The origins of regional integration: Untangling the effect of trade on judicial cooperation

Arthur Dyevre and Nicolas Lampach

International Review of Law and Economics, 2018, vol. 56, issue C, 122-133

Abstract: Several empirical studies have cast doubt on the causal nexus between economic and legal integration posited by economic Neo-functionalism in the EU context. Critics, we argue, have misinterpreted the original causal hypothesis. Economic Neo-functionalism specified a dynamic rather than time-invariant relationship between EU law use and transnational economic exchange. Yet both proponents and critics of economic Neo-functionalism have failed to adequately address the problem posed by endogeneity. Revisiting the neo-functionalist trade hypothesis, we attempt to untangle cause and effect using Bayesian instrumental variable estimation. Our research shows that intra-EU trade remains a positive and significant predictor of referral dynamics even when controlling for reverse causality and omitted variable bias. The impact of intra-EU trade on Article 267 proceedings has declined substantively over time. But this result is consistent with the neo-functionalist formulation of the trade hypothesis, which characterised intra-EU trade as an initial catalyst rather than as a constant driver of legal integration.

Keywords: Judicial behaviour; European Court of Justice; Legal Integration; Bayesian statistics (search for similar items in EconPapers)
JEL-codes: C11 C26 K10 K40 N34 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:irlaec:v:56:y:2018:i:c:p:122-133

DOI: 10.1016/j.irle.2018.08.003

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