Essays in the political economy of competition aligned interests, institutions, and market power in Europe

Crescioli, Tommaso (2024) Essays in the political economy of competition aligned interests, institutions, and market power in Europe. PhD thesis, London School of Economics and Political Science.

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Abstract

European competition policy has undergone a significant transformation over the last forty years. Economic barriers, public monopolies, and discrimination against foreign firms, once widespread practices, have given way to a European competition legislation that experts consider the most advanced in the world. This ‘Great Reversal’ (Philippon 2019) is highly relevant for political economists as it affects the balance of power across two critical dimensions: governments versus the European authorities and states versus markets. Governments transferred considerable powers to the EU over policies that were used to promote national interests. This change in the policy paradigm exposed large sectors of the economy and “National Champions,” once jealously shielded, to international economic forces. This puzzling transformation can be broken down into a number of questions. Who are the primary actors driving this change in the policy paradigm? Have these reforms effectively enhanced competition? Moreover, does the adoption and impact of this competition policy package vary at the country and sectoral level? This thesis proposes a political-economic framework based on aligned interests between European and national actors and the interplay of supranational and domestic institutions. I argue that this new policy paradigm was supported by a winning coalition based on the convergence of interests of the European Commission, liberal governments, and competitive firms. The European Commission’s promotion of market integration aligns with the ambition of competitive firms that want to expand into other European economies and the agenda of more economically liberal governments. The interplay between supranational and domestic institutions, in turn, shapes the way these interests are represented in national legislation, contributing to policy variation across countries. This interaction, however, also plays a crucial role in determining different economic outcomes as it alters how firms compete. In this respect, the thesis reveals that competition has evolved very unevenly across countries and industries. While some sectors have shown a general increase in competition, others have witnessed a rise in monopsony power, concealed by improving competition in the product market.

Item Type:	Thesis (PhD)
Additional Information:	© 2024 Tommaso Crescioli
Library of Congress subject classification:	H Social Sciences > HC Economic History and Conditions J Political Science > JN Political institutions (Europe)
Sets:	Departments > European Institute
Supervisor:	Martelli, Angelo and Schelkle, Waltraud
URI:	http://etheses.lse.ac.uk/id/eprint/4664

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