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The Dynamics of Delegated Authority: The European Commission, Member States and European Union State Aid Policy

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Abstract:

This paper explores the political dynamics of state aid control in the European Union. Under the 1957 EEC Treaty, the European Commission was assigned both the responsibility and authority to enforce Community rules prohibiting state aids. And, yet, fifty years on, the conventional wisdom is that the Commission’s enforcement record in this area has been lacking. While the volume of aid appears on the decline, there remain many sectors that remain beyond the Commission’s effective control. The question animating this project is “why?” Why, when the Commission’s authority is both explicit and unambiguous, has it not achieve more? To answer this question, we draw on insights from agency theory. Specifically, we examine the “enforcement dilemma” faced by the Commission. On the one hand, governments delegated to the Commission the responsibility and authority to control state aids. On the other, governments made it clear that they were not eager for the Commission to exercise this mandate. For its part, the Commission was wary of the threat of re-contracting and, more ominously, the possibility of outright non-compliance. Caught in the horns of this dilemma, a pragmatic and politically-savvy Commission plied a middle course – pushing enforcement slowly, selectively, and only as far as governments would tolerate. The result has been an enforcement record that appears both checkered and uneven. But, contrary to those who assert that the Commission has performed poorly, we argue that the record should be regarded as a substantial achievement given the constraints within which it was forced to act. [250 words]

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Name: ISA's 49th ANNUAL CONVENTION, BRIDGING MULTIPLE DIVIDES
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Doleys, Thomas. "The Dynamics of Delegated Authority: The European Commission, Member States and European Union State Aid Policy" Paper presented at the annual meeting of the ISA's 49th ANNUAL CONVENTION, BRIDGING MULTIPLE DIVIDES, Hilton San Francisco, SAN FRANCISCO, CA, USA, Mar 26, 2008 <Not Available>. 2008-12-11 <http://www.allacademic.com/meta/p252919_index.html>

APA Citation:

Doleys, T. , 2008-03-26 "The Dynamics of Delegated Authority: The European Commission, Member States and European Union State Aid Policy" Paper presented at the annual meeting of the ISA's 49th ANNUAL CONVENTION, BRIDGING MULTIPLE DIVIDES, Hilton San Francisco, SAN FRANCISCO, CA, USA Online <APPLICATION/PDF>. 2008-12-11 from http://www.allacademic.com/meta/p252919_index.html

Publication Type: Conference Paper/Unpublished Manuscript
Abstract: This paper explores the political dynamics of state aid control in the European Union. Under the 1957 EEC Treaty, the European Commission was assigned both the responsibility and authority to enforce Community rules prohibiting state aids. And, yet, fifty years on, the conventional wisdom is that the Commission’s enforcement record in this area has been lacking. While the volume of aid appears on the decline, there remain many sectors that remain beyond the Commission’s effective control. The question animating this project is “why?” Why, when the Commission’s authority is both explicit and unambiguous, has it not achieve more? To answer this question, we draw on insights from agency theory. Specifically, we examine the “enforcement dilemma” faced by the Commission. On the one hand, governments delegated to the Commission the responsibility and authority to control state aids. On the other, governments made it clear that they were not eager for the Commission to exercise this mandate. For its part, the Commission was wary of the threat of re-contracting and, more ominously, the possibility of outright non-compliance. Caught in the horns of this dilemma, a pragmatic and politically-savvy Commission plied a middle course – pushing enforcement slowly, selectively, and only as far as governments would tolerate. The result has been an enforcement record that appears both checkered and uneven. But, contrary to those who assert that the Commission has performed poorly, we argue that the record should be regarded as a substantial achievement given the constraints within which it was forced to act. [250 words]

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Document Type: application/pdf
Page count: 27
Word count: 13085
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Molding Article 87: The European Commission and the Evolution of EU State Aid Policy Original Title: The Dynamics of Delegated Authority: The European Commission Member States and the Evolution of EU State Aid Policy Thomas J. Doleys Ph.D. Department of Political Science & International Affairs Maildrop 2205 Social Science Kennesaw State University 1000 Chastain Road Kennesaw Georgia 30144 Phone: (770) 423-6497 Fax: (770) 423-6312 Email: tdoleys@kennesaw.edu [Draft Manuscript - Please Do Not Cite Without Permission] Abstract: This article examines
between the SAAP and the revised policy guidelines for risk capital and aid to R&D&I see B. Tranholm Schwarz New Guidelines of State Aid Promoting Risk Capital Investments COMPETITION POLICY NEWSLETTER 3 (2006) and T. Kleiner and R. Repplinger-Hach The New Community Framework for State Aid for Research and Development and Innovation COMPETITION POLICY NEWSLETTER 1 (2007). 88 http://ec.europa.eu/comm/competition/state_aid/reform/reform.cfm (last visited on 18 December 2007). 89 See e.g. M. Smyrl When (and How) Do the Commission’s Preferences Matter? 79


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