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Voting Rules and Budget Allocation in an Enlarged EU

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  • Heikki Kauppi

    (Department of Economics, University of Helsinki)

  • Mika Widgrén

    (Department of Economics, Turku School of Economics)

Abstract

EU declares to provide support for the rural and poor regions of its member states. However, recent research shows that past EU budget allocations (in EU-15) can be attributed to measures of the distribution of voting power in the Council of Ministers deciding on the bulk of EU spending. A standard power measure alone can explain about 85% of the variance of the past EU budget shares, while, if stable coalition patterns among member countries are taken into account, power can explain at least 95% of the budget allocation. In this paper we use such estimates to predict EU budget shares after the eastern enlargement. According to our estimates eastern enlargement has large effects on the budget receipts of the incumbent member states. Moreover, whether the voting rules are based on the Nice Treaty (NT) or the Constitutional Treaty (CT) makes a difference for most member states. Many member states would be worse off under CT than under NT.

Suggested Citation

  • Heikki Kauppi & Mika Widgrén, 2006. "Voting Rules and Budget Allocation in an Enlarged EU," Discussion Papers 2, Aboa Centre for Economics.
    • Handle: RePEc:tkk:dpaper:dp2
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    Cited by:

    1. Deniz Aksoy, 2010. "Who gets what, when, and how revisited: Voting and proposal powers in the allocation of the EU budget," European Union Politics, , vol. 11(2), pages 171-194, June.
    2. Nikolaos Antonakakis & Harald Badinger & Wolf Heinrich Reuter, 2014. "From Rome to Lisbon and Beyond: Member States' Power, Efficiency, and Proportionality in the EU Council of Ministers," Department of Economics Working Papers wuwp175, Vienna University of Economics and Business, Department of Economics.
    3. László Á. Kóczy, 2010. "Strategic Aspects of the 1995 and 2004 EU Enlargements," Group Decision and Negotiation, Springer, vol. 19(3), pages 267-277, May.
    4. Zaporozhets, Vera & García-Valiñas, María & Kurz, Sascha, 2016. "Key drivers of EU budget allocation: Does power matter?," European Journal of Political Economy, Elsevier, vol. 43(C), pages 57-70.
    5. Kaniovski, Serguei & Mueller, Dennis C., 2011. "How representative is the European Union Parliament?," European Journal of Political Economy, Elsevier, vol. 27(1), pages 61-74, March.
    6. Mika Widgrén, 2008. "The Impact of Council's Internal Decision-Making Rules on the Future EU," Discussion Papers 26, Aboa Centre for Economics.
    7. J. Alonso-Meijide & C. Bowles & M. Holler & S. Napel, 2009. "Monotonicity of power in games with a priori unions," Theory and Decision, Springer, vol. 66(1), pages 17-37, January.
    8. Heikki Kauppi & Mika Widgrén, 2009. "The Excess Power Puzzle of the EU Budget," Discussion Papers 45, Aboa Centre for Economics.
    9. Kauppi, Heikki & Widgren, Mika, 2007. "Voting rules and budget allocation in the enlarged EU," European Journal of Political Economy, Elsevier, vol. 23(3), pages 693-706, September.
    10. García-Valiñas, Maria A. & Zaporozhets, Vera, 2015. "Key-drivers of EU budget allocation: Does power matter?," TSE Working Papers 15-548, Toulouse School of Economics (TSE).
    11. Jorge Núñez Ferrer & Jacques Le Cacheux & Giacomo Benedetto & Mathieu Saunier & Fabien Candau & Claude Emonnot & Florence Lachet-Touya & Jorgen Mortensen & Aymeric Potteau & Igor Taranic, 2016. "Study on the potential and limitations of reforming the financing of the EU budget
      [Perspectives et limites pour réformer le financement du budget de l’UE]      ," Working Papers hal-01848029, HAL.
    12. Widgrén, Mika, 2008. "The Impact of Council Voting Rules on EU Decision-Making," Discussion Papers 1162, The Research Institute of the Finnish Economy.
    13. Badinger, Harald & Mühlböck, Monika & Nindl, Elisabeth & Reuter, Wolf Heinrich, 2014. "Theoretical vs. empirical power indices: Do preferences matter?," European Journal of Political Economy, Elsevier, vol. 36(C), pages 158-176.
    14. van Gruisen, Philippe & Crombez, Christophe, 2021. "The Commission and the Council Presidency in the European Union: Strategic interactions and legislative powers," European Journal of Political Economy, Elsevier, vol. 70(C).
    15. Massimo Bordignon & Simona Scabrosetti, 2016. "The Political Economy of Financing the EU budget," Working papers 42, Società Italiana di Economia Pubblica.
    16. Kai Gehring & Stephan A. Schneider, 2018. "Towards the Greater Good? EU Commissioners' Nationality and Budget Allocation in the European Union," American Economic Journal: Economic Policy, American Economic Association, vol. 10(1), pages 214-239, February.
    17. Widgren, Mika & Kauppi, Heikki, 2008. "Do Benevolent Aspects Have Room in Explaining EU Budget Receipts?," CEPR Discussion Papers 6778, C.E.P.R. Discussion Papers.
    18. Zineb Abidi & Matthieu Leprince & Vincent Merlin, 2020. "Power Inequality in Inter-communal Structures: The Simulated Impact of a Reform in the Case of the Municipalities in Western France," Post-Print halshs-02996998, HAL.
    19. Kauppi, Heikki & Widgrén, Mika, 2008. "Do Benevolent Aspects Have Room Explaining EU Bydget Receipts?," Discussion Papers 1161, The Research Institute of the Finnish Economy.
    20. Diego Varela & Javier Prado-Dominguez, 2012. "Negotiating the Lisbon Treaty: Redistribution, Efficiency and Power Indices," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 6(2), pages 107-124, July.
    21. Běla Plechanovová, 2011. "The EU Council enlarged: North-South-East or core-periphery?," European Union Politics, , vol. 12(1), pages 87-106, March.
    22. Loek Groot & Erik Zonneveld, 2013. "European Union Budget Contributions and Expenditures: A Lorenz Curve Approach," Journal of Common Market Studies, Wiley Blackwell, vol. 51(4), pages 649-666, July.
    23. Vera Zaporozhets & Mar'ia Garc'ia-Vali~nas & Sascha Kurz, 2015. "Key drivers of EU budget allocation: Does power matter?," Papers 1512.01267, arXiv.org.
    24. de Mouzon, Olivier & Laurent, Thibault & Le Breton, Michel, 2020. "One Man, One Vote Part 2: Measurement of Malapportionment and Disproportionality and the Lorenz Curve," TSE Working Papers 20-1089, Toulouse School of Economics (TSE).

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    More about this item

    Keywords

    EU budget; voting power; Constitutional Treaty; Treaty of Nice;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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