Abstract

This article compares the politics of internal market governance in the European Union and the United States by focusing on a shippable but highly regulated “sin” good: distilled spirits. A few generations ago, both arenas governed spirits in highly decentralized and varied ways. Over time, Europe has centralized regulation to increase market openness while the United States has seen little change. Today regulatory differences between American states create higher barriers to trade than those which persist among their European counterparts. Drawing on 102 interviews with firms, associations, and public officials, we explain this divergence by two factors: institutions and ideas. The EU’s institutional agents have encouraged market openness, including mobilizing pro-liberalization European businesses, while American firms have no similar public allies. Ideationally, European businesspeople are broadly comfortable with centralized enforcement of single market rules, while Americans view federal enforcement as unrealistic or illegitimate.