Creeping Federalization

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Creeping Federalization

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dc.contributor.author Sweeney, Richard J. en_US
dc.date.accessioned 2009-02-04T10:24:53Z
dc.date.available 2009-02-04T10:24:53Z
dc.date.issued 2003-11-21T00:00:00Z en_US
dc.identifier.uri http://hdl.handle.net/10398/6806
dc.description.abstract The U.S. Constitution importantly limits the degree to which the federal government can impose harmonization across member states. This paper reviews these limitations and how they have evolved substantially over time in the U.S. It also discusses some of the benefits and costs of such limitations, and argues that the EU may benefit from adopting similar limitations. Harmonization of EU tax codes is likely to be economically harmful. On theoretical grounds, tax rates are likely to be harmonized at a common rate that is higher than optimal for the EU. This suggests the benefits of constitutional provisions that make tax harmonization difficult to impose. Other types of harmonization have a less clear-cut costbenefit analysis. A federal commercial code that is uniform across member states reduces transaction and information costs, compared to leaving important code issues to member states; further, many states may keep codes for long periods that are sub-optimal compared to a given federal code. A federal code may, however, fit poorly with other institutions of member states, potentially causing large costs. Leaving codes to the states leads to competition across states, and may generate forces for change for the better. Competition also generates information about the effectiveness and costs of different commercial codes. Because any country’s initial code is likely to be sub-optimal, and is likely to become less optimal over time, information on how to improve codes is valuable. Likely it is easier to learn and adapt from member states than from other countries. en_US
dc.format.extent 39 s. en_US
dc.language eng en_US
dc.relation.ispartofseries LEFIC working paper;2003-11 en_US
dc.subject.other usa en_US
dc.subject.other føderalisme en_US
dc.subject.other skatteharmonisering-eu en_US
dc.subject.other eu en_US
dc.title Creeping Federalization en_US
dc.type wp en_US
dc.accessionstatus modt03nov21 inrumo en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Institut for Finansiering en_US
dc.contributor.departmentshort LEFIC en_US
dc.contributor.departmentuk Department of Finance en_US
dc.contributor.departmentukshort DF en_US
dc.idnumber x656312687 en_US
dc.publisher.city København en_US
dc.publisher.year 2003 en_US
dc.title.subtitle Limits on Economic Harmonization in The United States and The European Union en_US


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