Changing institutions in the European Union. A public choice perspective

Abstract:

The papers which comprise this work arise from the first conference of the European Center for the Study of Public Choice (ECSPC), held in May 2001. The book is organised in three parts comprising nine chapters in all.

Part one addresses various fiscal issues under the heading of 'The underside of EU fiscal institutions: budget, deficit, debt and regulation'. Chapter one explores the influence that the past achievements of EMU (European Monetary Union) might have had on public finance. Chapter two seeks to illuminate the financial situation of the Member States and the influence of the Maastricht Treaty and the Stability Pact. Tax harmonisation and tax competition are discussed in chapter three which explores the federal solution for the EU. Chapter four closes the first part with a discussion on the role of regulation and budgetary constraints.

Part two opens with a fulsome chapter on the EMU as an emerging optimal currency area. The focus of chapter six is the prospect of a more powerful and effective international monetary organisation genuinely independent of its major donors. Chapter seven considers the important question of whether or not the Euro is bound to fail, and questions whether or not the European Central Bank would have sufficient power to keep the Euro stable in the face of inflationary pressure arising from a full employment fiscal policy.

Part three addresses 'Two issues at work: voting and contracting'. Chapter eight examines the role of parliamentary democracies and the interaction of electorate and government through the two-party system vis-à-vis a 'pure form of representative democracy' where collective opinions are formed in the Parliament. The final chapter explores the behavioural influences of a small country in Europe's integration and seeks to present general principles arising from the experience of Denmark.

The work will interest by scholars and students of public choice and political economy and EU integration.

Giuseppe Eusepi is Professor of Public Finance at the University of Rome 'La Sapienza', Italy. Friedrich Schneider is Professor of Economics and Public Finance, Johannes Kepler University of Linz, Austria.