One interpretation of the competence-performance distinction is that the grammar is a knowledge base consulted by the performance systems. We argue for an alternative interpretation, according to which the grammar and the performance systems are theories of the same object, but at different levels of description. This does not mean that the grammar is <i>reduced</i> to the performance systems. It is fundamental in explaining properties of these systems, as it expresses constraints on their design that generalize across specific computational procedures. We base our argument on considerations of computational effi ciency, a comparison with other information-processing systems and evolutionary considerations.