IDEAS home Printed from https://ideas.repec.org/p/ecb/ecbwps/2003220.html
   My bibliography  Save this paper

The allocation of competencies in an international union: a positive analysis

Author

Listed:
  • Ruta, Michele

Abstract

This paper presents a positive theory of centralization of political decisions in an international union. My central claim is that lobbies play a role in determining the assignment of competencies to the union because their power of influence can increase or decrease under centralization. I show that in this setting a misallocation of prerogatives between the international union and national governments can be an outcome, both leading to excessive decentralization and/or non necessary centralization. This result reconciles a partial inconsistency that recent studies pointed out between the allocation of prerogatives in the EU and normative criteria, as laid out in the theoretical literature. JEL Classification: F02, D72, H77, P16

Suggested Citation

  • Ruta, Michele, 2003. "The allocation of competencies in an international union: a positive analysis," Working Paper Series 220, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:2003220
    as

    Download full text from publisher

    File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp220.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Timothy Besley & Stephen Coate, 1999. "Centralized versus Decentralized Provision of Local Public Goods: A Political Economy Analysis," NBER Working Papers 7084, National Bureau of Economic Research, Inc.
    2. Persson, Torsten, 1998. "Economic Policy and Special Interest Politics," Economic Journal, Royal Economic Society, vol. 108(447), pages 310-327, March.
    3. Daniel Brou & Michele Ruta, 2004. "A Positive Explanation of EU Enlargement," Economics Working Papers ECO2004/30, European University Institute.
    4. Grossman, Gene M & Helpman, Elhanan, 1995. "The Politics of Free-Trade Agreements," American Economic Review, American Economic Association, vol. 85(4), pages 667-690, September.
    5. B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(1), pages 1-31.
    6. Persson, Torsten & Tabellini, Guido, 1999. "Political economics and macroeconomic policy," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 22, pages 1397-1482, Elsevier.
    7. Alberto Alesina & Ignazio Angeloni & Ludger Schuknecht, 2005. "What does the European Union do?," Public Choice, Springer, vol. 123(3), pages 275-319, June.
    8. Daniel Brou & Michele Ruta, 2003. "Lobbying, Bargaining and EU Enlargement," Rivista di Politica Economica, SIPI Spa, vol. 93(1), pages 195-216, January-F.
    9. Cremer, Jacques & Palfrey, Thomas R., 1996. "In or out?: Centralization by majority vote," European Economic Review, Elsevier, vol. 40(1), pages 43-60, January.
    10. Dixit, Avinash & Grossman, Gene M & Helpman, Elhanan, 1997. "Common Agency and Coordination: General Theory and Application to Government Policy Making," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 752-769, August.
    11. Alesina, Alberto & Angeloni, Ignazio & Etro, Federico, 2001. "The Political Economy of International Unions," CEPR Discussion Papers 3117, C.E.P.R. Discussion Papers.
    12. Wallace E. Oates & Wallace E. Oates, 2004. "An Essay on Fiscal Federalism," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 22, pages 384-414, Edward Elgar Publishing.
    13. Kyle Bagwell & Robert W. Staiger, 2004. "The Economics of the World Trading System," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262524341, April.
    14. Helpman Elhanan & Persson Torsten, 2001. "Lobbying and Legislative Bargaining," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 1(1), pages 1-33, November.
    15. Kishore Gawande & Pravin Krishna & Michael J. Robbins, 2006. "Foreign Lobbies and U.S. Trade Policy," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 563-571, August.
    16. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(3), pages 371-400.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michele Ruta, 2005. "Economic Theories of Political (Dis)integration," Journal of Economic Surveys, Wiley Blackwell, vol. 19(1), pages 1-21, February.
    2. Federico Etro, 2004. "The Political Economy of Fiscal and Monetary Unions," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 63(3-4), pages 289-328, December.
    3. Michele Ruta, 2010. "Lobbying and (de)centralization," Public Choice, Springer, vol. 144(1), pages 275-291, July.
    4. Daniel Brou & Michele Ruta, 2006. "Special Interests And The Gains From Political Integration," Economics and Politics, Wiley Blackwell, vol. 18(2), pages 191-218, July.
    5. repec:dau:papers:123456789/4071 is not listed on IDEAS
    6. Ascari, Guido & Rankin, Neil, 2007. "Perpetual youth and endogenous labor supply: A problem and a possible solution," Journal of Macroeconomics, Elsevier, vol. 29(4), pages 708-723, December.
    7. Ruta, Michele, 2009. "Political constraints to growth in an economic union," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 989-997, August.
    8. International Monetary Fund, 2009. "A European Mandate for Financial Sector Supervisors in the EU," IMF Working Papers 2009/005, International Monetary Fund.
    9. Libman, Alexander, 2005. "Взаимодействие Государственных И Частных Структур В Интеграционных Группировах: Теоретические Подходы И Опыт Снг [Interaction of Public and Private Actors in Regional Integration Groups - Theoretic," MPRA Paper 17044, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659, Elsevier.
    2. Zudenkova, Galina, 2010. "Sincere Lobby Formation," Working Papers 2072/151545, Universitat Rovira i Virgili, Department of Economics.
    3. Pravin Krishna & Devashish Mitra, 2003. "Reciprocated Unilateralism in Trade Policy: An Interest-Group Approach," NBER Working Papers 9631, National Bureau of Economic Research, Inc.
    4. Bordignon, Massimo & Colombo, Luca & Galmarini, Umberto, 2008. "Fiscal federalism and lobbying," Journal of Public Economics, Elsevier, vol. 92(12), pages 2288-2301, December.
    5. Bennedsen, Morten & Feldmann, Sven E., 2006. "Informational lobbying and political contributions," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 631-656, May.
    6. Ben Lockwood, 2008. "Voting, Lobbying, And The Decentralization Theorem," Economics and Politics, Wiley Blackwell, vol. 20(3), pages 416-431, November.
    7. Leonardo Felli & Antonio Merlo, 2006. "Endogenous Lobbying," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 180-215, March.
    8. Y. Hossein Farzin & Jinhua Zhao, 2003. "Pollution Abatement Investment When Firms Lobby Against Environmental Regulation," Working Papers 2003.82, Fondazione Eni Enrico Mattei.
    9. Aidt, Toke S., 1998. "Political internalization of economic externalities and environmental policy," Journal of Public Economics, Elsevier, vol. 69(1), pages 1-16, July.
    10. Masahiro Endoh, 2012. "Cross-border political donations and Pareto-efficient tariffs," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 21(4), pages 493-512, July.
    11. Laussel, Didier & Le Breton, Michel, 2001. "Conflict and Cooperation: The Structure of Equilibrium Payoffs in Common Agency," Journal of Economic Theory, Elsevier, vol. 100(1), pages 93-128, September.
    12. Pokrivcak, Jan, 2007. "Economics and Political Economy of Regional Trade Agreements," Working Papers 7286, TRADEAG - Agricultural Trade Agreements.
    13. Irina Slinko & Ekaterina Zhuravskaya & Evgeny Yakovlev, 2005. "Laws for Sale: Evidence from Russia," American Law and Economics Review, American Law and Economics Association, vol. 7(1), pages 284-318.
    14. Martimort, David, 2019. ""When Olson Meets Dahl": From Inefficient Groups Formation to Inefficient Policy-Making," CEPR Discussion Papers 13843, C.E.P.R. Discussion Papers.
    15. Campante, Filipe R. & Ferreira, Francisco H.G., 2007. "Inefficient lobbying, populism and oligarchy," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 993-1021, June.
    16. Silva, Peri, 2011. "The role of importers and exporters in the determination of the U.S. tariff preferences granted to Latin America," Journal of Development Economics, Elsevier, vol. 94(2), pages 207-219, March.
    17. H.J. Roelfsema, 2004. "Legislative Bargaining and Lobbying in the European Union," Working Papers 04-16, Utrecht School of Economics.
    18. Graham Mallard, 2014. "Static Common Agency And Political Influence: An Evaluative Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 17-35, February.
    19. Martimort, David & Stole, Lars, 2024. "Menu Auctions Under Asymmetric Information," TSE Working Papers 24-1592, Toulouse School of Economics (TSE).
    20. Gulati, Sumeet, 2001. "The Effects of Choosing Free Trade on Endogenous Environmental Regulation and Welfare: A Model of Common Agency Government," 2001 Annual meeting, August 5-8, Chicago, IL 20449, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

    More about this item

    Keywords

    fiscal federalism; international unions; lobbying; political economy;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecb:ecbwps:2003220. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Official Publications (email available below). General contact details of provider: https://edirc.repec.org/data/emieude.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.