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Managing the Dilemma of Discretion: The European Commission and the Development of EU State Aid Policy

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  • Thomas Doleys

Abstract

This article examines the role played by the European Commission in the development of the European Union’s (EU) state aid policy. It does so through the prism of a “dilemma” that exists at the nexus of the Commission’s delegated authority to administer EU treaty state aid provisions, the discretion conferred on Commission authorities by the imprecise language in which those provisions are written, and the political and institutional control mechanisms EU member governments use to influence the exercise of that discretion. Examining Commission efforts to manage this dilemma over the history of the EU, we provide evidence to illustrate how the Commission’s approach adapted to shifting economic and political conditions. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Thomas Doleys, 2013. "Managing the Dilemma of Discretion: The European Commission and the Development of EU State Aid Policy," Journal of Industry, Competition and Trade, Springer, vol. 13(1), pages 23-38, March.
    • Handle: RePEc:kap:jincot:v:13:y:2013:i:1:p:23-38
    DOI: 10.1007/s10842-012-0140-y
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    1. Paul R. Milgrom & Douglass C. North & Barry R. Weingast*, 1990. "The Role Of Institutions In The Revival Of Trade: The Law Merchant, Private Judges, And The Champagne Fairs," Economics and Politics, Wiley Blackwell, vol. 2(1), pages 1-23, March.
    2. Mitchell P. Smith, 1998. "Autonomy by the Rules: The European Commission and the Development of State Aid Policy," Journal of Common Market Studies, Wiley Blackwell, vol. 36(1), pages 55-78, March.
    3. Maskin, Eric, 2002. "On indescribable contingencies and incomplete contracts," European Economic Review, Elsevier, vol. 46(4-5), pages 725-733, May.
    4. Pollack, Mark A., 2003. "The Engines of European Integration: Delegation, Agency, and Agenda Setting in the EU," OUP Catalogue, Oxford University Press, number 9780199251179.
    5. McCubbins, Mathew D & Noll, Roger G & Weingast, Barry R, 1987. "Administrative Procedures as Instruments of Political Control," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 3(2), pages 243-277, Fall.
    6. Nikolaos Zahariadis, 2010. "State Aid and Partisan Government in the European Union," Social Science Quarterly, Southwestern Social Science Association, vol. 91(2), pages 436-454, June.
    7. Moe, Terry M, 1990. "Political Institutions: The Neglected Side of the Story," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 6(0), pages 213-253.
    8. Frederic Jenny, 2006. "The State Aid Action Plan: A Bold Move or a Timid Step in the Right Direction?," CPI Journal, Competition Policy International, vol. 2.
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    Cited by:

    1. 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.
    2. Roman Stöllinger & Mario Holzner, 2017. "State Aid and Export Competitiveness in the EU," Journal of Industry, Competition and Trade, Springer, vol. 17(2), pages 203-236, June.
    3. Michael Landesmann & Roman Stöllinger, 2020. "The European Union’s Industrial Policy: What are the Main Challenges?," wiiw Policy Notes 36, The Vienna Institute for International Economic Studies, wiiw.
    4. Ruud van Druenen & Pieter Zwaan & Ellen Mastenbroek, 2022. "Getting State Aid Approved by the European Commission: Explaining the Duration of Preliminary Investigations in the State Aid Notification Procedure," Journal of Common Market Studies, Wiley Blackwell, vol. 60(3), pages 545-561, May.

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    More about this item

    Keywords

    European Commission; state aid; competition policy; incomplete contracts; delegation; D86; N44; O25;
    All these keywords.

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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