Federalism, Polycentrism, and More

I am still reading Complexity and the Art of Public Policy, and currently I am in the part where the authors tell the recent history of increasing-returns-to-scale and the big debate that took place during the Microsoft antitrust-case. It is fascinating stuff for the details, the people involved, and especially because of the history of important scientific ideas and how they penetrate economics. 

In the meantime I found this paper by Richard E. Wagner & Akira Yokoyama. What is really interesting about this paper is the typology of concepts presented, which helps clarify systems such as federalism, polycentrism, and others. The abstract

Federalism is commonly thought to be a pro-liberty system of government, in contrast to a unitary system. Within a unitary system, people face but a single government that taxes and regulates. Within federal systems, however, people face two or more governments that tax and regulate. In light of this multiplicity of independent governments, it is reasonable to wonder why federalism is widely thought to be favorable to liberty. Whether federalism is or is not favorable to liberty depends on some institutional features of a federalist system. In particular, we distinguish between two systems of federalist governance: competitive federalism and cartel federalism. Where competitive federalism entails competition among all units of government, cartel federalism entails collusion among governments. Competitive federalism has a polycentric structure where no single government dominates the other governments. In contrast, cartel federalism has a monocentric structure that is dominated by the cartelizing unit of government.