Nation-states and common markets: the institutional conditions for acceptance

The polarized debate on the future of the nation-state in common markets singularly focuses on who controls supra national decision making. Scholars of the European Union, for instance, have for long disagreed over the extent to which nation-states control the European Commission. We believe that common markets can erode the authority of the nation-state through a second venue: with the promulgation of rules that, upon proper implementation, reach deep into national legislative and administrative authority and strip the nation-state of its ability to regulate important aspects of social life. When viewed from this perspective, the nation-state appears strangely positioned. In the European Union and Mercosur states at times yield to and at times refuse transnational rules. We propose an explanation for these implementation patterns. The explanation will, in our view, contribute more to a genuine understanding of current state-market conditions than any additional claim for or against the hegemony of common markets. Our hypothesis is institutional, centring on the challenges that transnational rules pose on the policy legacies and interest group organization of nation-states. To test our views, we turn to the European Union and the fate of a major environmental directive in Italy, Great Britain and Spain.