Subsidiarity for a Changing Union

The subsidiarity principle’s underlying rationale lies in the fundamental principle of constitutional design: competences should be allocated to the level of government that can best exercise them. The efficiency with which a level of government can carry out a given competence determines its fitness under the subsidiarity principle. Centralization is warranted only if it is allowed to capture efficiencies beyond what member states or individuals could achieve by acting at the local level. A subsidiarity test can take different formats, thus yielding different outcomes. Moreover, the final allocation of competences has to consider the interplay of economies of scale, economies of scope, and heterogeneity of preferences in the various countries participating to the union. This represents a major challenge in a changing union.