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Subventions et politique de concurrence

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  • Patrick Legros

Abstract

Transfers to firms and regions are made both at the level of member states (state aids) and at the level of the European Commission (Structural Funds). State aids can take different forms: direct (transfers, tax exemptions) or indirect (e.g., the definition of the reserved area in network industries). There are significant cross-country differences both in the magnitude and the type of instruments used for state aids. The European Commission acts as a de-facto regulator by using competition law to approve state aids. We analyze the rationale of this two step process by pointing out the benefits of decentralizing redistributive decisions to the member states and the costs linked to reduced coordination (the use of structural funds, viewed as a complement to state aids, reduces some of these costs). We then point out that in a second best world objectives of redistribution are not incompatible with competition but that their relationship is less straightforward than with perfect markets; this has consequences for the rationale of having block exemptions, and for the effects of structural funds.

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Bibliographic Info

Article provided by De Boeck Université in its journal Reflets et perspectives de la vie économique.

Volume (Year): XLIII (2004)
Issue (Month): 1 ()
Pages: 11-24

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Handle: RePEc:cai:rpvedb:rpve_431_0011

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Web page: http://www.cairn.info/revue-reflets-et-perspectives-de-la-vie-economique.htm

Related research

Keywords: State aids; structural funds; second best; redistribution; competition law;

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References

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  1. Devereux, Michael P & Griffith, Rachel, 2002. "Evaluating Tax Policy for Location Decisions," CEPR Discussion Papers 3247, C.E.P.R. Discussion Papers.
  2. Dixit, Avinash K & Kyle, Albert S, 1985. "The Use of Protection and Subsidies for Entry Promotion and Deterrence," American Economic Review, American Economic Association, vol. 75(1), pages 139-52, March.
  3. Philippe Aghion & Jean Tirole, 1994. "Formal and Real Authority in Organizations," Working papers 95-8, Massachusetts Institute of Technology (MIT), Department of Economics.
  4. Dupont, Vincent & Martin, Philippe, 2003. "Subsidies to Poor Regions and Inequalities: Some Unpleasant Arithmetic," CEPR Discussion Papers 4107, C.E.P.R. Discussion Papers.
  5. Micael Castanheira De Moura & Georges Siotis, 2004. "Regions in Europe: Sisyphus or Phoenix?," ULB Institutional Repository 2013/10023, ULB -- Universite Libre de Bruxelles.
  6. Mathias Dewatripont & Françoise Thys-Clément & Luc Wilkin, 2001. "The strategic analysis of universities: microeconomic and management perspectives," ULB Institutional Repository 2013/9553, ULB -- Universite Libre de Bruxelles.
  7. Patrick Legros & Andrew Newman, 2001. "Segregation, efficiency and equity," ULB Institutional Repository 2013/7060, ULB -- Universite Libre de Bruxelles.
  8. Collie, David R., 2000. "State aid in the European Union: The prohibition of subsidies in an integrated market," International Journal of Industrial Organization, Elsevier, vol. 18(6), pages 867-884, August.
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