Market mechanisms for policy decisions: tools for the European Union

摘要

The success of an enlarged European Union will require transparent and subtle mechanisms for policy coordination. A common policy is a public good, and economists have developed many schemes for the efficient provision of public goods. The European Union offers a promising soil for such schemes, but they must be simple and tailored to its specific needs. The paper discusses two possible examples: A system of tradable deficit permits implementing the fiscal constraints of the Maastricht treaty: and arule allowing country representatives to shift their own votes intertemporally when deliberations are taken in periodic committee meetings.