- Research Handbooks in Law and Economics series
Edited by Thomas Eger and Hans-Bernd Schäfer
Chapter 6: Mutual Recognition: Economic and Regulatory Logic in Goods and Services
6 Mutual recognition: economic and regulatory logic in goods and services Jacques Pelkmans* 1 INTRODUCTION AND PURPOSE Mutual recognition (MR) is one of the most appreciated innovations of the EU. The idea is that one can pursue market integration, indeed ‘deep’ market integration, while respecting ‘diversity’ amongst the participating countries. Put differently, in pursuing ‘free movement’ for goods in the EU internal market and hence going beyond merely removing tariffs and quotas, mutual recognition facilitates free movement by disciplining the nature and scope of ‘regulatory barriers’, whilst allowing some degree of regulatory discretion for the EU Member States. Compared with alternative options of ‘deepening’ market integration, this solution is attractive and, in principle, welfare increasing. Mutual recognition might also be appreciated because, in avoiding EU regulation, it tends to limit centralisation, while facilitating ‘regulatory competition’ between Member States and, possibly, lowering the costs of the incredible regulatory heterogeneity business faces in the EU internal market. Nevertheless, mutual recognition is many things to many people.1 The present contribution will not cast the net so wide. The focus will be on the successful and far-reaching examples of the EU internal market for goods and services. The chapter attempts to explain (1) the rationale and logic of mutual recognition in the EU internal goods market (Section 2), (2) its working in actual practice in the EU for more than 25 years, culminating in a qualitative benefit/cost analysis (Section 4) and (3) its recent improvement in terms of ‘governance’ in the so-called 2008 Goods...
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