Scandinavian Working Papers in Economics
Working Papers,
Swedish National Road & Transport Research Institute (VTI)
No 2023:8: Policy diffusion, environmental federalism and economic efficiency : how culture and institutions influence the implementation of EU legislation in two Nordic countries
Lena Nerhagen () and Johanna Jussila Hammes ()
Additional contact information
Lena Nerhagen: Dalarna University, Postal: Dept. of Transport Economics, P.O. Box 55685, SE-102 15 Stockholm, Sweden
Johanna Jussila Hammes: Swedish National Road & Transport Research Institute (VTI), Postal: Dept. of Transport Economics, P.O. Box 55685, SE-102 15 Stockholm, Sweden
Abstract: This article explores the changes in central government administration due to European Union (EU) membership and their consequences for policy outcomes and economic efficiency in Finland and Sweden. Both countries became members of the EU in 1995. Upon joining the union, member states are expected to adopt common legislation and encouraged to develop similar rule-making procedures. The actual implementation of EU directives varies considerably between member states, however. This is also the case for Finland and Sweden. Despite the two Nordic countries for historical reasons having had similar government systems, upon becoming members of the EU they started to diverge. Using a model of delegation and comparing the more centralized Finnish system with the decentralized institutional setup in Sweden, we show that the Swedish approach leads to stricter than optimal environmental policy, which in turn makes EU policy non-optimal from a global point of view, ceteris paribus. We also provide empirical support for our findings in the form of some example-cases. We focus on environmental policy since this is an area that has been high on the EU agenda.
Keywords: Environmental policy; European Union; Legislation; Economic efficiency; Delegation; Environmental federalism
JEL-codes: D02; D61; D73; P52; Q58
Language: English
30 pages, June 14, 2023
Full text files
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