Building Markets? Neoliberalism, Competitive Federalism, and the Enduring Fragmentation of the American Market
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Date
2018-09-06
Authors
Springer, Benedikt
Journal Title
Journal ISSN
Volume Title
Publisher
University of Oregon
Abstract
Why do interstate barriers persist and proliferate in the US and go unnoticed by neoliberal policy-makers, while in other places, like the EU, they get systematically addressed? I challenge the common assumption that the EU is trying but failing to emulate the single market created in the US a long time ago. I show that in many ways, the EU has adopted more liberal rules for the exchange of goods and services across its members states than the US has in effect across its state borders.
Focused on the US, I assemble a wide-ranging set of evidence for this assertion ranging from federal policies pursued by conservative administrations since the 1980s and conservative think tank scholarship to an in-depth study of mobility and market barriers in the construction industry. To explain this, I develop two arguments. Firstly, I argue that American and European free-marketeers fundamentally conceptualize markets differently, with American conservatives seeing them as the natural product of government-non-intervention, and European officials seeing them has a deliberate creation of central authority. This leads to different market building strategies with differential effectiveness. At the same time, I argue that the fragmentation and decentralization of the party and interest representation system in the US incentivizes state by state and sector by sector thinking and dis-incentivizes political action—leaving the bigger picture, i.e. interstate barriers, unchanged. Especially interest groups struggle to articulate preferences for inter-state or cross-sectoral cooperation due to organizational incentives.
Applying a Bayesian process-tracing logic to mostly within-case and some cross-case evidence, I test conventional structural and institutional theories against my account. Tracing the lack of mobilization of conservative policy-makers and agenda-setters around federal market authority since the 1980s, and interviews with firms, regulators, and legislators about interstate barriers in the construction industry, clearly demonstrate how their imagination of markets prevents a single market building agenda top-down while institutional structures prevent it bottom-up.
This is a novel argument, speaking to broader debates about the socially-constructed nature of markets. Studying the US shows that interstate barriers and local protectionism flourish when no central authority deliberately creates ‘free markets’.
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Keywords
Construction industry, European Union, Federalism, Neoliberalism, Political economy, United States