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RESEARCH PRODUCT

Vertical competition in a unitary state

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The paper is concerned with what Albert Breton, in his theory of competitive federalism has called vertical competition, that is, competition between governments situated at different levels. However its setting is government systems that are unitary rather than federal and structured around three or four levels of government rather than the two often implicitly assumed. The paper tries to show that these characteristics may offer a partial solution to what is perhaps the major problem raised by vertical competition, that is, how winners in a vertical contest get protected against retaliation by the losers when the latter can change the rules (which are not constitutionally entrenched). In federations, the problem typically arises in the context of the relationship between the intermediate (provincial or state) level and the local one. In unitary systems, the relationship affected is the one between the central government and the intermediate level, whereas the competitive relationship between the intermediate and the local levels may find some protection as an effect of the central government playing the role of a monitor. As is illustrated by the decentralization experience in France, a lively vertical competition at the bottom, between several subcentral tiers of government, may ensue.