The Electoral Foundations of Non-compliance: Evidence of the EU Policy on State Aid Control

We investigate the electoral foundations to non-compliance in European Union (EU). Since electoral institutions affect the propensity of a country to rely on distributive policies, we analyse whether they also influence compliance with the procedure to notify state aid measures to the European Commission. In particular, we argue that, where electoral systems create incentives for politicians to provide distributive measures, governments are also more inclined to violate EU rules that constrain the implementation of these measures. Employing data on state aid from 2000 to 2012, we show that compliance increases with higher district magnitude, especially if party leaders have control over the ballot rank. On the other hand, it decreases with higher district magnitude in the presence of other electoral rules strengthening the incentives to cultivate a personal vote.