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Polycentric Polity

Genuine vs. Spurious Federalism

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Originally published in Review of Law and Economics

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.

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.

Read the paper at Berkeley Electronic Press.

Citation: Eusepi, Giuseppe and Wagner, Richard E. (2010) "Polycentric Polity: Genuine vs. Spurious Federalism," Review of Law & Economics: Vol. 6: Iss. 3, Article 2.

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