The New Systems Competition
24 Pages Posted: 25 Jan 2002
There are 2 versions of this paper
The New Systems Competition
The New Systems Competition
Date Written: December 2001
Abstract
While the old systems competition took place within closed borders, globalisation has brought about a new type of systems competition that is driven by the mobility of factors of production. The new systems competition is likely to lead to the erosion of the European welfare state, induce a race to the bottom in the sense that capital will not even pay for the infrastructure it uses and erode national regulatory systems. In general, it will suffer from the same type of market failure which induced the respective government activity in the first place. The new systems competition will force inefficient governments to seek national efficiency, but national efficiency does not imply that systems competition will itself be efficient.
Keywords: Fiscal Competition, Regulation, Immigration
JEL Classification: G1, H7
Suggested Citation: Suggested Citation
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