The Allocation of Competencies in an International Union: A Positive Analysis

47 Pages Posted: 4 Jun 2003

See all articles by Michele Ruta

Michele Ruta

Economic Research Division, WTO; Columbia University - Columbia Business School, Economics; International Monetary Fund (IMF)

Date Written: April 2003

Abstract

This paper presents a positive theory of centralization of political decisions in an international union. My central claim is that lobbies play a role in determining the assignment of competencies to the union because their power of influence can increase or decrease under centralization. I show that in this setting a misallocation of prerogatives between the international union and national governments can be an outcome, both leading to excessive decentralization and/or non necessary centralization. This result reconciles a partial inconsistency that recent studies pointed out between the allocation of prerogatives in the EU and normative criteria, as laid out in the theoretical literature.

Keywords: Political economy, international unions, fiscal federalism, lobbying

JEL Classification: F02, D72, H77, P16

Suggested Citation

Ruta, Michele, The Allocation of Competencies in an International Union: A Positive Analysis (April 2003). Available at SSRN: https://ssrn.com/abstract=411583 or http://dx.doi.org/10.2139/ssrn.411583

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