A polity that shares the above characteristics is called a FOCUS. Several distinctive traits mark it out from conventional political and administrative units. First, direct democracy plays an important role as the prime channel for aggregation of individual preferences. Second, as each FOCUS collects its own taxes and fees, intergovernmental transfers do not exist. Third, the ideas behind the functional, overlapping, and competing jurisdictions turn traditional ideas about governance on its head. The idea of top-down governance, and of any amount of devolution as being based on delegation from central to lower level authorities, is replaced by an idea of governing from below. Political authority rests with the smallest units, the individual or the commune, and higher level institutions only come into play if and when these basic units decide to join a higher level jurisdiction to solve one or several collective problems. When they do so, they always retain the right to leave the jurisdiction in order to join a competing jurisdiction. Therefore, the larger units face the threat that some of their members might use their exit option.

Bruno Frey and Reiner Eichenberger, two Swiss economists, present their ideas in an engaging and straightforward way. In developing their ideas they draw upon a wide range of economic and political science literature. Especially they rely on a combination of modern political economy and of institutional economics. Step by step they start by developing their own idea to confront it with other authors that have dealt with similar problems on a theoretical or empirical basis. The structure has considerable advantages: the authors clearly demonstrate that although superficially radical, their ideas rest on rather solid analysis; equally important, the logic of exposition allows the authors to develop their own prescriptions in a modest tone, far removed from the fanfares and occasional arrogance accompanying much of the literature within the public choice tradition.

In contemporary Europe the Frey and Eichenberger prescription has particular relevance in two important respects. The one to which they owe most attention is the institutional problems of the EU and the prospects of the expansion of the EU to accept a large number of new member countries, in particular from Eastern Europe. First, they point out that the present day EU has moved far beyond the regulatory and institutional safeguards that are needed to make the basic four freedoms (mobility of goods, services, capital, and labour) operative on a European scale. What we have got instead is a centralized set of institutions with weak democratic controls, no provisions for direct democracy and, particularly damaging, a political process where bargaining is mainly focused on intergovernmental transfers. They rightly point out that European politics in this respect is democratically and economically deficient. But, equally important, European politics following this pattern makes the present EU ill prepared to admit a larger number of new member countries from Eastern Europe and the Mediterranean. Their point is that a EU reorganized along their FOCJ-lines would cure these basic evils while being simultaneously better prepared to accept new members.

The second area of application is local government reform. While Switzerland has kept the local government structures from last century mainly intact, other countries in North Western Europe have gone through consecutive reforms. In the Nordic countries this has led to the consolidation of local government keeping only a fraction of the original units. In Germany it has led to the creation a pseudo-federal structure and so called Zweckverbaende at the local level, but the federal authorities monopolize tax collection. This directs the efforts of the Laender towards the national centre. For their part, the local, functional associations remain bureaucratic entities removed from both democratic control and competitive pressures. In either case the consequences are not dissimilar to those in the EU. Democratic control is indirect and often weak, and politics is bargaining about intergovernmental transfers that tend to disclose the allocation of costs and benefits to the electorate. It is no relevant argument against Frey and Eichenberger that their prescription for the creation of functional, overlapping, and competing jurisdictions is unable to operate. In their book they provide strong theoretical support for it viability, and they also demonstrate that real world institutions sometimes and to some extent share traits with their favourite FOCJs. Still, this does not meet the challenges involved if their programme for institutional reform is to be implemented in the form of real life institutions. So, it is difficult to see how it might be possible on a larger scale to move from conventional politics, given the strong vested interests against reform. Further, although they rightly point out that there are instances that realize their FOCJ principles, these instances are few and slightly exotic. They rather demonstrate the strength of traditional politics and the effectiveness of political actors in building institutions that protect special interests against the concerns behind the prescription. Regrettably, this latter perspective is mostly neglected in this otherwise well-argued and exciting analysis.