THE ECONOMIC BASIS OF STATE AID LAW

Abstract

The paper addresses the issue of the economic basis of state aid law. Although the issue has been absent in the Polish legal literature there is a growing debate over the economization of state aid law in the European jurisprudence. Increasing role of the economic analysis in state aid cases is the result of the new Commission plan of modernization and limitation of state aid in Europe called Less and Better Targeted Aid. It has been argued that the economic basis of the state aid law are two economic concepts i.e. market failures and equity. The most important market failures are: externalities, public goods, merit goods, economies of scale, imperfect information and missing markets. Whenever it is possible reference to the case law is made in order to present the application of economic theories in practice.