Principle of Subsidiarity as Principle of Economic Efficiency

Abstract

The principle of subsidiarity – whereby a power said to be shared between the European Union and its Member States is exercised at the appropriately lowest level of governance – is a general principle of European Union law whose valence has been widely discussed. The legal valence of the subsidiarity principle has been criticized for emphasizing its political valence. However, this approach lacks the power to explain both the weight of the principle of subsidiarity in the EU Treaties and the case-law on the subsidiarity principle. What is the principle of subsidiarity and which valence does it have?

In this paper, the kernel of the argument to be developed is that the principle of subsidiarity is better apprehended in its current form when its economic valence is underlined. Precisely, the principle of subsidiarity contains in its core the principle of economic efficiency. Not only does the proposal “subsidiarity-as-efficiency” allows to better comprehend the European Union law on subsidiarity, but also does it reveals that the European case-law on subsidiarity tends to promote the economic efficiency through subsidiarity.

We shall begin our discussion by reviewing the basic notions of the EU principle of subsidiarity (I) before delving into the efficiency rationale of the subsidiarity principle (II). Then, the study of the European case-law show us that the principle of economic efficiency is clearly encapsulated in the judicial interpretation (III) – rendering the European case-law on the principle of subsidiarity economically sound with respect to promotion of efficiency through subsidiarity (IV).

Keywords: Law and Economics, Subsidiarity, Efficiency

JEL Classification: K33