Gradualism and uncertainty in international union formation: The European Community’s first enlargement

Abstract

This paper introduces a new theoretical framework of international unions qua coalitions of countries adopting a common policy and common supranational institutions. I make use of a three-country spatial bargaining game of coalition formation, in order to examine the endogenous strategic considerations in the creation and enlargement of international unions. Why would we observe a gradualist approach in the formation of the grand coalition even if the latter is assumed to be weakly efficient? I propose asymmetric information about the benefits of integration as a mechanism that can generate gradual union formation in equilibrium. As it turns out, it may well be in the 'core' countries' interest to delay the accession of a third, 'peripheral' country in order to (1) stack the institutional make-up of the initial union in their favor and (2) signal their high resolve to wait out the expansion of their bilateral subunion. A related case from the European experience provides an interesting illustration.

Unilateral Influence on International Bureaucrats

“…Distributional conflict surrounds constraints on agent autonomy, so the European principal–agent problem has dimensions that Pollack (1997) fails to acknowledge. Indeed, an important theme in the history of European integration are pervasive disagreements between major member states, such as Germany and Great Britain, on how centralized the union should be (Konstantinidis 2008; Slapin 2009).…”

Domestic reform as a rationale for gradualism in international cooperation

“…While many scholars have argued that gradualism can result from dynamic 'preference transformation' or 'identity change,' these constructivist processes have not been rigorously modeled (Chayes and Chayes, 1995;Downs, 2000;Osgood, 1962;Wendt, 1994). While political economists mostly emphasize informational or monitoring issues (Dai, 2002;Urpelainen, 2009), the present analysis provides a new dynamic enforcement rationale (Konstantinidis, 2008;Langlois and Langlois, 2001). My paper is not the first to explain gradualism, but it provides a new strategic explanation.…”

“…The European Commission and the European Parliament now interfere extensively with member state sovereignty (Pollack, 1997). The membership and scope of the union have expanded while international cooperation has grown deeper in many issue areas (Downs et al, 1998;Konstantinidis, 2008). Other essential multilateral regimes that have evolved gradually are the multilateral trade regime and the international climate regime (Aldy and Stavins, 2007;Hudec, 1993).…”

How uncertainty about outside options impedes international cooperation

“…One solution is to insist on deep international cooperation -despite major distributional implications -but compensate the losers up front (Carrubba 1997;Alesina, Angeloni, and Etro 2005;Barberà and Jackson 2006;Konstantinidis 2008). One solution is to insist on deep international cooperation -despite major distributional implications -but compensate the losers up front (Carrubba 1997;Alesina, Angeloni, and Etro 2005;Barberà and Jackson 2006;Konstantinidis 2008).…”

“…If states expect international cooperation to carry distributional implications, how can the anticipated losers be enticed to participate? One solution is to insist on deep international cooperation – despite major distributional implications – but compensate the losers up front (Carrubba 1997; Alesina, Angeloni, and Etro 2005; Barberà and Jackson 2006; Konstantinidis 2008). For example, powerful states could offer foreign aid to weak states in exchange for economic reform that allows the expansion of international business.…”