Political Yardstick Competition, Economic Integration, and Constitutional Choice in a Federation

30 Pages Posted: 1 Aug 2001

See all articles by Martin Bodenstein

Martin Bodenstein

Board of Governors of the Federal Reserve System

Heinrich W. Ursprung

University of Konstanz; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: June 2001

Abstract

This paper investigates the behavior of rent-seeking politicians in an environment of increasing economic integration. The focus of the paper is on the implications of globalization-induced political yardstick competition for constitutional design with a view to the current discussion in the European Union. In contrast to the established literature, we carefully portray the double-tiered government structure in federal systems. The number of lower-tier governments and the allocation of policy responsibilities to the two levels of government are subject to constitutional choice.

Keywords: Economic Integration, Federalism, Political Economy, Yardstick Competition

JEL Classification: D72, H73

Suggested Citation

Bodenstein, Martin and Ursprung, Heinrich, Political Yardstick Competition, Economic Integration, and Constitutional Choice in a Federation (June 2001). CESifo Working Paper Series No. 501. Available at SSRN: https://ssrn.com/abstract=277275

Martin Bodenstein

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Heinrich Ursprung (Contact Author)

University of Konstanz ( email )

Konstanz, D-78457
Germany
+49 7531 88 3713 (Phone)

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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