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How Much Europe? Subsidiarity, Centralization and Fiscal Competition

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  • Sinn, Hans-Werner

Abstract

This paper attempts to give a meaning to the empty concept of subsidiarity. It examines various kinds of government activity with respect to the optimal layer of government in Europe at which these activities should be performed. The paper criticizes Europe's industrial policies and its protectionism, and it points to European-wide public-goods and redistribution problems which make centralized government actions a matter of necessity. The paper's main focus is on the free movement of goods, capital, labour and services. It is argued that these movements will induce a process of fierce fiscal competition in which an inverse redistribution from the poor to the rich will emerge, where consumer protection becomes eroded and environmental standards are overdrawn.

Suggested Citation

  • Sinn, Hans-Werner, 1993. "How Much Europe? Subsidiarity, Centralization and Fiscal Competition," CEPR Discussion Papers 834, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:834
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    Keywords

    Fiscal Competition; Subsidiarity;

    JEL classification:

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

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