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Coordination of industrial policy in the European Union

  • Baldwin, Richard

    ()

    (Graduate Institute of International Studies, Geneva)

  • Martin, Philippe

    ()

    (University of Paris-I, Pantheon-Sorbonne)

Spillovers from national industrial policies can cause helpful or harmful competition among policy makers and helpful or harmful interactions among the targeted industries. As a result, it is not in general possible to say whether industrial policy coordination is good or bad. However, reaching agreement at the EU level on any type of policy - trade policy, monetary policy or industrial policy - is costly in terms of time, information, and political goodwill. The contrast between the vagueness of the benefits of coordination and the surety of the decision-making costs suggests that the EU has no need to set up a new institutional structure for coordinating industrial policy. In the few cases where the merits of coordination are obvious, such as public spending on R&D, they will be obvious to all and ad hoc cooperation will work.

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Paper provided by European Investment Bank, Economics Department in its series EIB Papers with number 6/2006.

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Length: 24 pages
Date of creation: 26 Jun 2006
Date of revision:
Handle: RePEc:ris:eibpap:2006_006
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