A theory of menu federalism: Decentralization by political agreement

Roger D. Congleton, Andreas Kyriacou, Jordi Bacaria

Research output: Contribution to journalReview articleResearchpeer-review

37 Citations (Scopus)

Abstract

This paper analyzes agreements between governments that determine the division of policy-making power between central and regional governments. Our analysis demonstrates that initial circumstances and political risks affect the degree of centralization that will be adopted, and that asymmetric forms of federalism are often consequences of ongoing negotiations between regional and central governments over the assignment of policy-making authority. We analyze three settings where gains from "constitutional exchange" may exist: (i) the under-centralized state, (ii) the over-centralized state, and (iii) the constitutional convention. In each case, an asymmetric form of federalism is the predicted outcome, although the degree of asymmetry differs according to starting point. Modern and historical examples are used to illustrate the relevance of our analysis.
Original languageEnglish
Pages (from-to)167-190
JournalConstitutional Political Economy
Volume14
Issue number3
DOIs
Publication statusPublished - 1 Sep 2003

Keywords

  • Asymmetric federalism
  • Constitutional economics
  • Constitutional evolution
  • Constitutional exchange
  • Endogenous decentralization
  • Federalism
  • Menu federalism
  • Political economy
  • Public choice
  • Trading power

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