Federalism is commonly described in contradictory fashion as involving both competition and decentralization. These descriptions may appear similar on the surface, but they emanate from contradictory analytical orientations. Competition entails a polycentric arrangement of competitors where there is no locus of control over the arrangement. In contrast, decentralization is a monocentric arrangement that involves a locus of control. To treat federalism as a method for decentralizing governments leads to a spurious form of federalism because the object that has been identified is not genuinely a competitively organized system of government. Genuine federalism requires a polycentric arrangement that is organized through openly competitive processes. In contrast, the spurious form of federalism allows hierarchy to trump open competition.
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Citation: Eusepi, Giuseppe and Wagner, Richard E. (2010) "Polycentric Polity: Genuine vs. Spurious Federalism," Review of Law & Economics: Vol. 6: Iss. 3, Article 2.