance varies in time and space but is never completely absent and is seldom negligible. But it is also a perspective. As such its adoption could easily lead to addressing under a different angle all the topics discussed in the vast literature devoted to federalism and decentralization. I will not discuss vertical competition (Breton 2006 and this volume), only competition among governments situated on the same tier of a governmental system: horizontal competition. This makes the task less overwhelming. Still, if only to avoid duplication with the others, this chapter glosses almost completely over aspects of the subject that are often considered essential, in particular normative implications. Conversely, special attention – with the objective of convincing readers that they deserve more attention – is devoted to relatively unheeded aspects of intergovernmental competition. Two main forms of horizontal competition among governments are considered in the literature. The best known – hereafter mobility-based competition – starts from the possibility that some individuals, goods, factors or firms move across jurisdictions as a response to the policies these jurisdictions implement. The second – horizontal yardstick competition – is based instead on the possibility that office-holders are rewarded or sanctioned on the basis of comparative assessments of performance across jurisdictions.
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