Jean Monnet Center at NYU School of Law


5. Conclusions

In this chapter we have reviewed part of the free movement jurisprudence of the Court through the lens of a law and economics analysis, with a view to considering how far it discloses a coherent approach to the question of regulatory competition. Viewing the Court's rulings through an ex post set of analytical classifications might strike some as unusual. The justification for doing so is two fold. Firstly, while regulatory competition may not be the aim of the Court's interventions, it is certainly one of its most significant effects. Secondly, law and economics analysis of this kind is widely used to understand the workings of market integration rules in other federal or transnational jurisdictions, in particular the United States, where argument has raged over the benefits of the market for legal rules in areas such as corporations law. When these techniques are applied to the free movement case law of the Court, we see a surprising lack of consistency. The Court veers between an approach, in cases such as Centros, which combines a strong substantive market access test, to one, in cases such as Keck, which would limit the Court's intervention to situations in which formal access is barred or there is clear evidence of discrimination against non home-state nationals. From the point of view of regulatory competition, it is beside the point to argue that one case arises under the law governing establishment and the other is concerned with goods, since the effects are largely the same in both cases. At the very least, we would expect the Court to offer some explanation of the divergence in approach in this and other cases, but none has been forthcoming.

In addition to inconsistency, the Court's approach risks the worst of both worlds: a race to uniformity, which is also a race to the bottom in the sense of leading to the degradation of standards of market regulation. Because the market access principle is not clearly articulated as such, the importance of this process for the debate over the substance of economic and social policy in the EC is being obscured. The case for a more explicit consideration of these questions is further reinforced by the emergence of clear alternatives to court-led deregulation, in the form of reflexive harmonisation and novel regulatory techniques such as the open method of coordination and, as far as the Court itself is concerned, experimentalism. The need for all parties, including the Court, to articulate more clearly what they are doing and why107 can only serve to strengthen regulatory competition while at the same time going some way to preserving national autonomy.

107 See also the emphasis on dialogue and participation in the Commission's Governance White Paper COM(2001)428, esp. 15: "Civil society increasingly sees Europe as offering a good platform to change policy orientations and society. This offers a real potential to broaden the debate on Europe's role. It is a chance to get citizens more actively involved in achieving the Union's objectives and to offer them a structured channel for feedback, criticism and protest."




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