Discussion Paper Details

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Title: How Much Europe? Subsidiarity, Centralization and Fiscal Competition

Author(s): Hans-Werner Sinn

Publication Date: September 1993

Keyword(s): Fiscal Competition and Subsidiarity

Programme Area(s): Applied Macroeconomics

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.

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Bibliographic Reference

Sinn, H. 1993. 'How Much Europe? Subsidiarity, Centralization and Fiscal Competition'. London, Centre for Economic Policy Research.