Single market non-compliance: how relevant is the institutional setting?

Abstract

This paper investigates the role of the national institutional setting of EU member states in explaining Single Market non-compliance regarding non-tariff barriers in intra-EU trade. This study uses data on infringements to Single Market law on the free movement of goods. After controlling for country and industry-specific factors, we show that domestic institutional characteristics are relevant to explain non-compliance ensuing from trade protection measures implemented by EU countries. While government independence from political pressures and higher levels of representativeness and accountability reduce the propensity of member states to infringe upon Single Market laws on the free movement of goods, better regulatory quality increases the probability of non-compliance at industry level, suggesting that increases in competition generate protectionist measures that violate Single Market law.