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America and Europe differ with regard to what economics is understood to be, how it is practiced, and how professional academic economists behave. Specifically, 1) American (U.S. and Canadian) economists contribute by far the largest share of journal publications and are cited much more often than European economists, while (West-) European economists consider other aspects of their professional activities more relevant, in particular participating in local and national affairs; 2) economic research by Americans tends to focus on abstract issues defined within the profession itself and involves fads, while the activities of European economists (though not necessarily their research) are more concerned with practical issues and follow a more steady course: and 3) American academics are geared to postgraduate teaching, while in Europe they are mostly engaged in undergraduate teaching. These differences can be explained by the different market conditions faced by American and European economists: in America, the academic market is much larger, and the degree of government intervention is typically much smaller. This paper explores how this leads to different focuses for European and American economists. In addition, it asks whether the ongoing economic unification in Europe may not alter these patterns.

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In Europe and also in countries like Canada or South Africa, there are intensive debates if and how the structures of federalism ought to be strengthened. What can economics contribute to this discussion? The answer is unclear. On the one hand, the theoretical arguments in favour of and against federalism tend to counterbalance each other, and many empirical results are equivocal. On the other hand, demand for federalism in the post-constitutional political process might be small, as neither federalism itself, nor concomitant political competition is in the interest of the 'classe politique' and of most of the well-organized interest groups.This contribution takes up these arguments. The analysis of the underlying assumptions reveals the relative advantages of decentralized political structures, so far not correctly assessed in the economic literature. In part 11, the predominant arguments for and against federalism proposed in the literature are presented. In part 111, this literature will be critically discussed. Many of its arguments are built on highly restrictive assumptions. It often lacks a comparative perspective, and reactions in the post-constitutional political process are neglected. Some elements of a more comparative, process-oriented approach are presented in part IV, where the problem of endogenous centralization will be discussed. Several conclusions for a future European constitution will be drawn in part V. In the last section the arguments will be summarized.