The Political Economy of State Aids in the European Community : Some Econometric Evidence
AbstractThis paper analyses the pattern of state aids to the manufacturing sector in ten EC countries for the period 1981--90. It focuses on determinants suggested by the political economy of state aids. We estimate a regression model where the intensity of state aids is accounted for by the weakness of government, their ideological orientation, the concentration of industry, and the timing of elections. The evidence indicates that the fractionalization of political parties is associated with higher state aids. We also find support for the view that state aids are higher under right-wing governments and when firms' interests are highly concentrated. This is consistent with a partisan view of government in which firms represent an important constituency for right-wing coalitions. By contrast, the timing of elections does not seem to matter. Finally, the paper observes significant fixed country effects. We gather evidence on the transparency of procedures used to allocate and control state aids and suggest that these fixed effects could be associated with lax procedures which enhance the scope for capture.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Université de Lausanne, Faculté des HEC, DEEP in its series Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) with number 9402.
Length: 15 pages
Date of creation: Mar 1994
Date of revision:
Publication status: Published in Does Europe have an Industrial Policy ?, D. Neven and L.-H. Röller (eds), Sigma, 1999
Contact details of provider:
Postal: Université de Lausanne, Faculté des HEC, DEEP, Internef, CH-1015 Lausanne
Phone: ++41 21 692.33.64
Fax: ++41 21 692.33.05
Web page: http://www.hec.unil.ch/deep/publications/cahiers/series
More information through EDIRC
Other versions of this item:
- Neven, Damien J, 1994. "The Political Economy of State Aids in the European Community: Some Econometric Evidence," CEPR Discussion Papers 945, C.E.P.R. Discussion Papers.
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- José J. Sempere Monerris & Rafael Moner Colonques & Amparo Urbano Salvador, 1999. "Strategic policy and international economic integration," Working Papers. Serie AD 1999-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Laffont, Jean-Jacques, 1996. "Industrial policy and politics," International Journal of Industrial Organization, Elsevier, vol. 14(1), pages 1-27.
- Ioannis Ganoulis & Reiner Martin, 2001. "State aid control in the European Union— Rationale, stylised facts and determining factors," Intereconomics: Review of European Economic Policy, Springer, vol. 36(6), pages 289-297, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Claudine Delapierre Saudan).
If references are entirely missing, you can add them using this form.