Winners and Losers in EU State Aid Policy

Distorted promotion of undistorted competition? Commission decisions after formal investigations in the EU state aid regime

“…Within a preference-based approach, a member state's decision to comply depends on its cost-benefit analysis of its consequences (Downs et al, 1996). A first relevant factor to consider is therefore the preferences of a government on state intervention (Finke, 2020;Zahariadis, 2013). We expect that governments that are more prone to intervene in the economy also consider the benefits of granting state aids as higher and will also be more willing to challenge a (possible) negative decision by the Commission.…”

“…To measure the intervention position of a government, we followed Finke (2020, p. 13) by taking the average of positions on state intervention in the economy of the parties in office relative to their seat share. Earlier studies on the relationship between government preferences and state aid spending considered partisanship as a relevant indicator, but Zahariadis (2013) shows that findings of the relationship between partisanship and state aid spending have been inconclusive. Finke's measuring of this variable builds upon Lowe's et al (2011) scaling of party positions in manifestos on the basis of the logarithm of odds ratios.…”

“…Firstly, it strengthens our understanding of the day-to-day functioning of the EU state aid regime, thus adding insights to the political science literature on state aid. Most political science studies on the EU state aid regime focus on its overall historical development (Cini, 2001;Cini & McGowan, 2009;Doleys, 2013) or on the effects of EU rules on trends in state aid spending (Franchino & Mainenti, 2013;Zahariadis, 2013).…”

Getting State Aid Approved by the European Commission: Explaining the Duration of Preliminary Investigations in the State Aid Notification Procedure*

“…From a preference‐based perspective, it is expected that the Commission will also make a cost–benefit analysis when deciding to grant leeway to a member state or stick to its own interpretation. Likely, the Commission will take into account that its authority depends on the support from individual member states (Abbott et al ., 2000) and that it needs this support in future policy‐making initiatives and for the EU's legal system in general (Zahariadis, 2013, p. 148; Jönsson and Tallberg, 1998, p. 392). As the Commission feels more dependent on the support from more powerful member states, it is expected that it will be more willing to grant leeway or to accept an interpretation of state aid rules that is favourable to the aid measures of a more powerful member state.…”

At loggerheads over state aid: Why the Commission rejects aid and governments comply

“…In fact, the political-economic literature discusses whether left or right governments are more prone to pay out state aid. Neven (1994) and Zahariadis (2013) offer an excellent overview of previous, inconclusive results and their relation to other areas of public expenditure. In his own research, Zahariadis (2013) finds that ‘contrary to conventional wisdom, right-wing governments systematically give out more total and sectoral aid than left-wing governments’ (Zahariadis, 2013: 436).…”