Economic integration, sovereignty, and democracy: How British businesses assess the trade relationship with the EU and its trade-offs

Abstract

The Brexit campaign claimed that by leaving the EU, the UK would ‘take back control’, not least by regaining control of immigration, freeing itself from unnecessary red tape and unnecessary regulation, and being able to pursue its own trade deals. The campaign’s promise was that a free global Britain would be able to overcome Dani Rodrik’s trilemma and reconcile globalisation, sovereignty, and democracy. Rodrik (2011) argues that between these three aims, states can only ever achieve two. States can restrict democracy in the interest of minimising international transaction costs. They can limit globalisation in order to build democratic legitimacy. Or they can globalise democracy and lose national sovereignty. The UK is now exposed to the fact that there is a tension between these three aims, and that economic integration has admittedly been weakened. This paper presents new data on how UK businesses assess the gains and losses of having left the Single Market, and which would be their preferred trade model as a result.