The political economy of overlapping jurisdictions and the French / Dutch rejection of the EU Constitution

Abstract: In seeking to protect their failed social model by rejecting the EU constitution, French and Dutch voters ironically contributed to promoting the very 'liberal' order they misunderstand and despise. When, as in federalist politics, functions overlap, two levels of government compete for the same votes in the same territory in the supply of similar services. Not unlike the tragedy of the commons in oil extraction, it is in the interest of both political authorities to seek to gain votes in implementing the programme first. The overall equilibrium supply of public services is excessive and both levels of government have a tendency to invade every field. Short of effective constitutional limits on the powers of the central government, a more decentralised EU offers an opportunity to overcome the common-pool problem of multi-level government.