On the Origins of Political Unions

This paper attempts to explain why it was that the countries of the European Community came together to form a political union in the early 1990s. The explanations most often invoked to explain this process - those drawn from competing schools in international relations and federalism theory - are critiqued and an alternative perspective based on an adaptation of William Riker's work is offered. Riker argues that countries form unions only when faced with an external or internal threat to the territorial integrity of the component states. As no such threat or threats existed in Europe in the late 1980s and early 1990s, this approach looks limited. However, it is argued that the participating politicians at Maastricht did strike a bargain based not on fear of an external or internal military threat, but based on fear of electoral and political instability. Perceiving that inflation was politically damaging and potentially threatening to the existing political order, and aware that they could not control inflation at the national level alone, they were willing to cede authority over monetary policy to a supranational authority. Given the importance of monetary policy as a government function, only federallike arrangements could accommodate this reallocation of government responsibilities.