Towards fiscalization of the European Union? : the European and American fiscal unions in a comparative historical perspective
Title: Towards fiscalization of the European Union? : the European and American fiscal unions in a comparative historical perspective
Author: WOZNIAKOWSKI, Tomasz P.
Citation: Florence : European University Institute, 2018
Series/Number: EUI PhD theses; Department of Political and Social Sciences
My original contribution to knowledge is a demonstration that fiscalization, a concept I defined as a process that leads to the emergence of a federal power to tax, is triggered by an internal threat. This dissertation focuses on the economic governance of the European Union (EU) from a comparative historical perspective and shows that the emergence of the federal fiscal union is the result of a sovereign debt crisis at the state level. More specifically, it analyzes the conditions under which a supranational power to tax is likely to emerge by investigating the emergence of the United States (US) fiscal union in the late 18th century. I analyze the fiscal history of the early US to demonstrate how the institutional flaws of the Articles of Confederation, mainly the central budget based on contributions from the states, so-called ‘requisitions’, led to a sovereign debt crisis at the state level, which triggered taxpayers’ revolts in 1786/1787. I argue that an endogenous threat, exemplified by this social unrest caused by the heavy taxation that the states imposed to pay off the debt from the War of Independence, constituted such a condition. Consequently, this threat paved the way for the ‘fiscal bargain’, which led to fiscalization of the federal government, i.e. the creation of a fiscal union with the federal power to tax (‘federal fiscal union’) based firmly in the new Constitution of 1789. I then confronted the US experience with the EU ‘post-crisis’ economic governance through the lens of two instruments of integration: fiscalization and regulation. A comparison can shed a different light on a polity such as the EU. In a classical fiscal union such as the US, the federal government has fiscal capacity, but it does not have the power to regulate the fiscal policies of the states. In the EU, we can observe the reverse situation: the European institutions in the last few years have acquired a good deal of power to regulate national economic policies. For instance, under the European Semester the EU can even impose sanctions on the member states if they fail to take ‘the corrective action’ on the excessive macroeconomic imbalances. Moreover, it was decided not to go forward with the fiscalization process. I argue that this is because a threat emerging from the Euro crisis was not perceived as large enough to trigger a ‘fiscal bargain’. Paradoxically, by not agreeing to give the EU fiscal capacity, so that they could protect their fiscal sovereignty, member states gave up more of this very fiscal sovereignty to the central institutions, than states in classical federations.
Defence date: 15 March 2018; Examining Board: Professor Alexander H. Trechsel, University of Luzern/European Univeristy Institute (Supervisor); Professor Sergio Fabbrini, LUISS Guido Carli, Rome; Professor Alojzy Z. Nowak, University of Warsaw; Professor Sven H. Steinmo, University of Colorado, Boulder
Type of Access: embargoedAccess
Version: Chapters 1.1 'Introduction', 1.2 'The puzzle', 1.3 'Research question', 1.5 'Contribution', 2.1 'State of the art', 2.3 'The concept of fiscalization', 2.4 'Hypothesis', 3.1 'Case selection', 4.1 'Introduction', 4.2 'How did fiscalization of the us federal government emerge?' and 7 'The insights for the EU from the US federal experience' of the PhD thesis draws upon an earlier version published as an article 'Why the sovereign debt crisis could lead to a federal fiscal union : the paradoxical origins of fiscalization in the United States and insights for the European Union' (2017) in the journal 'Journal of European public policy' and an earlier version published as a working paper 'Towards fiscalization of the European Union? : the US and EU fiscal unions in a comparative historical perspective' (2016) in the University of California, Berkeley, Institute of European Studies Working Papers Series