The electoral foundations to noncompliance: addressing the puzzle of unlawful state aid in the European Union

Electoral institutions shape the incentives of governments to rely on distributive measures and to comply with international obligations because of the misalignment they may engender between the collective objectives of a government party and the individual objectives of its members in the legislature. We use this argument to explain the puzzle of unlawful state aid measures in the European Union (EU). Existing theories of EU compliance and implementation offer no convincing explanation to their persistence and patterns. Using data from 2000 to 2012, we find that an increase of district magnitude improves compliance. However, compliance decreases with higher magnitude where either party leaders have no control over the ballot rank or other electoral rules strengthen the incentives to search for a personal vote. We also provide evidence for the effects of electoral reforms on compliance. These results have implications for the broader literature on compliance with international regimes.