Journal Article

What determines EU decision making? Needs, power or both?

Heikki Kauppi and Mika Widgrén

in Economic Policy

Published on behalf of Center for Economic Studies of the University of Munich

Volume 19, issue 39, pages 222-266
Published in print July 2004 | ISSN: 0266-4658
Published online August 2014 | e-ISSN: 1468-0327 | DOI: https://dx.doi.org/10.1111/j.1468-0327.2004.00123.x
What determines EU decision making? Needs, power or both?

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This paper examines the determinants of power in the Council of the European Union. It argues that quantitative power indices stemming from voting theory provide a good description of the actual distribution of power among EU members. Of course, we cannot directly verify the accuracy of such indices since it is impossible to measure power directly. Instead, we evaluate whether these power measures explain a quantifiable manifestation of the exercise of power, namely members’ shares of EU budget allocation. As an alternative explanation of the EU budget, we also consider a ‘needs view’ of the budget, where members’ allocations are determined by principles of solidarity. Our empirical analysis is based on 1976–2001 data on the patterns of the EU budget shares and on measures of each member state's needs and political power. Our results indicate that at least 60% of the budget expenditures can be attributed to selfish power politics and the remaining 40% to the declared benevolent EU budget policies. However, when we apply specific voting power measures that allow correlated preferences and cooperative voting patterns between the member states, our estimates indicate that the power politics view can explain as much as 90% of the budget shares. We conclude that power politics can explain a major part of the Council decisions and that correlated preferences and voting cooperation between EU countries potentially play significant roles in EU decision making.

— Heikki Kauppi and Mika Widgrén

Journal Article.  19282 words.  Illustrated.

Subjects: Economic Growth and Aggregate Productivity ; Financial Regulation ; Health, Education, and Welfare ; Labour and Demographic Economics ; Macroeconomics and Monetary Economics ; Public Economics ; Regional Government Analysis

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