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Testing for Subsidiarity

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  • Jacques Pelkmans

    (Senior Research Fellow, CEPS (Brussels); Visiting Professor, College of Europe (Bruges))

Abstract

In the EU circuit (especially the European Parliament, the Council and Coreper) as well as in national parliaments of the EU Member States, one observes a powerful tendency to regard 'subsidiarity' as a 'political' issue. Moreover, subsidiarity is frequently seen as a one-way street : powers going 'back to' Member States. Both interpretations are at least partly flawed and less than helpful when looking for practical ways to deal with subsidiarity at both EU and Member states' levels. The present paper shows that subsidiarity as a principle is profoundly 'functional' in nature and, hence, is and must be a two-way principle. A functional subsidiarity test is developed and its application is illustrated for a range of policy issues in the internal market in its widest sense, for equity and for macro-economic stabilisation questions in European integration. Misapplications of 'subsidiarity' are also demonstrated. For a good understanding, subsidiarity being a functional, two-way principle neither means that elected politicians should not have the final (political!) say (for which they are accountable), nor that subsidiarity tests, even if properly conducted, cannot and will not be politicised once the results enter the policy debate. Such politicisation forms a natural run-up to the decision-making by those elected for it. But the quality and reasoning of the test as well as structuring the information in a logical sequence ( in accordance with the current protocol and with the one in the constitutional treaty) is likely to be directly helpful for decision-makers, confronted with complicated and often specialised proposals. EU debates and decision-making is therefore best served by separating the functional subsidiarity test (prepared by independent professionals) from the final political decision itself. If the test were accepted Union-wide, it would also assist national parliaments in conducting comparable tests in a relatively short period, as the basis for possible joint action (as suggested by the constitutional treaty). The core of the paper explains how the test is formulated and applied. A functional approach to subsidiarity in the framework of European representative democracy seeks to find the optimal assignment of regulatory or policy competences to the various tiers of government. In the final analysis, this is about structures facilitating the highest possible welfare in the Union, in the fundamental sense that preferences and needs are best satisfied. What is required for such an analysis is no less than a systematic cost/benefit framework to assess the (de)merits of (de)centralisation in the EU.

Suggested Citation

  • Jacques Pelkmans, 2006. "Testing for Subsidiarity," Bruges European Economic Policy Briefings 13, European Economic Studies Department, College of Europe.
  • Handle: RePEc:coe:wpbeep:13
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    References listed on IDEAS

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    Cited by:

    1. Bitoiu Teodora & Radulescu Crina, 2015. "Craving For Balanced Public Decision-Making On Market Failure Pertaining To The Interventionist Economic Policies Strainer," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 157-164, July.
    2. Riana Iren RADU & Violeta ISAI, 2013. "Accounting and Financial Reports in the Gambling Monopoly - Measures for a Moral Economic System," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 67-72.
    3. Joanna Dreger & Aimé Heene, 2013. "European Integration and Europeanisation: Benefits and Disadvantages for Business," Bruges European Economic Policy Briefings 29, European Economic Studies Department, College of Europe.
    4. Franz Sinabell & Hans Pitlik & Erwin Schmid, 2009. "Zukunft der Finanzierung und Ausgaben der Gemeinsamen Agrarpolitik," WIFO Studies, WIFO, number 36165, April.
    5. Andrew Hughes Hallett, 2013. "Is Independence Possible in an Interdependent World? Scotland vs. the UK's Participation in the European Economy," Bruges European Economic Policy Briefings 30, European Economic Studies Department, College of Europe.
    6. Sjef Ederveen & George Gelauff & Jacques Pelkmans, 2008. "Assessing Subsidiarity," Springer Books, in: George Gelauff & Isabel Grilo & Arjan Lejour (ed.), Subsidiarity and Economic Reform in Europe, chapter 2, pages 19-40, Springer.
    7. Rahel Falk & Werner Hölzl & Hannes Leo, 2008. "On the Roles and Rationales of European STI-Policies," Springer Books, in: George Gelauff & Isabel Grilo & Arjan Lejour (ed.), Subsidiarity and Economic Reform in Europe, chapter 8, pages 129-142, Springer.
    8. Arjan Lejour, 2008. "The Principle of Subsidiarity and Innovation Support Measures," CPB Memorandum 208, CPB Netherlands Bureau for Economic Policy Analysis.
    9. Michel Aujean, 2010. "Tax policy in the EU: between harmonisation and coordination?," Transfer: European Review of Labour and Research, , vol. 16(1), pages 11-22, February.

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    More about this item

    Keywords

    subsidiarity; economics of federalism; fiscal federalism; optimal EU assignment of public economic functions.;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • F15 - International Economics - - Trade - - - Economic Integration

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