Abstract
While European integration and the four freedoms related to the movement of goods, services, labor, and capital strengthened economic competition, competition among governments has been rather muted. Thus, a future European constitution should unlash political competition by guaranteeing a fifth freedom that allows the evolution of functional, overlapping, and competing jurisdictions (FOCJ). These governmental units combine various welfare-enhancing theoretical concepts of the economic theory of federalism. FOCJ have existed (at least partially) in European history, and there are illustrative examples such as the U.S. special districts and Swiss functional, democratic, and overlapping communities.
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