Now that time has passed since the introduction of the euro as a commercial currency, it is possible to assess many arguments made in the abstract during the 1990s about European monetary union. This article shows that the euro zone still falls short as an optimal currency area in most respects. In particular, it undertakes an empirical analysis of the labour market and finds no progress toward flexibility or integration. These results challenge assertions of ‘endogenous currency area’ proponents that the euro area would become optimal ‘after the fact’, and that labour markets would serve as the principal avenue of adjustment. Instead, a ‘rigidity trap’ has developed in the euro area, consisting of relatively tight monetary policy, forced fiscal consolidation, and a risk of deflation in some economies. These conditions have compounded the difficulties of structural adjustment in European labour markets.

The international political economy literature often expects that states end up in regulatory races to the bottom while competing for the most mobile segments of capital. While multilateralism argues that states are able to overcome prisoner dilemma situations by converging on international standards of regulation, comparative historical institutionalists assume ongoing diversity of regulatory frameworks. The paper shows that reforms of banking regulation in the U.S., Britain and Germany exemplify a pattern of ‘convergence within national diversity’. It is argued that a combination of comparative institutionalism with a multilateral perspective captures the causes and patterns of regulatory reform in finance. While convergence on a certain ‘hegemonic regulatory model’ is due to intergovernmental coordination on the regime level, national diversity with respect to timing and the extent of regulatory change depends to a large extent on the existence or absence of institutional veto points in the domestic political system.

In an era of increasing emphasis on free trade and market deregulation, agricultural policy in advanced industrialized countries remains an anomaly, with many countries continuing to intervene in markets for farm produce. Since the Uruguay Round of multilateral trade negotiations the scrutiny of these interventions has made clear that governments have a range of objectives for their agricultural policies, some unrelated to economic factors. Concern about the future of rural communities, preservation of the countryside, the environment, food safety and animal welfare goals feature to varying degrees in agricultural policy settings. This paper explores the values influencing the formulation of agricultural policy and proposes a policy map of the combination of values reflected in particular policy settings. The map can give a better understanding of why particular policy approaches emerge in some polities and not others.

In the past, green taxation has become a widespread tool in pollution control in Europe. This new type of state intervention is based on an idea developed by environmental economists and diffused internationally through various channels of information exchange. We argue that the idea itself does not inform us about the way in which green taxation is designed because sectoral policy networks influence power relations, which in turn influence the actual design of green tax schemes. Thus, policy networks are the intervening variable explaining why an internationally diffused policy idea is implemented differently in various national settings. This argument is supported by a comparison of pesticide taxation and CO2 taxation in Denmark, Norway and Sweden.