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Coordination of industrial policy in the European Union

Author

Listed:
  • Baldwin, Richard

    () (Graduate Institute of International Studies, Geneva)

  • Martin, Philippe

    () (University of Paris-I, Pantheon-Sorbonne)

Abstract

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.

Suggested Citation

  • Baldwin, Richard & Martin, Philippe, 2006. "Coordination of industrial policy in the European Union," EIB Papers 6/2006, European Investment Bank, Economics Department.
  • Handle: RePEc:ris:eibpap:2006_006
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    References listed on IDEAS

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    Cited by:

    1. Duch, Néstor & Montolio, Daniel & Mediavilla , Mauro, 2009. "Evaluating the impact of public subsidies on a firm’s performance: a two-stage quasi-experimental approach," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 16, pages 143-165.

    More about this item

    Keywords

    industrial policy; goal conflicts; instrument dependence;

    JEL classification:

    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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