ABSTRACT
This chapter discusses the process of globalization and its consequences for political authority, namely the national welfare state, as conceptualized by Philip G. Cerny. It provides the establishment of macro-regional integration schemes as a response to the alleged deregulation at the national level, as well as the role of the business community in bringing them about. The chapter examines the exact conditions that facilitate the supranationalization of particular public sector functions. It outlines the principal argumentation of Fiscal Federalism. The economic logic of Fiscal Federalism's normative propositions can be applied to the environment of a globalized economy. The chapter presents the economic subdiscipline of Fiscal Federalism that provides the analytical means to do so, as well as to extrapolate its logic and formulates testable hypotheses for conditions of economic globalization that also include redistributive policies. The process of globalization is disintegrating the existing national political structures from the economic-organizational optima.
