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State Aid and Partisan Government in the European Union

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  • Nikolaos Zahariadis

Abstract

Objective. I explore the effects of the partisan composition of government on industrial aid disbursement in 14 EU member states during the period 1992–2004. Methods. Predictions are tested controlling for the impact of international economic integration, the European Commission, domestic institutions, and macroeconomic conditions, using Prais‐Winsten coefficients with panel‐corrected standard errors, a random effects specification, and two‐stage least squares analysis with GLS random effects. Results. Contrary to conventional wisdom, right‐wing governments systematically give out more total and sectoral aid than left‐wing governments. Conclusion. Partisan politics tempers national enthusiasm for a single European market, exposing market reforms to a range of restraining domestic political issues.

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  • 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.
    • Handle: RePEc:bla:socsci:v:91:y:2010:i:2:p:436-454
    DOI: 10.1111/j.1540-6237.2010.00701.x
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    References listed on IDEAS

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    1. Nikolaos Zahariadis, 2005. "Policy Networks, Elections, and State Subsidies1," Review of Policy Research, Policy Studies Organization, vol. 22(2), pages 115-131, March.
    2. Foreman-Peck, James, 2006. "Industrial policy in Europe in the 20th century," EIB Papers 2/2006, European Investment Bank, Economics Department.
    3. Damien NEVEN, 1994. "The Political Economy of State Aids in the European Community : Some Econometric Evidence," Cahiers de Recherches Economiques du Département d'économie 9402, Université de Lausanne, Faculté des HEC, Département d’économie.
    4. Pushan Dutt & Devashish Mitra, 2016. "Political Ideology And Endogenous Trade Policy: An Empirical Investigation," World Scientific Book Chapters, in: The Political Economy of Trade Policy Theory, Evidence and Applications, chapter 5, pages 95-108, World Scientific Publishing Co. Pte. Ltd..
    5. Nikolaos Zahariadis, 2008. "State Subsidies in the Global Economy," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-61051-4, September.
    6. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, August.
    7. Alan Greenspan, 1998. "The Globalization of Finance," Cato Journal, Cato Journal, Cato Institute, vol. 17(3), pages 243-250, Winter.
    8. Elie Cohen, 2006. "Theoretical Foundations of Industrial Policy," Post-Print hal-03569433, HAL.
    9. Hibbs, Douglas Jr., 1992. "Partisan theory after fifteen years," European Journal of Political Economy, Elsevier, vol. 8(3), pages 361-373, October.
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    Cited by:

    1. 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.
    2. Marco Schito, 2021. "A Sectoral Approach to the Politics of State Aid in the European Union: an Analysis of the European Automotive Industry," Journal of Industry, Competition and Trade, Springer, vol. 21(1), pages 1-31, March.
    3. Brender, Agnes, 2018. "Government Ideology and Arms Exports," ILE Working Paper Series 21, University of Hamburg, Institute of Law and Economics.

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