Skip to main content
×
×
Home

Competitive federalism, government's dual role and the power to tax

  • VIKTOR J. VANBERG (a1)
Abstract
Abstract

Theories of competitive federalism generally focus on exit as the principal mechanism for making governments responsive to the interests of those who are subject to their powers. This paper draws attention to the fact that democratic governments act in two distinguishable roles, as ‘territorial enterprises’ and as ‘club enterprises’. As territorial enterprises they define and enforce the rules and terms that apply to everybody, whether citizen or alien, who resides and/or operates within their jurisdictional boundaries. As club enterprises, they define and enforce the rules and terms of membership in the respective polity. The focus of this paper is on the implications of the fact that ‘exit’ means something different when one looks at governments’ role as territorial enterprises (exit = leaving the territory) in contrast to their role as club enterprises (exit = giving up one's membership status/citizenship).

Copyright
Corresponding author
*Email: vanberg@eucken.de
References
Hide All
Brennan G. and Buchanan J. M. (1980), The Power to Tax – Analytical Foundations of a Fiscal Constitution, Cambridge: Cambridge University Press.
Breton A. (1987), ‘Towards a Theory of Competitive Federalism’, European Journal of Political Economy, 3: 263329.
Buchanan J. M. (1960 [1949]), ‘The Pure Theory of Government Finance’, in Buchanan J. M. (ed.), Fiscal Theory and Political Economy – Selected Essays, Chapel Hill: The University of North Carolina Press, pp. 823.
Buchanan J. M. (1975), The Limits of Liberty – Between Anarchy and Leviathan, Chicago and London: The University of Chicago Press.
Buchanan J. M. (1977 [1976]), ‘Taxation in Fiscal Exchange’, in Buchanan J. M., Freedom in Constitutional Contract, College Station and London: Texas A&M University Press, pp. 254270.
Buchanan J. M. (1984), ‘Ethical Limits of Taxation’, Scandinavian Journal of Economics, 86: 102114.
Buchanan J. M. (2000 [1979]), ‘Constitutional Constraints on Governmental Taxing Power’, Debt and Taxes, Vol. 14 of The Collected Works of James M. Buchanan, Indianapolis: Liberty Fund, pp. 250265.
Buchanan J. M. (2001 [1985]), ‘Political Economy and Social Philosophy’, Moral Science and Moral Order, Vol. 17 of The Collected Works of James M. Buchanan, Indianapolis: Liberty Fund, pp. 235250.
Buchanan J. M. (2001 [1995]), ‘Federalism as an Ideal Political Order and an Objective for Constitutional Reform’, Federalism, Liberty, and the Law, Vol. 18, the Collected Works of James M. Buchanan, Indianapolis: Liberty Fund, pp. 6778.
Buchanan J. M. (2001 [1995/96]), ‘Federalism and Individual Sovereignty’, Federalism, Liberty, and the Law, Vol. 18 of The Collected Works of James M. Buchanan, Indianapolis: Liberty Fund, pp. 7989.
Buchanan J. M. and Flowers M. R. (1987), The Public Finances. An Introductory Textbook, Sixth Edition, Homewood, Ill: Irwin.
Dercks A. (1996), Redistributionspolitik und föderale Ordnung, Köln: Institut für Wirtschaftspolitik an der Universität zu Köln.
De Viti de Marco A. (1936 [1928]), First Principles of Public Finance, London: Jonathan Cape.
Dye T. R. (1990), American Federalism: Competition Among Governments, Lexington, Massachusetts/Toronto: Lexington Books.
Feld L. (2005), ‘The European Constitution Project from the Perspective of Constitutional Political Economy’, Public Choice, 122: 417448.
Gerloff W. (1928), ‘Die Rechtfertigung der Besteuerung’, in Teschemacher H. (ed.), vol. 2, Tübingen: J.C.B. Mohr (Paul Siebeck), pp. 141157.
Hayek F. A. (1948 [1939]), ‘The Economic Conditions of Interstate Federalism’, in Hayek F. A., Individualism and Economic Order, Chicago: The University of Chicago Press, pp. 255272.
Hayek F. A. (1960), The Constitution of Liberty, Chicago: The University of Chicago Press.
Hayek F. A. (1973), Law, Legislation and Liberty, Vol. 1, Rules and Order, London and Henley: Routledge & Kegan Paul.
Hayek F. A. (1978), ‘Whither Democracy?’, New Studies in Philosophy, Politics, Economics and the History of Ideas, Chicago: The University of Chicago Press, pp. 152162.
Hayek F. A. (1979), The Political Order of a Free People. Vol. 3 of Law, Legislation and Liberty, London and Henley: Routledge & Kegan Paul.
Hirschman A. O. (1970), Exit, Voice and Loyalty. Responses to Decline in Firms, Organizations and States, Cambridge MA: Harvard University Press.
Kerber W. (2000), ‘Interjurisdictional Competition Within the European Union’, Fordham International Law Journal, 23: S217S249.
Knight F. H. (1982 [1947]), ‘The Sickness of Liberal Society’, Freedom and Reform – Essays in Economics and Social Philosophy, Indianapolis: Liberty Press, pp. 440478.
Lindahl E. (1919), Die Gerechtigkeit der Besteuerung, Lund: Gleerupska Universitets-Bokhandeln.
Musgrave R. A. (1969), ‘Theories of Fiscal Federalism’, Public Finance, 24: 521532.
Musgrave R. A. (1999), ‘Fiscal Federalism’, in Buchanan J. M. and Musgrave R. A. (eds.), Public Finance and Public Choice. Two Contrasting Visions of the State, Cambridge: MIT Press, pp. 155175.
Niskanen W. (2006), ‘Build a Wall around the Welfare State, Not around the Country’, Cato Policy Report, September/October 2006, Washington: Cato Institute.
Nowrasteh A. and Cole S. (2013), ‘Building a Wall around the Welfare State, Instead of the Country’, Policy Analysis No. 732, July 25, 2013, Washington: Cato Institute.
Oates W. E. (1972), Fiscal Federalism, New York: Harcourt Brace Jovanovich.
Popper K. R. (1966), The Open Society and Its Enemies, 2vls., Princeton, NJ: Princeton University Press.
Preuss H. (1964 [1889]), Gemeinde, Staat, Reich als Gebietskörperschaften – Versuch einer deutschen Staatskonstruktion auf Grundlage der Genossenschaftstheorie, Neudruck der Ausgabe Berlin 1889, Aalen: Scientia Verlag.
Proudhon P.-J. (2012 [1861]), Theorie der Steuer, Marburg: Metropolis-Verlag (the French original Théorie de l'Impot was published in 1861).
Rawls J. (1971), A Theory of Justice, Cambridge, MA: Harvard University Press.
Rawls J. (1999), The Law of People, Cambridge, MA: Harvard University Press.
Schanz G. (1892), ‘Zur Frage der Steuerpflicht’, Finanzarchiv, 9: 174.
Schönberger C. (2005), Unionsbürger – Europas föderales Bürgerrecht in vergleichender Sicht, Tübingen: Mohr Siebeck.
Schönberger C. (2007), ‘European Citizenship as Federal Citizenship. Some citizenship lessons of comparative federalism’, European Review of Public Law, 19: 6181.
Sinn H.-W. (1990), ‘The Limits to Competition Between Economic Regimes’, Empirica, 17: 314.
Sinn H.-W. (1994), ‘How Much Europe? Subsidiarity, Centralization and Fiscal Competiton’, Scottish Journal of Political Economy, 41: 85107.
Sinn H.-W. (1997), ‘The Selection Principle and Market Failure in Systems Competition’, Journal of Public Economics, 66: 247274.
Stigler G. J. (1965), ‘The Tenable Range of Functions of Local Government’, in Phelps E. S. (ed.), Private Wants and Public Needs, rev. ed., New York: W.W. Norton, 167176.
Tiebout C. (1956), ‘A Pure Theory of Local Expenditure’, Journal of Political Economy, 64: 416424.
Vanberg V. J. (2011), ‘Competition among governments: The state's two roles in a globalized world’, in Choi Y. B. (ed.), Institutional Economics and National Competitiveness, London and New York: Routledge, pp. 2443.
Vaubel R. (2008), ‘A history of thought on institutional competition’, in Bergh A. and Höijer R. (eds.), Institutional Competition, Cheltenham, UK, and Northampton, MA, USA: Edward Elgar, pp. 2966.
Weingast B. R. (1995), ‘The Economic Role of Political Institutions: Market Preserving Federalism and Economic Development’, Journal of Law, Economics & Organization, 11: 131.
Weingast B. R. (2008), ‘The Performance and Stability of Federalism’, in Ménard C. and Shirley M. M. (eds.), Handbook of New Institutional Economics, Berlin Heidelberg: Springer, pp. 149172.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Journal of Institutional Economics
  • ISSN: 1744-1374
  • EISSN: 1744-1382
  • URL: /core/journals/journal-of-institutional-economics
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Metrics

Full text views

Total number of HTML views: 7
Total number of PDF views: 84 *
Loading metrics...

Abstract views

Total abstract views: 271 *
Loading metrics...

* Views captured on Cambridge Core between September 2016 - 17th December 2017. This data will be updated every 24 hours.