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Does Accession to the European Union Foster Competition Policy? Country-level Evidence

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  • Michael Böheim

    (WIFO)

  • Klaus S. Friesenbichler

    (WIFO)

Abstract

This paper argues that the accession to the European Union improves the quality of competition policy via the implementation of pro-competitive policies, especially antitrust and competition policies, embedded in the Community Acquis. We assess this conjecture empirically for the (former) transition economies of Central and Eastern Europe, using member countries as well as developing and developed countries in Europe and Central Asia as a control group. The data used is a macro-economic panel of 48 countries covering six 3-year periods between 1995 and 2012. We find that EU accession positively affected the quality of competition policies over and above an overall trend towards more market oriented policies. The improvement in competition policy was not reversed in a single country of the sample. The findings are robust when controlling for endogeneity issues. We also document a slow-down in policy reform efforts in the aftermath of the crisis, challenging previous literature which expects a reform enhancing effect of crisis.

Suggested Citation

  • Michael Böheim & Klaus S. Friesenbichler, 2014. "Does Accession to the European Union Foster Competition Policy? Country-level Evidence," WIFO Working Papers 491, WIFO.
  • Handle: RePEc:wfo:wpaper:y:2014:i:491
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    File URL: https://www.wifo.ac.at/wwa/pubid/50883
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    References listed on IDEAS

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    1. Saul Estrin, 2002. "Competition and Corporate Governance in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 101-124, Winter.
    2. C. Umana Dajud, 2013. "Political Proximity and International Trade," Economics and Politics, Wiley Blackwell, vol. 25(3), pages 283-312, November.
    3. Klaus S. Friesenbichler, 2014. "EU Accession, Domestic Market Competition and Total Factor Productivity. Firm Level Evidence," WIFO Working Papers 492, WIFO.
    4. Heather Grabbe, 2014. "Six Lessons of Enlargement Ten Years On: The EU's Transformative Power in Retrospect and Prospect," Journal of Common Market Studies, Wiley Blackwell, vol. 52, pages 40-56, November.
    5. Jens Hölscher & Johannes Stephan, 2009. "Competition and Antitrust Policy in the Enlarged European Union: A Level Playing Field?," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 863-889, September.
    6. Klaus S. Friesenbichler & Michael Böheim & Daphne Channa Laster, 2014. "Market Competition in Transition Economies: A Literature Review," WIFO Working Papers 477, WIFO.
    7. Kim, Soo Yeon & Russett, Bruce, 1996. "The new politics of voting alignments in the United Nations General Assembly," International Organization, Cambridge University Press, vol. 50(04), pages 629-652, September.
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    Keywords

    competition policy; regulation; economic transition; Community Acquis; EU accession;

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