The challenge of extending: the international setting
This chapter’s discussion of yardstick competition among national governments is less about substance than about the puzzle raised by its almost complete neglect by researchers. It poses the question why, since there is much circumstantial evidence of the relevance of the mechanism in reality, there is so little work on it in the empirical literature. Admittedly, moving from the propitious setting of fiscal federalism to the relationship among national governments encounters technical difficulties. But it also encounters ideological and sociological obstacles. For instance, the specific situation of the United States with regard to the possible impact of yardstick competition, taken together with the well-deserved worldwide influence of US scholarship, may have something to do in the puzzling lack of attention that is also given to yardstick competition in the context of small open economies or societies such as the European ones.