Self-Defeating Subsidiarity: An Economic Analysis

37 Pages Posted: 17 Apr 2008 Last revised: 17 Nov 2008

Emanuela Carbonara

University of Bologna - Department of Economics

Barbara Luppi

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Faculty of Business and Economics; University of St. Thomas School of Law

Francesco Parisi

University of Minnesota - Law School; University of Bologna

Date Written: 2008

Abstract

In this paper we analyze the factors that should be considered when allocating a given policy function at a particular level of government and how these factors affect the growth and evolution of multi-level governments. After discussing the interplay of economies of scale, economies of scope, and heterogeneity of preferences in determining the optimal level of legal intervention, we show that the subsidiarity principle can have mixed effects as a firewall against progressive centralization. Our economic model of subsidiarity reveals that once some functions become centralized, further centralization becomes easier and often unavoidable. Contrary to its intended function, a piecemeal application of the subsidiarity principle can trigger a path-dependent avalanche of centralization, turning subsidiarity into a self-defeating statement of principle.

Keywords: Subsidiarity, Rule Competition, Centralization, Economies of Scope

JEL Classification: D70, H73, K33, P16

Suggested Citation

Carbonara, Emanuela and Luppi, Barbara and Parisi, Francesco, Self-Defeating Subsidiarity: An Economic Analysis (2008). Minnesota Legal Studies Research Paper No. 08-15. Available at SSRN: https://ssrn.com/abstract=1120947 or http://dx.doi.org/10.2139/ssrn.1120947

Emanuela Carbonara

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, 40126
Italy
+39 051 2098149 (Phone)
+39 051 2098040 (Fax)

Barbara Luppi

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Faculty of Business and Economics ( email )

Viale Berengario 51
41100 Modena, Modena 41100
Italy

University of St. Thomas School of Law

2115 Summit Avenue
Saint Paul, MN 55105
United States

Francesco Parisi (Contact Author)

University of Minnesota - Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States

University of Bologna ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

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