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The ability of supranational agents such as the European Commission and Court of Justice to influence policy outcomes in the European Union varies as a function of the control mechanisms established by member governments to limit supranational discretion. Examines three cases of market liberalization representing a range of control mechanisms, in the areas of external trade (negotiation of the Uruguay Round), competition policy (the De Havilland merger decision) and the free movement of goods within the Union (ECJ jurisprudence from Cassis de Dijon through Keck). Taken together, these three case studies suggest that the Commission and the Court have indeed been activist in their mission to establish a single European market, but also that their successes have been limited as a function of the control mechanisms established by member governments to control their discretion.

This chapter begins by providing an overview of the basic arguments of the dual labour market approach and of previous attempts to construct a formal analytical framework, and, by drawing attention to some important but neglected points, proposes a synthesis with which to understand the working of the labour market. Section 5.1 examines various empirical criticisms of the neoclassical theory, and discusses the need for a new analytical framework as well as the features that must be incorporated into such a framework; the section also serves as an introduction to the theoretical discussion that follows. Section 5.2 considers the determinants of the division of labour and of technology that are treated as exogenous in the neoclassical theory from a historical and political‐economy viewpoint, and also briefly surveys the historical process that gave rise to the internal labour markets of firms ( the key concept in this approach). Section 5.3 discusses the content of the dual labour market hypothesis, and Sect. 5.4 constructs a model of the economy with dual labour markets and analyses the determinants of earnings distribution in the long run, also examining points of controversy with the neoclassical approach. Section 5.5 presents an analytical framework embodying the theory of incentive‐dependent exchange, derives implications on the allocation of employment opportunities and the distribution of earnings, and discusses in what respects this theory competes with the neoclassical theory.

This chapter sheds light on the nature of managerial resourcing in US multinationals. Hitherto there has been a strong reliance on the use of internal labour markets (ILMs) as the principal means of sourcing managerial talent. In several instances, however, enhanced competition has triggered the necessity for the rapid importation of new skill sets eroding the primacy of ILMs. Over and above such supply side change, some organizations were similarly moving away from seniority based promotion towards a more meritocratic model, less sheltered from the vicissitudes of market pressures. Consistent with the theoretical focus of this volume, it is nevertheless demonstrated that headquarters did not have a totally free hand. The partial dismantling of ILMs was subject to local constraints and contestation, giving rise to new and significant tensions. More specifically, the emphasis upon tight performance standards was often met with stiff opposition suggesting local norms remain influential.

What kind of contribution will the theories developed so far make to an understanding of the working of the labour market? From among the various important topics concerning the Japanese labour market, this chapter focuses on its dualistic structure, which has for years caught the attention of many researchers. The chapter consists of two sections. Section 6.1 reviews the meaning of the dualistic wage structure in Japan, and discusses the theoretical rationale for its emergence. Section 6.2 is devoted to an empirical test of whether the entry fee/bond mechanism believed to have the role of removing the entry barrier to the internal labour market actually operated in Japan, by examining the cohort wage profiles of male new school graduates and their movement over time––the supposition being that, if such a mechanism were ever to operate, it would do so by way of generating a seniority wage element that would necessarily be anti‐cyclical in nature. The focus is placed on the new school graduates market because it is the principal port of entry into the internal labour market in Japan, and has previously been regarded as a very competitive one.

The four types of employment systems shape skills and labour market structures according to the degree of functional flexibility in work assignments and whether firm internal labour markets or occupational labour markets prevail. Both of these depend on a different type of institutional support because of different collective action problems. The chapter also shows how the theory can be applied to monopsony in secondary labour markets, and to recent developments in ‘market‐mediated’ employment forms.

The impact of the completion of the European Internal Market Programme (IMP) on the geographical distribution of economic activity within the European Community (now Union) is considered. More particularly, the empirical validity of a number of hypotheses, drawn from foreign direct investment (FDI) theory, on the likely effect of the removal of tariff barriers on intra‐EC and extra‐EC trade and FDI flows and the relationship between the two are considered. The evidence strongly suggests that the twin forces of regionalization and localization have been accelerated by recent European integration, and that the balance between the two is strongly determined by the knowledge intensity and mobility of the economic activities involved.

This chapter argues that EU environmental governance today can be analysed as an amalgam of four to five environmental governance regimes which have successively been layered on top of each other over the past thirty-five years. The evolution of EU environmental governance began with the ‘environmental regime’ which was later supplemented by the ‘Internal Market regime’, the ‘integration regime’, the ‘sustainable development regime’, and the emerging ‘climate regime’. These environmental governance regimes can be distinguished in terms of their overall political priorities, legal foundations, decision-making methods, types of justification, underlying political dynamics, environmental objectives, and instruments. Despite certain modifications, key characteristics of each of the regimes are still present in the system of EU environmental governance.

This chapter briefly recalls to mind the ominous problem of curbing the growth of Union competence. It discusses the cases recently decided by the ECJ concerning vertical competence allocation, in this connection, reconstructing the new theory of Union jurisdiction manifest in these cases under the name of ‘market holism’ and contrasting it with the most obvious alternative — market liberalism. Market holism comprises the following pair of beliefs. According to the first belief, the internal market is not merely a specific segment of public policy for which the Union happens to have been accorded harmonization competence. Rather, the internal market is a regulatory space permeating the totality of public policy subject to certain conditions. According to the second belief, the definition of the internal market turns on the interdependence of free movement and competition.

This chapter continues with the discussion of market holism. Its development is traced back to a series of creative misreadings of the existing case law. It explains how the ECJ's new theory of competence allocation overrode prior constraints, and it explores the horizontal and vertical dimensions of Union competence. Vertically, market holism can be tied to interferences with fundamental freedoms; horizontally, it promises to fuse the removal of obstacles and the elimination of distortion of competition into a single basis of Union power. The chapter discusses alternative renditions of these powers, and concludes that market holism appears to be most plausible where the Union has committed itself legally to abide by a high standard of protection, such as in the areas of health, consumer, and environmental protection.

Ever since the publication of the General Programmes of 1962, regulating the internal market for services has been a riddle for the EU. In its effort to open up trade in services, the EU legislature has tried and erred — with occasional successes — in various ways. Traditionally, a basic distinction is drawn between, on the one hand, sector-specific and, on the other hand, horizontal legislation. Helpful as it may be, this distinction is neither accurate nor historically precise. This chapter describes the basic regulatory blocks adopted by the EU legislature, and then subjects them to more appropriate normative classifications.

This chapter explores the early stages of the EU’s involvement in contract law and is most particularly concerned with examining the sector-specific programme of consumer contract law directives. In this respect, the internal market foundations of the positive harmonisation measures are especially highlighted. In addition, although perhaps not as visible as the legislative programme, the ECJ has made an imprint on this area of law (negative harmonisation) and the chapter analyses the judicial contribution to the development of a European contract law. The chapter also scrutinises the EU’s competence to act in consumer contract law and assesses the constitutional legitimacy of using the EU treaty’s internal market foundations for legislative measures. It reveals that the relationship between market-making and contract law might be more fragile than is normally assumed.

The EU began its environmental policy in the early 1970s, long before its legal base was introduced into the Treaty in 1987. Unanimous decision-making and the consultation procedure applied until 1987, only gradually substituted by qualified majority voting and the co-decision procedure. The level of conflict over environmental proposals was often high among member states and in the supranational institutions. Nevertheless, more than 500 legislative acts had been adopted by 2008. These were not only concerned with the creation of the internal market (negative integration) but often established ambitious goals to overcome environmental problems and correct market failures (positive integration). The chapter demonstrates how member states and supranational institutions succeeded in escaping the joint-decision trap through the effective employment of techniques for avoiding deadlock.

This chapter looks at the profound influence of EU citizenship and the Internal Market on the legal regulation of the areas where EU Member States retain full competence, using Member State nationalities as a case-study. In the context of a constant rise in the importance of the EU, and unavoidable growth in economic interdependence in Europe, the array of fields of law which come to be subjected to the indirect influence of the Internal Market is only likely to grow, presenting the division of competences between the Member States and the Union in a somewhat different light compared with what can be read in the Treaties. In a way, as long as the importance of European integration is growing it becomes much less important whether the Union actually has competence in regulating a certain area, since the national regulation by the Member States will necessarily take the changing reality into account, adapting national law to the Internal Market.

This chapter discusses the concept of the restrictions to the free provision of services. Regulation is not an end in itself; it is only desirable to the extent that it is necessary for the achievement of a further end. Chapter 1 indicated several reasons justifying regulation. In addition to those reasons, there is yet another which is specific to the EU context: the need to eliminate restrictions to the operation of the internal market. This is achieved through regulation at the EU — and not the member state — level. Accordingly the identification of restrictions to the free movement of services within the EU, generated by national measures, becomes a fundamental aspect of understanding the EU's regulatory activity in the field. Once the legal basis of the ‘right to regulate’ is thus grounded, it becomes crucial to explore the main qualitative characteristics of restrictions, in order to assess, at a later stage, the regulatory means that are best suited to tackle them.

Deals with the process of economic integration in Western Europe since the early 1950s. Section 1 analyses the origins of the EU, focusing on the customs union among the six signatories of the Treaty of Rome. Section 2 deals with the European Free Trade Association. Section 3 examines the three enlargement episodes of 1972, 1981–6, and 1995, which brought the EU up to 15 members. Section 4 analyses the deepening of the EU, centring on the 1992 programme for completing the internal market. Section 5 draws conclusions.

This chapter examines the meaning of ‘services’ in the Treaty, and how the law on services fits into the more general law of the internal market. It argues that this neglected area of free movement law, particularly as regards its future development, deserves greater attention on the part of explorers.

The customs union is one of the important elements of the common market that was established by the European Economic Community (EEC) Treaty. However, the concept of the common market has now disappeared from the Treaty on the Functioning of the European Union (TFEU). This chapter identifies some of the problems — internal and external — in the performance of the customs union and how they have been and are being addressed. This chapter determines that the performance and practice of the internal market and customs union show that in the EU they are linked concepts that form relevant elements of the construction of the EU. It also addresses the existential dependency question with regards to the relationship between the economic union and the EU's persistence.