Vertical interactions
This chapter considers yardstick competition in the context of multilevel governmental systems. Vertical interactions then arising complicate in various ways the working of yardstick competition. The first section is about the effect of these interactions on horizontal yardstick competition that is, on yardstick competition among governments situated at the same tier. Interactions may also take the form of vertical competition among governments situated at different tiers. The second section considers different forms of vertical competition, with a special focus on the form proposed by Albert Breton, based on a particular interpretation of yardstick competition. The second section also includes a discussion of vertical competition in unitary types of intergovernmental relations—when governments at one tier are entitled to change the rules. The third section is about yardstick competition in the European Union setting.