The impact of fiscal federalism on the size of governments has been the subject of an intense (and extended) debate for more than three decades, mainly under the influence of The Power To Tax by Geoffrey Brennan -James Buchanan [1980] where federalism was proposed as a component of a fiscal constitution. According to the Brennan-Buchanan hypothesis, intergovernmental competition (if made effective through a number of conditions, such as free mobility of goods and persons, decentralization of taxes and expenditures) should indirectly ‘constrain’ the power to tax of the government (i.e., in Hobbesian terms, the Leviathan) just as the direct limits of a fiscal constitution. However, more than thirty years later, the numerous empirical investigations, though quite sophisticated, have been unable, at least apparently, to prove (or to disprove) irrefutably Brennan-Buchanan's hypothesis about the effects of federalism, so that quite often the authors of these inquiries recognized that their results are ‘mixed’. This paper will show that those empirical investigations did not take into consideration the basic conditions on which die approach of Brennan and Buchanan was based and, in particular, die new model of federalism proposed by Brennan and Buchanan, compared with the orthodox (‘conventional’, according to B-B) model of federalism. In fact, all these investigations made use of data on existing (orthodox) models of fiscal federalism, without taking account of the innovative conditions required by Brennan and Buchanan for establishing a new model of federalism capable to contract the public sector.