Federalism and Decentralization: Ownership Rights and the Superiority of Federalism

Abstract

The benefits and costs usually ascribed to federalism are benefits and costs of decentralization; they are, therefore, present in unitary states that are in fact all decentralized. The benefits and costs specific to federalism pertain to ownership rights in constitutional powers. Federalism is superior to confederalism and unitarianism because the ownership rights peculiar to that system of government are such that they ensure the perdurance of competition when one or more competitors are unsuccessful. They do so because under federalism, powers cannot be repossessed unilaterally. Ownership rights have to be enforced; as a consequence, there are also costs that are specific to federalism.

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