Liberal Intergovernmentalism in the European Union
Liberal Intergovernmentalism
The EU from a Liberal Intergovernmentalism Perspective
Insists that states are still in full control of the integration process
Two levels of analysis:
Domestic preference formation
EU intergovernmental bargaining
Blends classical intergovernmentalism with a pinch of neo-functionalism
Now a widely (but not universally) accepted account of what’s going on
There is no body superior to the state:
“Integration” and “supranationalism” way too suggestive
His definition of integration: “process of merging domestic interests”
Co-operation based on lowest common denominator solutions
State will only realize economic benefits from “integration” if “integration” does not undermine long-term political survival of the state
Economic interests dominate domestic preference formation
EU inter-governmental bargaining reflects member states’ relative power
Institutional choice is determined by national desire for more credible commitment
Analysis of Liberal Intergovernmentalism
1. What is Moravcsik’s basic view of the European Union?
First, it builds on ‘intergovernmentalism’, a traditional school of thought in European integration studies, but gives it a much more sophisticated and rigorous theoretical underpinning.
Second, it is a ‘grand theory’ seeking to explain the ‘major steps toward European integration’ from ‘Messina to Maastricht’ and on to ‘Amsterdam’ in a multicausal framework.
Third, by standards of European integration theory, it is a ‘parsimonious theory’, which can be summarized in a few general propositions that claim to explain the core of European integration.
Last, but not least, there is widespread agreement that LI does explain much of state behavior in the EU.
2. What are the three stages of the basic LI argument?
Liberal theory of preference formation: domestic negotiations on national preferences
Distribution of bargaining power determines outcomes of negotiations: international negotiations on substantive international cooperation (interstate bargaining)
The role of institutions is restricted to monitoring and enforcement (functional theory of institutional choice): after agreement has been reached, international negotiations on the choice of institutions
3. What are the core features of the “rational choice” assumption about actors?
The core action-theoretic assumption is ‘rational choice’: actors calculate the utility of alternative courses of action and choose the one that maximizes their utility under the circumstances.
Rationalist institutionalism in IR theory then seeks to explain the establishment and design of international institutions as a collective outcome of interdependent (‘strategic’) rational state choices and intergovernmental negotiations in an anarchical context.
4. What determines the foreign policy preferences of a given state?
According to liberal theories of IR, ‘the foreign policy goals of national governments are viewed as varying in response to shifting pressure from domestic social groups, whose preferences are aggregated through political institutions’. As a consequence, state preferences are neither fixed nor uniform: they may vary within the same state across time and issues, and they may vary between states depending on different domestic constellations of preferences, institutions and power.
5. What are the first and second-order problems of collective action?
To explain the substantive outcomes of international negotiations, Moravcsik follows rationalist institutionalism in IR in using a bargaining theory of international cooperation. Rationalist institutionalism distinguishes first- and second-order problems of international collective choice in problematic situations of international interdependence (situations in which non-cooperative behavior is the individually rational choice but in the end leaves all states worse off):
The first-order problem consists in overcoming such collectively suboptimal outcomes and achieving coordination or cooperation for mutual benefit. How are mutual gains of cooperation distributed among the states?
The second-order problems arise once the suboptimal outcomes are overcome. How are states prevented from defecting from an agreement to exploit the cooperation of others?
6. What determines the outcome of international negotiations?
Bargaining theory argues that the outcome of international negotiations, that is, whether and on which terms cooperation comes about, depends on the relative bargaining power of the actors.
Bargaining power is a result of the asymmetrical distribution of information and the benefits of a specific agreement.
Generally, those actors that have more and better information are able to manipulate the outcome to their advantage, and those actors that are least in need of a specific agreement are best able to threaten the others with non-cooperation and thereby force them to make concessions.
7. What explains the supranational institutional design of the EU?
To explain the establishment and design of international institutions, IR rationalist institutionalism relies mainly on a functional account: states establish international institutions to manage and overcome the first- and second-order problems of international cooperation.
8. What are the functions of the institutions?
With regard to the first problem, rationalist institutionalists may help states reach a collectively superior outcome, above all by reducing the transaction costs of further international negotiations on specific issues and by providing the necessary information to reduce the states’ uncertainty about each other’s preferences and behavior.
With regard to the second-order problems, they establish rules for the distribution of gains and reduce the costs of controlling the behavior of states and sanctioning non-compliance. Different institutional designs then reflect the specific problems of cooperation caused by, above all, the severity of distributional conflict and enforcement problems and by uncertainty about the preferences of other actors and the state of the world.
9. What is bargaining in the EU mostly about?
LI describes the most relevant bargaining processes in European integration as processes of intergovernmental bargaining concerning the distribution of gains from substantive cooperation. More concretely, they have in the past consisted of hard bargaining.
10. Why don’t supranational institutions have an impact on bargaining? Does this argument convince?
The bargaining power of supranational actors is low because they are deprived of their main bargaining resource: scarce and asymmetrically distributed ideas and information. Supranational entrepreneurship is not necessary to reach efficient agreements, and supranational institutions lack the power to bargain successfully for concessions by the member states.
11. What are the effects of European integration on the Member States? Do you agree with this argument?
By transferring sovereignty to international institutions, governments effectively remove issues from the influence of domestic politics, which might build up pressure for non-compliance if costs for powerful domestic actors are high. They also remove them from decentralized intergovernmental control, which may be too weak to secure compliance, in particular if powerful member states violate the rules. The degree to which governments favor the pooling of sovereignty (voting by other procedures than unanimity) and the delegation of sovereignty to supranational institutions depends on the value they place on the issues and substantive outcomes in question: the higher the gains of a cooperative agreement for a government, and the higher the risk of non-compliance by other governments, the higher its readiness to cede competences to the EU to prevent potential losers from revising the policy.
12. What are the main criticisms of LI? (snapshots)
The LI analysis of European integration is inadequate: biased case selection, internal theory problems, and neglect of integration dynamics.
Moravcsik’s interpretation and explanation of individual state preferences and policies as well as particular events in various stages of European integration.
The meta-theoretical or methodological critique that rejects the ‘positivist’ methodology, the causal analysis and hypothesis-testing design, or the rationalist framework of LI as such.
LI is not able to explain all of EU politics, in particular its day-to-day policy-making under the first (EC) ‘pillar’, because Moravcsik himself limits the scope of LI to treaty negotiations and other issues of unanimous decision-making.
13. What is a scope condition of LI? Which are they?
Andrew Moravcsik states several scopes or antecedent conditions for LI, that is, conditions under which the theory is assumed to have the greatest explanatory power.
First, LI should work best with intergovernmental decisions under unanimity, which are typical of treaty-amending negotiations and decisions in the European Council but also generally pertain to the second and third pillars of the EU, the Common Foreign and Security Policy and cooperation in Justice and Home Affairs.
Second, domestic economic interests most clearly shape state preferences, the ‘more intense, certain, and institutionally represented and organized’ they are and the less ‘uncertainty there is about cause-effect relations’. Particularly true of EU policies in agriculture and trade. ‘The weaker and more diffuse the domestic constituency behind a policy’ and the more uncertain or modest are ‘the substantive implications of a choice’, the less predictable are national preferences and the more likely ideological preferences will be influential.
Third, intergovernmental bargaining is the dominant pattern when transaction costs are low and information is plenty and symmetrically distributed. Supranational influence is possible when ‘national governments face high ex-ante transaction costs and significant informational or ideational asymmetries favor supranational entrepreneurs’.
14. Explain the LI account of the establishment of the CAP. Is it convincing?
The consolidation of the common market roughly spanned the 1960s. It included the removal of internal, and harmonization of external, tariffs and the creation of the Common Agricultural Policy (CAP). CAP has remained a core element of the ‘European bargain’ and continues to consume the better part of the EU’s budget expenditures. Indeed, it is arguably the most important single foreign economic policy pursued by any industrialized government today. For Moravcsik, this institutional ‘capture’ is endogenous. It is precisely because agricultural interests are so strong, and because nearly all industrialized governments are committed to their subsidization where necessary, that they are privileged in EU-level negotiations. For any LI analysis of integration, the initial task is to explain state preferences by the structure of domestic economic interests, then to analyze the intergovernmental bargaining and its outcomes, and finally to account for the choice of institutional provisions.
17. What are the main strengths of LI?
LI is a synthesis of traditional, realist intergovernmentalism with a liberal theory of domestic preference formation and a functional theory of international institutions.
LI co-exists well with rational-choice institutionalism, with which it shares basic theoretical and methodological assumptions and which has its empirical domain in European Union politics, the day-to-day policy-making within the institutions explained by LI.
The enlargement case demonstrates that LI can also be complemented and synthesized with ideational explanations borrowing from social constructivism.
LI is parsimonious and general. It uses a limited number of parameters to explain the main substantive and institutional outcomes in the European integration process.
It sets high methodological standards. Moravcsik carefully specifies testable hypotheses including alternative explanations and uses primary, original sources to support his findings.
There is widespread agreement that it does explain fundamental sources, processes, and outcomes of European integration. The theoretical, methodological, and empirical achievements of LI justify its status as a baseline theory of European integration.
The paradoxical effects of a baseline theory in a competitive academic market: new studies will be framed against it and seek to show that it does not explain all aspects of European integration, or that it does not do so sufficiently, thereby creating the appearance of general criticism while indirectly reproducing general acceptance of the theory’s baseline status.