Beyond Traditional Borders: A New Proposal for Federalism

Bruno S. Frey, University of Zurich and CREMA - Center for Research in Economics, Management and the Arts

Abstract

A federal, i.e. decentralized, state is superior to a centralized one because it fulfills the preferences of the citizens more effectively. However, it is also faced with major problems. Therefore, a new kind of democratic federalism for Europe is proposed which maintains the great advantages of federalism but which overcomes its most important weaknesses. Functional, overlapping, and competing jurisdictions (FOCJ) emerge in response to the 'geography of problems'. This concept suggests that prospective new member countries of the European Union should have the possibility of partially entering the EU with respect to functions where they expect positive net benefits.