Do Parties Matter? Partisan Ideology and State Subsidies in the European Union.

Looking at macroeconomic policies, scores of studies (e.g., Garrett 1998; Iversen and Soskice 2006; Blais et al 1993; Adserà and Boix 2002) have argued that the partisan composition of governments makes a difference. Others, e.g., Mishra (2005), Milner and Judkins (2004), and Zahariadis (1997) find that parties matter even in targeted microeconomic policies. Examining trade policy and protectionism, such as tariffs and non-tariff barriers (Mishra) in developed and developing countries and state aids (Zahariadis) in EU countries in the 1980s, authors assert that governments dominated by leftist parties are more likely to pursue protectionist policies. However, analysts have also argued that the end of the cold war and increased globalization have dampened the ability of partisan governments to sustain such targeted policies. In this paper, I explore the effects of parties on industrial subsidy disbursement in the EU during the period 1992-2004. Using pooled time series analysis, predictions are tested in a model controlling for the impact of international economic integration, domestic institutions, and the European Commission. The model has implications for arguments regarding trade policy, coalition formation, and redistributive politics. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]