Since 1994, the budgetary process of European Union governments can be subject to a supranational oversight procedure if the deficit is deemed excessive.
Does it work? In brief, yes.
In this work, I show that the impact of surveillance during budget drafting offsets that of a two-year shortening of expected government duration, the addition of one party to a government coalition when debt is high, or a leftward shift in government ideology when the risk of replacement is low.
Using a technique called exact matching on treatment histories, I also show that these effects peak after four to five years.
Being under surveillance may lower the benefits of fiscal profligacy in the proximity of elections. Reforms, on the other hand, like the one occurring now, hardly make a difference.
International oversight of fiscal discipline European Journal of Political Research
Franchino F and Mariotto C (2022) Bargaining outcomes and success in EU economic governance reforms. Political Science Research and Methods 10(2). 2021/07/15 ed. Cambridge University Press: 227–242. DOI: 10.1017/psrm.2021.26.
We assess the accuracy of procedural and bargaining models in predicting the outcomes of the reforms of the economic governance of the European Union (EU) that took place between 1997 and 2013. These negotiations were characterized by high costs of failure. We confirm the accuracy and robustness of the compromise model, but a procedural model with a costly reference point performs well, indicating that misestimation of the no-agreement cost may be a reason for its commonly reported poorer accuracy. However, this model is more sensitive to measurement errors. We also show how both models contribute to understanding bargaining success and how the conditional influence of the European Parliament should not be ignored. We conclude by discussing the implications of these results for our understanding of the EU.
Franchino F and Mariotto C (2021) Noncompliance risk, asymmetric power and the design of enforcement of the European economic governance. European Union Politics 22(4). SAGE Publications: 591–610. DOI: 10.1177/14651165211023832.
In the European Union, states can distribute enforcement prerogatives between a supranational agency, over which they exercise equal influence, and a Council of ministers, where power resources mostly vary by country size. What shapes attitudes towards different enforcement designs? States at greater risk of noncompliance should eschew deeper cooperation and prefer procedures over which they can exercise more influence. Employing an original data set of positions on relevant contested issues during the negotiations over fiscal governance rules from 1997 to 2012, we show that governments at greater risk of noncompliance prefer greater discretion and, if they have higher voting power, more Council involvement in enforcement. These factors only partially explain positions on Commission empowerment. Given their greater indeterminacy, attitudes are also shaped by national public opinion.
Franchino F, Kayser MA and Wratil C (2022) Electoral competitiveness and responsiveness: rational anticipation in the EU Council. Journal of European Public Policy 29(1). Routledge: 42–60. DOI: 10.1080/13501763.2021.1991986.
Several studies have reported a relationship between governments’ behaviour in the EU Council and public opinion. However, doubts remain about which mechanisms drive this relationship. We argue that governments align their behaviour with public opinion to forestall future electoral sanctions (rational anticipation). To test this, we deduce hitherto untested observable implications of rational anticipation which suggest that governments’ responsiveness to public opinion depends on national-level electoral competitiveness. Using DEU modules I-III and an original empirical measure of electoral competitiveness, we ascertain whether governments adjust their responsiveness as: (1) the expected time period to upcoming elections decreases, and (2) the probability of losing their position in the party system in the next election changes. Our results provide evidence that government parties rationally anticipate risks related to their position in the party system but not to early elections. These findings have implications for our understanding of representation in the Council.
Does politicization – the expansion of the scope of national conflict – shape EU policy design? Are the functional pressures shaping design disrupted?
We address these questions with regard to the EU economic governance regime in this @jepp_journal article.
We reach the following conclusions:
a) This regime, based heavily on Council-centred enforcement, is clearly not in line with standard liberal-intergovernmental expectations about policy design, especially given significant noncompliance.
The first figure below illustrates how enforcement-related prerogatives are pooled within the Council, rather than delegated to the Commission, as liberal-intergovernmentalism suggests, despite the extensive noncompliance. The second figure shows the patterns of noncompliance with this regime across time and member states.
b) We argue that this design has more to do with salience and severe implementation uncertainties, related to somewhat arbitrary criteria, like the reference values, and to unobservable quantities, whose measurement depends on uncertain estimates, THAN with politicization.
For instance, the Council is unlikely to heavily rely on Commission enforcement if the measurement of the output gap is highly uncertain.
c) Yet, problems of compliance and commitment, threats of exclusion and veto, issue linkages, path dependencies, and supranational involvement remain central in explaining the overall direction of reforms toward national tightening, limitation of Council authority and delegation to the Commission, despite recent politicization
d) Note however that this was a case where mass domestic politicization was triggered BY noncompliance and elite conflict. So we should not conclude that politicization is necessarily epiphenomenal for policy design.
Thanks to the special issue editors: C. Reh, C. Koop, and E. Bressanelli.
Transparency improves the relationship between citizens and politicians, but it could lead to posturing or pandering to public opinion. Politicians may therefore fail to adopt policies and reach valuable compromises. In a recent research, Sara Hagemann and Fabio Franchino show that the drawbacks of increased transparency in the EU Council of Ministers have not materialized. The European Union can afford to be more transparent.
Recent studies suggest there is a direct trade-off between transparency and efficiency in legislative politics. We challenge this conclusion and present a bargaining model where one particular kind of transparency – the publication of legislative records – works to overcome problems of incomplete information.
We also present empirical findings from legislative activities in the Council of the European Union from 1999 to 2014 and from 23 interviews with senior officials in Brussels. Our results show that increased transparency, in the form of publication of legislative records, does not lead to gridlock or prolonged negotiations.
On the contrary, recordings of governments’ positions help facilitate decision-making as they increase credibility of policy positions. This, in turn, lowers risk of negotiation failure and screens out marginal amendments.
Italy more law observant than Denmark and Finland? Spain more compliant than Germany? You hardly hear this in the news, but these are the surprising patterns of noncompliance with the regulation on state aid in the European Union between 2000 and 2012. We report the results from a research conducted by Fabio Franchinoand Marco Mainenti that explains how electoral institutions shape the incentives of governments to comply with international obligations.
Check out this figure.
It illustrates the proportion of unlawful measures out of the total number of state aid measures adopted by the countries of the European Union (EU) (measures are unlawful if they do not comply with the EU provisions on state aid). Existing explanations of compliance and implementation in the European Union cannot satisfactorily describe these patterns.
These data not only display surprising patterns across countries but the simple fact that a government decides in the first place to avoid these rules is puzzling since the likelihood of being detected is high and the costs associated with noncompliance are not trivial (an unlawful aid must be recovered, including the accrued payable interests). Notice that certain state aid measures are compatible with EU law.
To explain why countries are willing to take these risks, we use the recent literature on how compliance with international obligations is affected by the types of electoral institutions employed in a country. These institutions can shape the incentives of governments to comply because of the misalignment they may engender between the collective objectives of a government party and the individual objectives of its members in the legislature.
We find that an increase of district magnitude improves compliance (district magnitude is the number of seats available in an electoral district). The higher the magnitude the less politicians are pressured to cater to constituency-specific interests and the less likely they will press their government to circumvent the EU provisions on state aid.
However, where either party leaders have no control over the ballot rank or other electoral rules strengthen the incentives to search for a personal vote, compliance decreases with higher magnitude. These electoral rules increase competition among candidates in a multi-member district. The higher the number of candidates, the toughest the competition and the need for politicians to distinguish themselves from copartisans, the higher the pressure to evade the rules.
Our work also provides evidence for the effects of electoral reforms on compliance.