State Aid and Partisan Government in the European Union*

Nikolaos Zahariadis

Social Science Quarterly, 2010, vol. 91, issue 2, 436-454

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.

Date: 2010
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