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In unitary states -- states in which constitutional powers are owned by the central government -- vertical competition can generate stable outcomes, ie, outcomes that do not unravel through arbitrary repossessions by the center. Stability is a product of institutional commitment devices. Through these, a democratic government, though it cannot bind successor governments, can effectively oblige them to respect some of the decisions it has made. A number of such commitment devices exist in Italy; they make possible stable vertical competition between central & regional governments. 35 References. Adapted from the source document.

Albert Breton and Pierre Salmon argue that the effects of constitutional rules depend on the nature of political competition and on some meta-rules that contain procedures regulating the application and the modification of constitutional rules. They outline two models of competition - electoral competition and compound government competition - and describe thenature of the transactions between the parties involved in the two corresponding settings. In both, the transactions are over constitutional rules and ordinary goods and services, all of which are arguments in the utility functions of citizens. To make the discussion more concrete, the paper focuses on the demand for political autonomy, a variable which, at the limit, becomes a demand for secession and independence. This allows the specification of some meta-rules applicable to secessionism. In this particular context, it appears that relatively small differences in the content of the meta-rules lead to large differences in equilibrium outcomes.

The traditional school of economic policy analysis predicts that globalisation will give rise to predatory competition between the governments of the European nation states. The consequence is anticipated to be a marked reduction in, if not the destruction of, the benevolent Welfare State. The objective of this contribution is to present the main arguments that have led us to believe that, this traditional literature notwithstanding, a European constitution should not restrict but rather should encourage horizontal and vertical governmental competition. In our view the European political order, in defining the relationship among member states and also the relationship between the member states and the EU, ought to be inspired by what we know about competition in the commercial sphere.

Albert Breton and Pierre Salmon argue that the effects of constitutional rules depend on the nature of political competition and on some meta-rules that contain procedures regulating the application and the modification of constitutional rules. They outline two models of competition - electoral competition and compound government competition - and describe thenature of the transactions between the parties involved in the two corresponding settings. In both, the transactions are over constitutional rules and ordinary goods and services, all of which are arguments in the utility functions of citizens. To make the discussion more concrete, the paper focuses on the demand for political autonomy, a variable which, at the limit, becomes a demand for secession and independence. This allows the specification of some meta-rules applicable to secessionism. In this particular context, it appears that relatively small differences in the content of the meta-rules lead to large differences in equilibrium outcomes.

In a world in which barriers to trade at all levels - international and internal - are mostly a by-product of the implementation by governments of different regulatory policies to deal with domestic or local problems, the mechanisms that are set in motion by the operation of competition among the governments inhabiting the different jurisdictional tiers of federal countries lead to outcomes that are different from those generated by the 'agreed-upon' rules that govern the relations of national governments with each other in matters of international trade. A model is used to compare two ways of dealing with the external damages that are consequent on the pursuit of beneficial domestic regulatory policies. It assumes that at the international level the methods used can be synthesized by what is known as the least-restrictive means principle, while in the context of competitive federalism the methods lead to what can be called a proper balancing of benefits and costs of domestic policies, including the spillover costs inflicted on others. With the help of this model, the paper shows that one or the other of the two sets of methods could be more restrictive, depending on the magnitude of spillovers and the relation between the instrument used and the achievement of the domestic objective. It includes also a discussion of the case of the European Union, which falls between these two polar extremes.

In a world in which barriers to trade at all levels - international and internal - are mostly a by-product of the implementation by governments of different regulatory policies to deal with domestic or local problems, the mechanisms that are set in motion by the operation of competition among the governments inhabiting the different jurisdictional tiers of federal countries lead to outcomes that are different from those generated by the 'agreed-upon' rules that govern the relations of national governments with each other in matters of international trade. A model is used to compare two ways of dealing with the external damages that are consequent on the pursuit of beneficial domestic regulatory policies. It assumes that at the international level the methods used can be synthesized by what is known as the least-restrictive means principle, while in the context of competitive federalism the methods lead to what can be called a proper balancing of benefits and costs of domestic policies, including the spillover costs inflicted on others. With the help of this model, the paper shows that one or the other of the two sets of methods could be more restrictive, depending on the magnitude of spillovers and the relation between the instrument used and the achievement of the domestic objective. It includes also a discussion of the case of the European Union, which falls between these two polar extremes.

When purchasing goods and services, governments often discriminate in favour of domestic suppliers. It is widely assumed that such behaviour is motivated by protectionism. Although this interpretation is sometimes valid, it is also puzzling. After reviewing some of the puzzles, the paper proposes an alternative explanation of preferential procurement based on the assumption that governmental buyers want to purchase goods and services at minimum cost, but must do this in a context in which, because of the presence of unverifiable services, contracts are necessarily incomplete. The paper argues that preferential purchasing can guarantee the efficient delivery of these unverifiable services. ; Dans leurs achats de biens et services, les Etats discriminent souvent en faveur des producteurs nationaux. On attribue généralement ce comportement à une motivation protectionniste. Cette interprétation est parfois valide, mais elle est aussi problématique. Après avoir exposé certaines des interrogations qu'elle suscite, le texte propose une autreexplication de la discrimination dans les achats publics, fondée sur l'hypothèse que les acheteurs publics veulent se procurer des biens et services au coût minimum mais, en raison de la présence de services non-vérifiables, doivent le faire dans un contexte de contrats incomplets. L'article essaie de montrer que la discrimination peut garantir unefourniture efficace de ces services non-vérifiables.

When purchasing goods and services, governments often discriminate in favour of domestic suppliers. It is widely assumed that such behaviour is motivated by protectionism. Although this interpretation is sometimes valid, it is also puzzling. After reviewing some of the puzzles, the paper proposes an alternative explanation of preferential procurement based on the assumption that governmental buyers want to purchase goods and services at minimum cost, but must do this in a context in which, because of the presence of unverifiable services, contracts are necessarily incomplete. The paper argues that preferential purchasing can guarantee the efficient delivery of these unverifiable services. ; Dans leurs achats de biens et services, les Etats discriminent souvent en faveur des producteurs nationaux. On attribue généralement ce comportement à une motivation protectionniste. Cette interprétation est parfois valide, mais elle est aussi problématique. Après avoir exposé certaines des interrogations qu'elle suscite, le texte propose une autreexplication de la discrimination dans les achats publics, fondée sur l'hypothèse que les acheteurs publics veulent se procurer des biens et services au coût minimum mais, en raison de la présence de services non-vérifiables, doivent le faire dans un contexte de contrats incomplets. L'article essaie de montrer que la discrimination peut garantir unefourniture efficace de ces services non-vérifiables.