The significance of yardstick competition among governments is now confirmed with regard to fiscal variables. This is an important result but the significance of the mechanism must also be sought in a context broader than that of fiscal federalism and without limitation to relations and...

This is a version, slightly corrected in 2010 with regard to form, of a working paper produced in 1968. Its subject is the problem of the realism of assumptions in economics. It offers an interpretation of Milton Friedman's famous essay of 1953 in which, contrary to most discussions, Friedman's...