Exporting the Competition Policy Regime of the European Union: Success or Failure? Empirical Evidence for Acceding Countries

This paper studies the role of a country's EU membership status as an explanatory factor of regulatory quality. It argues that accession to the European Union improves the quality of regulation via the implementation of pro-competitive policies embedded in the Community Acquis. We assess this conjecture empirically for the (former) transition economies of Central and Eastern Europe, using Member States as well as developing and developed countries in Europe and Central Asia as a control group. The data used is a macro-economic panel of 48 countries covering six three-year periods between 1995 and 2012. We find that EU accession positively affected the quality of competition policies over and above an overall trend towards more market-oriented policies. The improvement in competition policies was not reversed in a single country of the sample, documenting the strong and sustainable transformative power of the EU. The findings are robust when controlling for endogeneity issues.