The taming of Leviathan: Competition among governments

Abstract

This paper develops a model of governments in competition. With its help I hope to throw some light on the question of whether economists should advocate coordination or competition among governments. My conclusion will be a plea for less harmonization and more competition, a conclusion that I derive from the model presented. For the main part my analysis is a positive one: I present a model that I believe captures the situation of governments, voters and firms acting within a global economy characterized by a high mobility of capital.