In pursuit of selective liberalization: single market competition and its limits

Abstract

Within Europe's single market, private sector firms and business associations have sought to use EC competition rules to broaden competition in a range of public sector activities. Has capital's ability to pursue its interests at multiple levels within the European polity rendered national governments less able to define the timing, scope, and extent of economic liberalization? When and how can governments exercise political regulation of markets in the face of potent liberalizing forces? The article draws on evidence from three areas in which European Community institutions have articulated a clear logic of liberalization and private sector actors have appealed to single market competition rules to broaden market access. In each area - the procurement of goods and services by public authorities, the German banking sector, and postal services - private sector actors have succeeded in legal proceedings against government practices that restrict competition. However, the study finds that the parameters of liberalization ultimately depend on the selective incentives faced by private sector actors, the needs of domestic political institutions, and the intensity of government preferences.