NCPA - National Center for Policy Analysis

Government Without Territorial Monopoly

July 6, 2001

The most overlooked form of government you are likely to hear about is "functional, overlapping, competing jurisdictions (FOCJs)," according to Swiss political economist Bruno Frey in the summer issue of the Independent Review.

Most folks assume that for government to be government, it must have a well-defined territorial monopoly. But that is an unfortunate misconception because, argues Frey, the FOCJ model offers significant advantages over its cousin, traditional federalism.

FOCJ-like entities have existed throughout history. In cyberspace, the Internet Corporation for Assigned Names and Numbers, or ICANN, exhibits features common to FOCJs. But perhaps the best example in the "real world" is found in Switzerland.

  • In addition to 26 cantons, Switzerland has 2,940 political communes offering different tax rates and combinations of public services.
  • There are another 5,000 overlapping, functional special communes, such as school communes that offer education for children of one or several political communes.
  • These are public jurisdictions that levy their own tax, whose rate is determined by a citizen meeting.

Among the advantages of FOCJs, according to Frey:

  • Because they specialize in a few functions, their members can monitor them more effectively than traditional federal units.
  • Since their members can switch to other jurisdictions within the same territory, FOCJs can better learn their members' preferences.
  • Competing jurisdictions have stronger incentives to improve than traditional governments, and by example could help restrain the excesses of traditional nation-states.

Source: Bruno S. Frey, "A Utopia? Government without Territorial Monopoly," Independent Review, Summer 2001, Independent Institute, 100 Swan Way, Oakland, Calif. 94621, (510) 632-1366.


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