The Political Economy of European Integration: From Eurosclerosis to Eurocorporatism

The paper analyzes the evolution of coalitions over the early 1980's between business interests, government authorities in the larger industrialized countries and European institutions, notably the Commission, to promote policies aimed at securing a European comparative advantage in oligopolistic industries. Strategic gains for such firms are derived through the exploitation of economies of scale associated with expansion of production and reduction in average unit costs. The creation of the Internal Market is a prerequisite for the success of strategic trade policies since enlargement and integration of the home market gives firms a better base for oligopolistic competition internationally.