Single Markets : Economic Integration in Europe and the United States

This ambitious volume provides a trenchant and timely analysis of the creation of a single market in both the EU and the US. Comparing the experience of the US during the nineteenth century and the single market of the EU in the twentieth century, __Single Markets__ demonstrates how the political economy of single market formation has followed remarkably similar trajectories. Both cases show evidence of interplay between different levels of government in determining distributive outcomes; evolution of a legal framework for the market; and development of new regulatory strategies to deal with changing economic realities. The book illustrates the process of market consolidation through a detailed comparison of the so-called four freedoms: the removal of border controls; and the largely unrestricted transfer of goods, services, and capital across different jurisdictions. In both cases, establishing one market, one currency, and a more unified banking and financial system transformed largely autonomous or sovereign constituent units into a more unified economic entity. __Single Markets__ also sheds light on critically important questions for both comparativists and international relations scholars regarding the nature of territorial governance and the construction of state interests. The book's interdisciplinary approach to focusing on crucial political and economic developments on both sides of the Atlantic will be of interest to scholars in political science, public policy, law, and history. Cover 1 Single Markets: Economic Integration in Europe and the United States 4 Copyright 5 Preface 6 Contents 10 List of Tables 12 List of Abbreviations 14 1: States, Democracies, and Single Markets 16 Introduction 16 State-Building and Market Integration: APD meets the EU 23 Modes of Governance and Differentiated Integration 28 Methodology 32 Case Selection 34 Overview of the Book 36 Notes 38 2: Foundational Politics 40 Constitutional and Legal Foundations of Market Integration 42 The American Founding Document 43 The European Founding Document 44 Economic Governance, Political Development, and Democratic Pressure 47 Intergovernmental Relations 51 War and Reconstruction 56 Sectionalism and Civil War 58 Nationalism, Reconstruction, and the Cold War 59 Enlargement and Expansion 61 US Territorial Growth 62 Membership and Association 64 Conclusion 67 Notes 68 3: Market Dynamics and Integration: The Intersection of Law, Politics, and Markets 70 Law and Markets: Judicial Activism and Economic Order 73 Regulation and Interests: Mobilization and Business Pressure 76 Regulation and Markets: From the Developmental State to the Regulatory State 80 Regulation and Compensation: Unequal Development and Distributive Politics 85 Conclusion 90 Note 92 4: Interstate Commerce and Free Movement of Goods 93 American Interregional Trade 95 Barriers to Trade in the United States 99 Antebellum Developments 100 Integration through Law 102 Postbellum Period 105 Lessons from the US for the EU 108 Europe 109 Interregional Trade Flows 111 Barriers to Trade in the EU 112 The Early Formative Period: The 1960s to the 1970s 114 The 1980s: Renewed Momentum of the Single Market Program 119 Integration through Law 122 The Effects of Integration on Business Strategy and Market Structures 125 Market Matters: The Politics of Commerce 127 Conclusion 128 Notes 130 5: Capital Flows and Financial Markets 133 American Interregional Finances 137 Barriers to Trade 139 The Antebellum Period 139 Integration through Law: Developments in the Antebellum Period 144 The Postbellum Period 146 Lessons for Europe from the United States 148 Europe 149 Interregional Fiscal Flows 150 Barriers to Trade 154 The Early Formative Period: The 1960s to the 1970s 155 The 1980s: The Renewed Momentum of the Single Market Program 158 Integration through Law: Capital Markets and Judicial Action 166 The Effects of Integration on Banking Behavior and Market Structure in US and EU 167 Market Matters: The Politics of Capital Movements 169 Conclusion 170 Notes 172 6: Free Movement of Services: Transportation and Economic Services 174 American Interregional Development 178 Barriers to Trade 180 The Antebellum Period 181 The Postbellum Period 184 Integration through Law 187 Lessons for Europe from the US 189 The European Experience 190 Interregional Trade Flows and Barriers to Trade 193 The Early Formative Period: The 1960s to the 1970s 195 The Single Market and Beyond: Liberalization and Contestation in the 1980s 197 Integration through Law 202 Effects of Integration on Corporate Behavior and Market Structures in US and EU 204 Conclusion 205 Notes 208 7: Labor Mobility and the Free Movement of Professionals 210 American Professions and Democracy 214 Barriers to Trade 215 The Antebellum Period 215 Postbellum Period 218 Integration through Law 220 Lessons for Europe from the United States 221 The European Experience 224 Interregional Flows and National Controls 226 Barriers to Trade 227 The Early Formative Period: The 1960s to the 1970s 228 Single Market: Promoting Competition through Liberalization and Reciprocity 232 Integration through Law 235 Impacts of Integration on Professional Mobility and Services in US and EU 237 Conclusion 239 Notes 241 8: Conclusion 244 Markets, Politics, and State-Building 246 Summary of Cases 247 Economic and Welfare Goals 248 Law and Markets 249 Regulation and Governance 250 From Uncommon Markets to Dissimilar Markets 254 Legitimacy and Market Integration 258 Globalization and Integration 260 Political Mobilization and Representation 261 Enforcement and Compliance 263 Distributional Preferences and Welfare Gains 264 Notes 266 Appendix 268 Appendix 1 General Treaty of Rome Provisions and their Subsequent Treaty of Lisbon Counterparts 268 Article 2 The Treaty of Rome, officially the Treaty establishing the European Economic Community (TEEC) 268 Article 3 (TEEC) 268 Article 3 Treaty on European Union (TEU) 269 Appendix 2 Changes in the Treaty of Lisbon (TFEU) and Renumbering of Internal Market Policies: Comparison with Existing Treaty on European Community (TEC) and Treaty on European Union (TEU) 269 Title I: Internal Market 269 Title II: Free Movement of Goods 270 Chapter 3: Prohibition of Quantitative Restrictions between Member States 270 Title IV: Free Movement of Persons, Services, and Capital 270 Chapter1: Workers 270 Chapter2: Rights of Establishment 270 Chapter3: Services 270 Chapter4: Capital and Payments 271 Title VI: Transport 271 Bibliography 272 EU Legislation 319 Court Cases 320 US Supreme Court 320 EU Court Cases 321 Index 324 This timely book provides in-depth analytical comparison of the nineteenth century evolution of the American single market with corresponding political, economic, and social developments in post-WWII European efforts to create a single European market. Building the regulatory framework needed for successful adoption of an integrated single market across diverse political units represents one of the most important issues in comparative political economy. What accounts for the political success or failure in creating integrated markets in their respective territories? When social discontent threatens market integration with populist backlash, what must be done to create political support and greater legitimacy? Single Markets focuses on the creation of integrated economies, in which the United States and European Union experienced sharply contested ideas about the operation of their respective markets, conflict over the allocation of institutional authority, and pressure from competing political, economic, and social forces over the role and consequences of increased competition. Drawing upon four case studies, the book highlights the contestation surrounding the US and EUs efforts to create common currencies, expand their borders and territories, and deal with the pressures of populist parties, regional interests and varied fiscal and economic challenges. Theoretically, the book draws on work in European integration and American Political Development (APD) to illustrate that the consolidation of markets in the US and EU took place in conjunction with the expansion of state regulatory power and pressure for democratic reform. Single Markets situates the consolidation of single markets in the US and EU in a broader comparative context that draws on research in economics, public administration, political science, law, and history.