Coexistence rules and regulations in the European Union

The trade-offs for different regulatory systems within the European Union are analyzed using the model by Beckmann, Soregaroli and Wesseler which combines ex ante regulatory and ex post liability cost including irreversibility and uncertainty. The analysis shows that the adoption dynamics of genetically modified (GM) crops within the EU are likely to be different across and within EU Member States. Preferring to ban GM crops totally from their territory, Austria, Hungary, Luxemburg, Poland and the Slovak Republic also introduce very restrictive ex ante regulations. In combination with relatively small farm sizes and a high share of organic farming, these ex ante regulations may also prevent GM crops from being grown. However, some countries that have less restrictive ex ante regulations and more innovavite ex post liability rules are more likely to gain experience. These countries include the Czech Republic, Denmark, Germany, The Netherlands and Spain.