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The New Political Economy of EU State Aid Policy

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  • Hussein Kassim

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  • Bruce Lyons

Abstract

Despite its importance and singularity, the EU’s state aid policy has attracted less scholarly attention than other elements of EU competition policy. Introducing the themes addressed by the special issue, this article briefly reviews the development of EU policy and highlights why the control of state aid matters. The Commission’s response to the current economic crisis notably in banking and the car industry is a key concern, but the interests of the special issue go far beyond. They include: the role of the European Commission in the development of EU policy, the politics of state aid, and a clash between models of capitalism. The special issue also examines the impact of EU policy. It investigates how EU state aid decisions affect not only industrial policy at the national level (and therefore at the EU level), but the welfare state and territorial relations within federal member states, the external implications of EU action and the strategies pursued by the Commission to limit any potential disadvantage to European firms, and the conflict between the EU’s expanding legal order and national. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Hussein Kassim & Bruce Lyons, 2013. "The New Political Economy of EU State Aid Policy," Journal of Industry, Competition and Trade, Springer, vol. 13(1), pages 1-21, March.
  • Handle: RePEc:kap:jincot:v:13:y:2013:i:1:p:1-21
    DOI: 10.1007/s10842-012-0142-9
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    File URL: http://hdl.handle.net/10.1007/s10842-012-0142-9
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    References listed on IDEAS

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    1. Mathias Dewatripont & Paul Seabright, 2006. ""Wasteful" Public Spending and State Aid Control," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 513-522, 04-05.
    2. Timothy Besley & Paul Seabright, 1999. "The effects and policy implications of state aids to industry: an economic analysis," Economic Policy, CEPR;CES;MSH, vol. 14(28), pages 13-53, April.
    3. Niels, Gunnar & Jenkins, Helen & Kavanagh, James, 2011. "Economics for Competition Lawyers," OUP Catalogue, Oxford University Press, number 9780199588510.
    4. Rubini, Luca, 2009. "The Definition of Subsidy and State Aid: WTO and EC Law in Comparative Perspective," OUP Catalogue, Oxford University Press, number 9780199533398.
    5. Marcella Nicolini & Carlo Scarpa & Paola Valbonesi, 2013. "Aiding Car Producers in the EU: Money in Search of a Strategy," Journal of Industry, Competition and Trade, Springer, vol. 13(1), pages 67-87, March.
    6. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
    7. 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;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 36(6), pages 289-297, November.
    8. Collie, David R., 1998. "Trade policy under Bertrand duopoly with integrated markets: the pure strategy equilibrium," Economics Letters, Elsevier, vol. 60(2), pages 179-183, August.
    9. Fiona Wishlade, 2008. "Competition and Cohesion - Coherence or Conflict? European Union Regional State Aid Reform Post-2006," Regional Studies, Taylor & Francis Journals, vol. 42(5), pages 753-765.
    10. Smith, Mitchell P., 2001. "How Adaptable is the European Commission? The Case of State Aid Regulation," Journal of Public Policy, Cambridge University Press, vol. 21(03), pages 219-238, June.
    11. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147.
    12. Crouch, Colin, 2005. "Capitalist Diversity and Change: Recombinant Governance and Institutional Entrepreneurs," OUP Catalogue, Oxford University Press, number 9780199286652.
    13. David Collie, 2002. "Prohibiting State Aid in an Integrated Market: Cournot and Bertrand Oligopolies with Differentiated Products," Journal of Industry, Competition and Trade, Springer, vol. 2(3), pages 215-231, September.
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    Cited by:

    1. Heim, Sven & Hüschelrath, Kai & Schmidt-Dengler, Philipp & Strazzeri, Maurizio, 2017. "The impact of state aid on the survival and financial viability of aided firms," European Economic Review, Elsevier, vol. 100(C), pages 193-214.
    2. repec:kap:jincot:v:17:y:2017:i:2:d:10.1007_s10842-016-0230-3 is not listed on IDEAS
    3. Çiğdem Börke Tunali & Jan Fidrmuc, 2015. "State Aid Policy in the European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 53(5), pages 1143-1162, September.

    More about this item

    Keywords

    state aid; European Union; European Commission; market regulation; Europeanization; D73; F53; H83; K20; L32; L38; L44; L88; L98; O52;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • L88 - Industrial Organization - - Industry Studies: Services - - - Government Policy
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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