Is the EU Competition Framework a Model for International FDI Regimes?

Abstract

The prior discussion of institutional policy choices for FDI governance led to the conclusion that reaching agreement on any of these options — even the most simple ones such as creating a more transparent and accountable system of subsidy controls — will not take place unless there is a sufficient balance of domestic interests and power capabilities as well as an appropriate regime design that ensures mutual trust and discourages opportunistic behavior. In that context, the EU framework does not only present itself as an effective mechanism of bounded FDI competition661 but also provides important lessons on the political-economic process for reaching consensus on the choice of FDI governance model. The final section will thus review the most important factors that contributed to the process and its outcomes, both in terms of overall guiding-principles of the institutional environment (“rules of the game”) as well as the more specific governance approach (“play of the game”) that informed the EU’s course. In conclusion, recommendations will be given as to whether or not the EU approach can serve as a model for the establishment of other FDI regimes.