Professor Michelle Egan’s new book -- Single Markets: Economic Integration in Europe and the United States -- analyzes the challenges in constructing an internal market from constituent nation states on both sides of the Atlantic. She asks, what accounts for the political success or failure in creating integrated markets?
By comparing the experiences of nineteenth century America and post-war twentieth century Europe, Single Markets demonstrates how single market formation in both places followed a similar trajectory. The book illustrates the process of market consolidation through a detailed comparison of the “four freedoms” that are cornerstones of a single market -- the largely unrestricted transfer of people, goods, services, and capital across different jurisdictions.
Egan, the Jean Monnet Chair at AU’s School of International Service and an expert on the European Union, asserts that the EU is facing a number of challenges with its single market due not only to populist backlash throughout Europe but also in terms of the sovereign debt crisis that find many parallels in nineteenth century American market integration with its panics, defaults, and recessions.
Many Europeans today, particularly in Greece and the United Kingdom, are concerned about increased centralization and perceived threats to national identity in Europe. This phenomenon, Egan argues, is similar to the reaction the U.S. government faced from agrarian populist parties when it created a single market during the nineteenth century. The issue still resonates today in the United States where there is strong resistance in the west to federal intrusion over land and water rights.
“When I began this research, I sought to explore how markets are created and integrated,” explains Egan, who presented her book at SIS on April 22. “How can states create legitimacy and support for market integration and deal with the populist backlash from those negatively affected by increased market competition? I was interested in how the United States did it. Although I did not necessarily strive to give lessons to Europe, I did want Europeans to think about the historical parallels to the economic and political dilemmas they face today.”
For instance, both cases show evidence of interplay between different levels of government in determining distributive outcomes, an evolution of a legal framework for the market, and the development of new regulatory strategies to deal with changing economic realities.
“I identified several parallels, particularly in the creation of institutions, governments, and democratic reforms,” says Egan. “I found that the success of single markets depends on building greater state capacity and democratic institutions.”
Egan concludes that in both the United States and the EU, the establishment of 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. Since the EU is still expanding and developing its single market, Egan recommends that the European Court of Justice continuously adjudicate in order to ensure that the single market operates effectively.
Egan will present her research findings to the European Parliament in Brussels in July and will commence a fellowship at the Wilson Center in the fall.
Follow Professor Egan on Twitter at @MichelleEgan14.