Can Supranational Infrastructure Regulation Compensate for National Institutional Weaknesses?

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June 2017
Emmanuelle Auriol, Antonio Estache, Liam Wren-Lewis
Toulouse School of Economics, European Center for Advanced Research in Economics and Statistics (ECARES), Paris School of Economics, GGKP Annual Conference
Auriol_Can supranational infrastructure regulation compensate for national institutional weaknesses

The authors study the impact of institutional characteristics of national and supranational regulation on the effectiveness of both types of regulation. The focus is on four institutional dimensions: regulatory capacity, accountability, commitment and fiscal capacity. It is shown how supranational regulation may reduce or worsen the challenges imposed by national institutional weaknesses. The analysis allows an identification of the costs and benefits of supranational regulation in very diversified institutional contexts. It also explains why some desirable changes from a global welfare perspective are unlikely to take place unless the losers of market integration are somehow compensated when national regulation is unlikely to do so as a result of some of its weaknesses.