"Subsidiarity, Federalism and Regulatory Competition: A Political Economy Perspective"

This paper shows different effects implied by the subsidiarity principle as viewed from a rational choice perspective. It is conceived as a survey of ideas and of relevant literature. The article gives an overview of theoretical approaches relevant to the issues which bridge the dichotomy of economics and of political science. A main focus is on the link between institutional features and policy outcomes. In this contribution, three main aspects of subsidiarity are looked at. Firstly, the allocation of decision-making power to lower political levels will have repercussions on the behavior of member states and on actors on the sub-national levels (such as national interest groups). In the absence of decisions by institutions of the Union, many policy areas will basically constitute collective action problems: mutually beneficial outcomes (or public goods) can only be secured if member states have no incentives to free ride and if special interest groups are prevented from obtaining benefits to the detriment of the "public interest". Such aspects are considered in Section II. Secondly, subsidiarity may lead to a redistribution of policy competences between the Union institutions and the member states. This has implications on the degree of centralization within the Union (and on political legitimacy). Very prominently, it may to a certain degree introduce competition between national bureaucracies. These issues are addressed in Section 111. Finally, enhanced legislative power for the member states will by necessity lead to the maintenance of a divergence in the laws and the regulations of member states with respect to several policy areas. From an economic perspective, within a common market framework, this implies that national rules and regulations will be in competition with each other -- an effect also provoked by the introduction of the "new approach" in the framework of the internal market program. Section IV provides an overview of theoretical approaches cornected to regulatory competition and illustrates selected evidence from EU practice

Council Decision Rules and European Union Constitutional Design

In the recent past, the choice of adequate voting weights and decision rules for the Council of the European Union (EU) has been a highly contested issue in EU intergovernmental negotiations. In general terms, the selection of a threshold for qualified majority votes (QMV) in the Council constitutes a trade-off in terms of decreased sovereignty for individual governments versus an increased collective ‘capacity to act’. This paper compares the effects of the proposal tabled by the Convention on the Future of Europe with the Nice Treaty provisions and the Lisbon Treaty, in terms of both the efficiency of decision-making and the distribution of relative voting power within the EU of twenty-seven member states. In addition, the paper shows how with the current size of EU membership, the EU risks being unable to reach intergovernmental agreement. Accordingly, a challenging issue for the future of the EU is to move towards reasonable provisions that allow its own constitution – if ever adopted – to get amended.Council of the European Union, decision rules, constitutional design, capacity to act, power indices

Connected Coalition Formation and Voting Power in the Council of the European Union: An Endogenous Policy Approach. EIPA Working Paper 99/W/05

Resorting to political economy approaches, this paper attempts to associate the industrial structure in the European Union (EU) to the coalition formation process between European member states. Using a well-known measure of relative voting power, the (normalized) Banzhaf power index, we relax the common assumption that coalitions form randomly. Instead, we adopt the standard interest group model and look at the structure of European industry, mainly in terms of industrial concentration in the EU, as an indicator of its lobbying influence on domestic politics and governments’ preferences. This, in turn, influences the political stance, and thus the coalition building process, of the different member states in the Council. We derive estimates on members’ relative influence within the Council for different policy areas in the broader framework of industry and trade, on the basis of both weighted votes and likely patterns of coalition-formation in the Council

Comparative Federalism meets the European Union

In the current debate on the future European order, the European Union is often described as an emerging federation. The paper claims that federalism is not only useful in deliberating about the future of the European Union. It provides a better understanding of the current structure and functioning of the European system of multilevel governance than most theories of European integration. We combine political and economic perspectives of federalism to analyze the balancing act between effective political representation and efficient policy-making in the European Union. Drawing on the examples of Germany and Switzerland in particular, we argue that the increasing delegation of powers to the central EU level needs to be paralleled by either strengthened patterns of fiscal federalism or an empowered representation of functional interests at the European level. Without such "re-balancing", the current legitimacy problems of EU are likely to get worse.federalism; multilevel governance; multilevel governance; political representation; interest representation; democracy

The flexibility of constitutional design: enlargement and the Council of the European Union

'Bei der Festlegung von Abstimmungsregeln im Rat der Europäischen Union muss zwischen Souveränitätseinbußen einzelner Regierungen und einer erhöhten kollektiven 'Handlungsfähigkeit' abgewogen werden. Die Regelungen, die im Entwurf zum Europäischen Verfassungsvertrag vorgesehen sind, würden die grundlegende Flexibilität im politischen Alltag der EU wesentlich erhöhen, ohne jedoch die Interessen der Bürger von kleineren und mittleren Mitgliedstaaten angemessen zu schützen. Im Vergleich dazu würden die Regelungen, die im Vertrag von Nizza vorgesehen sind und im wesentlichen auf ein 'Dreifach-Mehrheits-Prinzip' bei Ratsentscheidungen hinauslaufen, die Handlungsfähigkeit des Rates mindern, aber zu einer gemäßigteren 'Gewichtung' zu Gunsten der großen EU-Staaten führen. Am Ende legt der Artikel Hintergrundberechnungen vor, die darlegen, dass in einer EU mit 25 Mitgliedstaaten die Gefahr besteht, keine intergouvernementale Einigungen mehr erzielen zu können. Es wird daher eine Herausforderung für die EU sein, Regelungen in die Verfassung einzubauen, die eine Ergänzung dieser ermöglichen.' (Autorenreferat)'The choice of a decision rule for the Council of the EU constitutes a trade-off in terms of decreased sovereignty for individual governments versus an increased 'capacity to act'. The provisions of the draft constitutional treaty would considerably increase constitutional flexibility regarding day-to-day decision-making in the EU, but without adequately protecting the interests of the citizens of smaller and medium-sized member states. By comparison, provisions foreseen in the Treaty of Nice, which essentially amount to the implementation of a 'triple-majority rule' in Council decision-making, would lower the Council's capacity to act, but would lead to a more moderate 're-balancing' in favor of larger EU states. Finally, the paper provides background calculations indicating that, with twenty-five member states, the EU risks being unable to reach intergovernmental agreement and hence, a challenging issue for the EU is to move towards provisions allowing for its own constitution, once adopted, to be amended.' (author's abstract

Why Is Change so Slow? Assessing Prospects for United Nations Security Council Reform

The article explores how changed patterns of UN membership affected the prospects for UN Security Council institutional reform. First, we outline a theoretical framework based on path dependency, veto player analysis and social choice theory. Second, we offer calculations of decision probability and show that a higher voting threshold lowers chances of winning coalitions in a non-linear fashion. Third, we explore the specific decision-making procedures for UNSC reform and which actors can block reform. We conclude that not only diverging preferences, but that hurdles established early on combined with membership growth have ‘locked in’ the current institutional arrangement.Security and Global Affair