Centralization, Decentralization and Intergovernmental Competition

Randall White, a political scientist, is also a Toronto-based economic
consultant and author of Voice of Region: On the Long Journey to Senate
Reform in Canada.

Breton, a professor of economics at the University of Toronto, is a
leading Canadian practitioner in the “application of economic concepts
to . . . political phenomena,” especially noted for his contributions
to the technical literature on Canadian federalism. This is the text of
the Kenneth R. MacGregor Lecture he was invited to give at Queen’s
University in 1989.

The subject, very broadly, is what determines the optimum degree of
centralization (or “concentration”) in a federally organized
national state, with particular reference to “the increasingly
globally interdependent economy.”

Readers not versed in the technical literature may find the vocabulary
and style of argument somewhat mystifying at first. Those who persevere,
however, should discover that the genre can offer sharp insights into
highly complicated questions.

Breton concludes that competition among “political entrepreneurs”
at different levels of government is a key engine of progress in the
evolution of federal political systems. Ultimately, “intergovernmental
competition” is the “force which moves a governmental system from
one concentration equilibrium to another.”

To some this may sound a bit too much like an apology for the folkways
of the Canadian “executive federalism,” now discredited by the
failure of the Meech Lake Accord. Yet the supporting analysis is worth
pondering, even in the context of the new challenges that the federal
state in Canada is facing after Meech Lake.

Breton’s arguments also lead him to conclude with some provocative
comments on the real motivations behind the drive for a United Europe by
1992. This project, he speculates, may be much less about promoting free
trade, and much more about reasserting political control over the
increasingly “free-riding” forces of the global economy. Alas, he
does not explicitly comment on what the same trends might mean in North
America.