Who has the Power in the EU?

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

2. EU Members Old Members Newly Acceding Countries • 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)

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 • afederal 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’

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

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, A B C D E right left • 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? A B C D E left right

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

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?”

32. EU 15 Preferences

33. EU 27: Preferences

34. EU 15 Pre-Nice: Measures of Power

35. EU 27 ‘Nice’

36. EU 27 Nice continued

37. EU 27 – ‘Lisbon’

38. EU 27 – ‘Lisbon’ cont

39. The democratic deficit (%)