The Behavioural Law and Economics of the Precautionary Principle in the EU and Its Impact on Internal Market Regulation

Abstract

Deviating from constitutional approaches of internal market regulation, I will first provide an introduction to internal market regulation and its development from an economic perspective. I will weave the precautionary principle in this rationale of internal market regulation and highlight the expectations the precautionary principle as part of the social constitution of EU law shall fulfil. Subsequently I will show that the precautionary principle, when applied in practice, most of the time cannot live up to these expectations. Rather than making a strong contribution to the social order of EU law, the measures based on the precautionary principle "in action" lie largely in line with the economic rationale of traditional internal market regulation. In the few areas where it changed the traditional concept of internal market regulation, it did so mainly at the level of regulations through EU institutions only. At the Member State level, the precautionary principle did only in a very narrow area lead to more protection of the individual. Endorsing a theory that has been brought forward earlier by Giandomenico Majone, I will argue that the precautionary narrative is used by European institutions in order to empower the individual for the purposes of expanding the regulatory capacity of EU institutions against the Member States. The weakness of Majone’s theory has so far been that he could not convincingly explain why and how this mechanism of expanding regulatory theory works. Drawing on insights from the works of Cass Sunstein and Frank Furedi, I will try to provide an explanation for this phenomenon: By easing fear of European citizens about causal uncertainties, they create trust in the regulatory capacity of the EU institutions in areas where citizen are most vulnerable: In their concern about their health and safety. I will then critically review this development and argue for a more nuanced application of the precautionary principle, which takes the interdependencies between traditional integration based on fundamental freedoms and the provision of fundamental rights more seriously.

Keywords: behavioural law and economics, precautionary principle, internal market regulation, information paradigm