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Francesco Passarelli, Harvard, Bocconi, and Teramo University of Macau -, March 2 nd 2012 Based on a paper with J. M. Barr, Rutgers University Who has.

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Presentation on theme: "Francesco Passarelli, Harvard, Bocconi, and Teramo University of Macau -, March 2 nd 2012 Based on a paper with J. M. Barr, Rutgers University Who has."— Presentation transcript:

1 Francesco Passarelli, Harvard, Bocconi, and Teramo University of Macau -, March 2 nd 2012 Based on a paper with J. M. Barr, Rutgers University Who has the Power in the EU?

2 EU Members Austria Belgium Denmark France Finland Germany Greece Ireland Italy Luxembourg Netherlands Portugal Spain Sweden United Kingdom Bulgaria (2007) Cyprus (2004) Czech Rep. (2004) Estonia (2004) Hungary (2004) Latvia (2004) Lithuania (2004) Malta (2004) Poland (2004) Romania (2007) Slovakia (2004) Slovenia (2004) Croatia(2013) Turkey(na) Old Members Newly Acceding Countries

3 The EU Government European Parliament MEPs Directly Elected by citizens Legislative Branch Council of Ministers Ministers from member governments Legislative Branch Commission Appointed commissioners Agenda Setter

4 EU Council EU’s main decision making body Represents member governments Members are one minister from each member’s national government Rotating presidency Weighted votes Most issues are passed by qualified majority

5 The path for reforms Historical dichotomy: Locating the optimal balance between the intergovernmental nature of the EU and a federal development The Treaty of Nice (12/2000) failed to find a solution Laeken Summit (12/2001), a new method: the Constitutional Convention Bruxelles Summit (6/ 2003) endorsed the Convention's proposals Rome (10/2004) the Constitutional Treaty (CT) signed

6 The path for reforms 5/2005, French and Dutch vote “NO” to the Constitution 10/2007, the heads of states decided to Constitution and keep the institutional reforms within the ‘Lisbon Treaty’ 5/2008, Ireland said ‘NO’ in a referendum which stopped again the ratification process. October 2009, a second referendum in Ireland passed the ratification. The Lisbon Treaty comes into force on the 1st December 2009.

7 EU 27 Votes - ‘Pre’- and ‘Post Nice’ CountryPre-NiceNice Ger, Fra, Ita, UK 1029 Spa, Pol 827 Romania13 Netherlands513 Belg, Cze, Gree, Hung, Port 512 Aus, Swe, Bulg 410 Den, Ire, Lith, Slova, Fin 37 Cyp, Est, Lat, Lux, Slov 24 Malta3 Total87345

8 EU 27 Qualified Majority – ‘Nice’ 245 votes out of 345=72% A majority of member states approve Any member state can ask for confirmation that the decision represents 62% of EU’s total population

9 Nice: Votes and Population Spain, Poland

10 Nice: the probability of making a decision Spain, Poland

11 Lisbon’s Plan Nice agreement viewed as too ‘decentralized’ Small countries have more power to block bills they don’t like Lisbon’s plan attempts to: Centralize power in hands of big 4 Preserve democratic foundations Simplify rules

12 ‘Lisbon’: Qualified Majority At least 15 out of 27 countries vote yes And 65% of population (314 millions votes) votes yes

13 EU 27 – Lisbon CountryVotes Germany 82,193 UK 59,832 France 59,521 Italy 57,844 Spain 39,490 Poland 38,649 Romania 22,443 Netherlands 15,983 Greece 10,565 Czech Rep 10,272 Belgium 10,262 Hungary 10,024 Portugal 10,023 CountryVotes Sweden 8,883 Bulgaria 8,170 Austria 8,121 Slovakia 5,401 Denmark 5,349 Finland 5,181 Ireland 3,820 Lithuania 3,696 Latvia 2,417 Slovenia 1,989 Estonia 1,436 Cyprus 671 Luxembourg 441 Malta 390

14 Background research questions Is Lisbon’s decision-making system fair? Does it have any democratic foundations? Is there any democratic deficit in the EU? Is this a relevant issue?

15 How to address these questions? We focus on the Council of Ministers We model legislative bargaining in the Council We call ''value'' (or power) the worth of playing that legislative bargaining

16 What is Power? Prestige Ability of tipping the final decision in the most preferred direction The value of the vote

17 Political power results from The decisional rules set in the Constitution: (Super)-majority threshold Voting weights And Voters' preferences (i.e., their “ideological profiles”)

18 How to measure power? In a completely agnostic perspective Shapley-Shubik (1954): a voter's power is her chance to play a pivotal role Voters are symmetric: preferences or ideologies are not considered

19 What happens if we consider ideological profiles? The legislators have to coordinate in order to make a common decision The idea that the median-voter is the most powerful one emerges this results from the idea that only some orderings are possible It suggests that we must concentrate on how voters enter coalitions (i.e. in which order) basically: orderings in which ideologically similar players are close should be more likely (and vice versa)

20 An example: simple majority Five voters, no weights, left right ABCDE C is the most powerful one only if:  The proposal comes either from A The ordering is A,B,C,D,E  or from E The ordering is E,D,C,B,A

21 What happens if…. …. the proposal comes from C, or from D? …. voting is weighted? …. there is a super-majority threshold? …. there is an agenda setter? …. the political space is multidimensional? left right ABCDE

22 Two dimensional space Two issues, x: government spending; y: defense policy high aggressive moderate low C E B D A

23 The literature on ideological power Shapley, 1977 Owen, 1972 Owen and Shapley, 1989 Rabinowitz and MacDonald, 1986

24 Our Paper We use the Owen-Shapley (1989) approach to generate ordering probabilities We use Eurobarometer data to build up a political space We look at how an Agenda setter (the Commission) can impact on ordering probabilities, and affect power We compare the old system (Nice) with the Lisbon Treaty

25 Three formulas Probabilistic value Probability of a political coalition Owen and Shapley We add an Agenda setter that blows the political wind

26 Empirics

27 Research Question How do  number of votes per country,  majority threshold levels,  preferences of countries,  preferences of the agenda setter affect power of countries within the Council of Ministers?

28 Data: Eurobarometer (EB) Public opinion of citizens of member states. Standard EB established in 1973. Each survey consists of 1000 face-to-face interviews per Member. Reports are published twice yearly.

29 Eurobarometer Our study: Avg. of 3 surveys We use data collected on citizen’s opinions regarding who should have control over EU policies. 25 questions—range of “inter-national” and “intra- national” issues Data are aggregated in two dimensions using the Principal Component Analysis (an econometric technique)

30 “For each of the following areas, do you thing that decisions should be made by (NATIONALITY) government, or made jointly within the EU?” Issue 1Defense13Information about the EU, its policies and institutions. 2Protection of the environment14Foreign policy toward countries outside EU 3Currency15Cultural policy 4Humanitarian aid16Immigration policy 5Health and social welfare17political asylum 6Media18organized crime 7Fight against poverty/social exclusion19police 8Fight against unemployment20justice 9Agriculture and fishing policy21accepting refugees 10Support of regions experiencing economic difficulties22juvenile crime 11Education23Urban crime 12Scientific and technological research24Drugs 25exploitation of human beings


32 EU 15 Preferences

33 EU 27: Preferences

34 EU 15 Pre-Nice: Measures of Power CountryVotesS-S S-O Spatial Germany100.1170.142 Portugal50.0550.141 Spain80.0950.118 France100.1170.114 Austria40.0450.092 Belgium50.0550.083 Netherlands50.0550.076 Ireland30.0350.059 UK100.1170.048 Sweden40.0450.047 Greece50.0550.045 Italy100.1170.025 Finland30.0350.009 Luxembourg20.0210.003 Denmark30.0350.000

35 EU 27 ‘Nice’ EU 27 Nice CountryVotesS-S S-O Spatial Czech Rep120.0340.132 France290.0870.101 Germany290.0870.091 Spain270.0800.089 Greece120.0340.063 Bulgaria100.0280.062 Netherlands130.0370.054 Lithuania70.0200.048 Italy290.0870.048 Poland270.0800.035 Belgium120.0340.033 Romania140.0400.030 Portugal120.0340.024 Slovakia70.0200.024

36 EU 27 Nice continued CountryVotesS-S S-O Spatial Hungary120.0340.023 Ireland70.0200.021 Latvia40.0110.021 Denmark70.020 Sweden100.0280.017 UK290.0870.016 Cyprus40.0110.014 Austria100.0280.011 Finland70.0200.010 Slovenia40.0110.006 Luxembourg40.0110.004 Malta30.0080.003 Estonia40.0110.000

37 EU 27 – ‘Lisbon’ CountryVotesS-S S-O Spatial Austria 8,1210.0200.017 Belgium 10,2620.0230.022 Bulgaria 8,1700.0200.065 Cyprus 6710.0080.012 Czech Rep 10,2720.0230.035 Denmark 5,3490.0160.030 Estonia 1,4360.0100.025 Finland 5,1810.0150.016 France 59,5210.1070.092 Germany 82,1930.1570.185 Greece 10,5650.0240.023 Hungary 10,0240.0220.006 Ireland 3,8200.0130.048 Italy 57,8440.1050.076

38 EU 27 – ‘Lisbon’ cont CountryVotesS-SNBI S-O Spatial Latvia 2,4170.0110.0170.018 Lithuania 3,6960.0130.0190.035 Luxembourg 4410.0080.0150.000 Malta 3900.0090.0140.004 Netherlands 15,9830.0320.033 Poland 38,6490.0710.0630.001 Portugal 10,0230.0230.0270.050 Romania 22,4430.042 0.049 Slovakia 5,4010.0160.0210.025 Slovenia 1,9890.0110.0160.009 Spain 39,4900.0730.0640.070 Sweden 8,8830.0210.0250.006 UK 59,8320.1080.0910.047

39 The democratic deficit (%) SSISSI-popS-OS-O-pop PopNiceLisNiceLisNiceLisNiceLis Four big states 60.534.849.1-25.7-11.425.638.5-34.9-22.0 Franco-German axis 33.017.427.3-15.6-5.719.231.3-13.8-1.7 12 Acceding members 24.630.823.36.2-1.339.826.215.21.6 Spain and Poland Scandinavian +UK 18.515.713.6-2.8-

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