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Supranational Governance:
The Institutionalization of the European Union
Wayne Sandholtz and Alec Stone Sweet *
Center for German and European Studies, University of California at Berkeley
Political Relations and Institutions Research Group
Working Paper 2.42
November 1996
Abstract
We posit a continuum of modes of governance, anchored at the poles by intergovernmental and supranational politics. Movement from intergovernmental politics toward the supranational pole implies the increasing importance of three factors in EU policymaking: EU rules, EU organizations, and transnational society. We propose that an increase in one of the three factors creates conditions that favor growth in the other two. We also offer a theory as to what drives initial movement toward supranational governance: increasing levels of cross-border transactions and communications by societal actors will increase the perceived need for European-level rules, coordination, and dispute resolution mechanisms. The theory provides a coherent answer to the question of why integration proceeds faster in some domains than in others. We expect movement toward supranational governance in sectors where the intensity and value of cross-border transactions is rising.
The European Union has attracted more scholarly attention than any international organization in world history. We know why: the EU, born as a treaty-based regime, has evolved into a quasi-federal polity. This remarkable transformation has fascinated scholars, not least, because of the challenge of understanding the reciprocal impact, over time, of international and domestic systems of governance. Our project constitutes a collective response to that challenge.
Our collaboration also reflects recent important changes in the study of European integration. Under the banner of "intergovernmentalism," international relations scholars remain prevalent in the field, but their dominance has eroded. They now share the terrain with a growing number of scholars whose expertise is in comparative politics and public law. When intergovernmentalists observe the EU, they tend to see something akin to an international regime, a forum for bargaining among representatives of national governments. Hence the adaptation of "modified-structuralist" and "liberal" regime theory to explain European integration. 1 Comparativists tend to see in the EU a polity that looks and behaves rather like many domestic political systems, and analyze it accordingly. Hence the proliferation of studies in which the EU is characterized as a confederation, a system of multi-tiered or multi-level governance, or a complex of policy networks. 2 When lawyers observe the EU, they see constitutional, not international law, and the construction of a legal system that is more like than unlike the Canadian, the Swiss, and legal systems of other federal states. 3 This project brings together students of international relations, comparative politics, federalism, public law, organizational theory, and the new institutionalism.
The group met, in workshop settings, three times between June 1994 and June 1996. A common dissatisfaction with contemporary research on European integration animated our discussions, which focused on the failure of this research to explain varying levels of integration over time and across policy sectors. The group worked to develop a framework -- a common vocabulary and heuristic - for understanding the dynamics of integration. It then sought to transform this framework into a coherent theory of integration.
In this introduction, we provide an overview of the group's deliberations. We begin by situating the project in terms of relevant theoretical debates about EU politics. We argue that neither intergovernmental nor federalist approaches have been able to produce a satisfactory theory of the dynamics of integration, despite their proven capacity to describe or explain aspects of EU politics. We then present the group's heuristic framework and advance some initial propositions. In the final section we preview the subsequent empirical chapters. Our contention is that European integration ought to be conceived as the process by which supranational governance emerges and is institutionalized. Our collective aim is to show why and how this institutionalization transforms state-to-state politics into supranational governance.
The primary divide in theorizing about European politics is between intergovernmentalist approaches and multi-tiered governance -- or federalist -- approaches. Of course, endless nuances and subtle distinctions exist within each approach, but in the end most theorizing endorses either the following statement or its opposite: states control the integration process and neither supranational institutions nor transnational actors have a significant autonomous impact.
Imageries, too, differ. For intergovernmentalists, European politics are rather like conventional international relations. Common policies reflect the distribution of interests and relative power of the member states; outcomes are produced by state-to-state bargaining conducted by egoistic executives who seek gains from cooperation and the enhancement of their own autonomy. Executives, or chiefs of government, mediate between domestic politics and bargaining at the EU level. In order to achieve their objectives, member-state governments delegate some functions to supranational organizations such as the Commission and the European Court of Justice (ECJ). These bodies then either pursue the integrative agenda of the dominant states, or are reined in if they pursue their own agendas. 4
We label the contrasting approach "federalist" not because its advocates have chosen that name, but because it reflects their central metaphor: the EU is like a federation or confederation with strong constituent states. Policy-making takes place not within a club of national executives, but in networks that include state, sub-state, non-state, and EU actors. Because of their privileged position within these networks, EU organizations possess meaningful autonomy and influence outcomes. Thus, the domain of supranational politics is not either "domestic" or "international' politics. Politics, instead, occurs simultaneously in multiple arenas that span state boundaries (transnational and transgovernmental politics) and levels or competence (local, regional, national, supranational). 5
In fact, intergovernmentalists and federalists commonly study different phenomena. Intergovernmentalists focus on the grand bargains, like the Treaty of Rome, the Single European Act, or the Maastricht treaty. History-making agreements are the moments in which the EU has been formally constituted or reconfigured. Summits and intergovernmental conferences frame intervening periods of consolidation. In contrast, federalists tend to analyze how day-to-day policy is actually made. Integration is produced by the sustained interactions of individuals, groups, and public authorities within given policy sectors. Neither emphasis has provided an adequate basis for theorizing the dynamic process of integration over time. The intergovernmentalist depicts an EU in which the institutions and rules evolve but nothing essential changes: state preferences and power determine outcomes, and interactions between national executives are the locus of politics. The federalist regards the EU as a multi-tiered system of governance, and seeks to explain policy processes in specific sectors. But federalist approaches have not offered a theory-based account of how multi-level governance emerges, or why it emerges in some rather than other policy sectors.
We nonetheless side with the federalists in believing that the EU has evolved into something more than a bargaining forum for national executives. Before clarifying how our theoretical framework differs from that of intergovernmentalism, we need to clear away some false issues.
First, we do not argue that governments are unimportant in the EU. The member states are repositories of immense resources, both material (e.g., financial) and non-material (e.g., legitimacy). In the EU, executives pursue what they take to be their own interests, expressed as national interests. The larger states command greater resources and tend to wield greater influence on EU policy outcomes than the smaller states. Accepting these truisms does not entail accepting intergovernmentalism. The negation of the intergovernmentalist claim, "State preferences and power explain all EU outcomes," is not "State preferences and power do not explain EU outcomes," but rather "State preferences and power do not explain all EU outcomes." One of our central points is that member-state governments do not always control integration processes because integration produces powerful political and institutional constraints on governments.
Second, the observation that interstate bargaining is ubiquitous in the EU does not settle theoretical controversy. Summitry, intergovernmental conferences, and tough, interest-driven negotiation among executives is a staple of policymaking in Canada and many other federal systems. In federal polities, as in the EU, intergovernmental bargaining coexists with other modes of policymaking, including those performed by legislatures and courts. And in federalism, as in the EU, the preferences that executives bring to intergovernmental bargaining are shaped in part by membership in the federation and the experience of political integration. In the EU, integration produces rules, organizational capacities, and a variety of non-state actors with a stake in intra-EU transactions, all of which powerfully influence what states want and expect from integration. 6 Intergovernmentalism does not capture this dynamic.
Third, one of the alleged fatal flaws in neo-functionalism was that events falsified its major prediction, namely, that spillovers lead to the steady advance of integration. Neo-functionalists acknowledged that there was no place in their theory for De Gaulle, who stood for the ever-present potential of national identity and interests to halt integration. 7 Intergovernmentalists highlight the obstinacy of nation-states and the primacy of national interests; they expect De Gaulles and Thatchers. There is a general supposition that the stagnation of the EC during the 1970s, when integration apparently made no advances, is compatible only with an intergovernmentalist interpretation. 8 Indeed, neo-functionalists themselves abandoned their project as the 1970s seemed to confound their expectations, leaving the field to intergovernmentalism, at least until recently.
Intergovernmentalists do not refute neofunctionalists by noticing that integration seems to proceed in a stop-and-go manner. These patterns need to be explained. It is also not enough to show that some integration happens when member-state preferences converge (as they did for the SEA), and some integration stalls when preferences diverge. To the extent that the statement is true, it pushes the question back one step. Why do state preferences, in particular areas at particular times, sometimes converge and sometimes diverge? There is no theory-based answer in intergovernmentalism.
More important to our concerns, we do not read the story of European integration as one of stop-and-go, at least not in any general or comprehensive sense. At the height of De Gaulle's power in the 1960s, the ECJ moved aggressively to "constitutionalize" the treaties. In the worst days of "Eurosclerosis" in the 1970s, levels of intra-EU trade and other forms of exchange shot upward. And before the famous "relaunching" of Europe in the 1980s, European political cooperation, the European Council, and the European Monetary system all were born. Integration always proceeded, in some sectors and from some vantage points, despite the Luxembourg compromise and despite the divergence of state preferences.
In short, the power and importance of the member states, the pervasiveness of interstate bargaining in the EU, and the supposed stagnation of the 1970s do not in and of themselves define the contours of our debate with intergovernmentalists. Rather, our dissatisfaction with intergovernmentalist accounts of European integration reduces to the following three points:
- The intergovernmentalist account is static. Intergovernmentalists largely ignore what we take to be the core content of the integration process: the dynamic by which EU governance is institutionalized.
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Intergovernmentalism fails to capture how the process of institutionalization shapes member-state preferences and constrains member-state choice.
- For intergovernmentalists member-state governments are the crucial actors in EU politics. Neither EU organizations nor transnational actors have a significant independent impact on policies. We argue that integration is, among other things, the development of an autonomous capacity for EU organizations, and the construction of EU policy arenas that non-state actors may enter directly, not solely through their national governments.
- Intergovernmentalism holds that member states control the course of integration. In contrast, we contend that states are not always able to control EU outcomes. We argue that as the institutionalization of a supranational mode of governance proceeds, member-state control becomes increasingly imperfect; at a certain point, governments may even be more reactive than proactive, pushed to respond by the integration that is happening all around them.
Our starting point is a continuum that stretches between two ideal-typical modes of governance: the intergovernmental (the left hand pole), and the supranational (the right hand pole).
Note: From left to right, the continuum measures the increasing influence of three factors on policymaking processes and outcomes within any given policy sector. These factors are: 1) supranational organizations, 2) supranational rules, and 3) transnational society.
One pole is constituted by intergovernmental politics. The central players in intergovernmental politics are the national executives of the member states, who bargain with each other to produce common policies. Bargaining is shaped by the relative powers of the member states, but also by state preferences, which emerge from the pulling and hauling among domestic groups. These preferences are then given agency, as negotiating positions, by national executives in EU organizations such as the Council of Ministers. The EU level of governance operates as an international regime in the functional, transaction-costs mode: it is a "passive structure" that enhances the efficiency of interstate bargaining. 10
The other pole is constituted by supranational politics. A "supranational" mode of governance is one in which centralized governmental structures (those organizations constituted above the member-states by treaty), possess jurisdiction within the territory governed by those member states, and are capable of constraining member-state behavior by the exercise of that jurisdiction. The term "federal politics" would not be inappropriate. We use the term "supranational," in part, to emphasize that the EU is an international organization, and that EU politics is a form of international politics. And we have avoided using the term "federal" here in order to avoid an argument about the precise nature of the EU polity and how it compares with other federal polities. In supranational politics, member-state governments bargain with one another all the time. But for any given policy process underway in the supranational mode, member states may not be central or even present. Movement from left to right along the continuum indicates that a shift away from intergovernmentalism, and toward supranationalism, has taken place.
In principle, the continuum is capable of situating -- and therefore of characterizing -- all international regime forms as sites (more or less) of intergovernmental or sites (more or less) of supranational politics. Unlike most regimes, which tend to organize interstate cooperation in one or a few closely related sectors, the EU possesses differing degrees of competence across a diverse range of policy areas. In principle, one could use the continuum to characterize the development of the EU as a whole, in terms of the composite picture of all policy areas. One could also use the continuum to chart the comparative development or lack of development of different policy sectors comparatively. Thus, policy sector A may be located at point 2, shading toward two-level politics, while policy sector B may be located at point 4, exhibiting strong features of supranationalism. Used in this way, the continuum asserts that there are potentially many EUs. As discussed in the next section, we hope that by disaggregating EU governing processes by policy sector, we will be able to learn more about the nature of European integration than we can by working to characterize, in a blanket fashion, the EU as an "intergovernmental" or "supranational' regime.
The continuum measures the movement from intergovernmental to supranational governance in three interrelated dimensions:
- EU rules: the legal, and less informal, constraints on behavior produced by interactions among political actors operating at the European level;
- EU organizations: those governmental structures, operating at the European level, that produce, execute, and interpret EU rules; and
- transnational society: those nongovernmental actors who engage in intra-EC exchanges -- social, economic, political -- and thereby influence, directly or indirectly, policymaking processes and outcomes at the European level.
We understand these dimensions to be crucial indicators of levels of integration in the EU. By "integration," we mean the process by which the horizontal and vertical linkages between social, economic, and political actors emerge and evolve. Vertical linkages are the stable relationships, or patterned interactions, between actors organized at the EU level and actors organized at the member-state level. Horizontal linkages are the stable relationships, or patterned interaction, between actors organized in one member state with actors organized in another. We understand these linkages to be "institutionalized" to the extent that they are constructed and sustained by EU rules, EU organizations, and transnational exchange.
First, as we move from left to right along the continuum the influence of EU (or supranational) organizations on policymaking processes and outcomes increases. EU organizations include the Commission, the Court of Justice, the Parliament, and even at times the Council of Ministers. As we move right, these organizations reveal greater capacities to influence political processes and to produce political outcomes. At the left-hand pole, the regime's organizations possess little if any meaningful autonomy from the most powerful member-states. They function to provide a forum for state-to-state bargaining and for logistical coordination (they lower information and contracting costs). At point 3 on the continuum, supranational organizations may often be the source of successful policy innovation, a form of "relative" -- but meaningful -- autonomy. At the supranational pole, institutions at times exercise substantial autonomy, as when they are able to innovate, in policy relevant ways, in the face of member state indifference or hostility.
The second dimension built into the continuum is legal-normative. As we move from left to right along the continuum, EU rules achieve higher degrees of clarity and formalization. At the far left of the continuum, rules are few and weak; they do not trump individual state interests that conflict with them. As we move along the continuum, rules stabilize state bargaining, delegitimize exit, and -- at the level of law -- lay down binding standards of conduct enforceable by courts. Many of the rules governing EU policymaking are behavioral, that is, they have resulted from many years of constant interaction between state and supranational officials in a myriad of settings. But many of these rules are also highly formal, codified in treaty law, secondary legislation, and the ECJ's jurisprudence.
The third dimension captured by the continuum is the presence and influence of transnational actors -- interest groups, business, knowledge-based elites -- on policy processes and outcomes. In intergovernmental politics, the executives mediate between domestic actors and supranational organizations and rules. In supranational politics, transnational actors have a choice of forums in which to exert their influence. They may target national governmental structures --executive, legislative, or judicial -- as well as supranational organization, and they may play one level off against the other.
Taken together, these dimensions are constitutive of supranational politics. In their absence, supranational governance does not exist. The group believes that these three factors move together, and that disjunctures that do occur in movement are short-lived. In domestic political systems, organizations, rules, and social exchange are closely linked. Organizations define roles for social actors, and transmit and diffuse the rules that guide their behaviors. Organizations empower some actors more than others, creating -- and foreclosing -- channels of political activity and influence. Changes in society (demographic, cultural, economic) can provoke adjustments in organizational forms and capacities, exerting pressure on rules to change.
Organizations, rules, and social exchange are similarly connected in supranational politics. Organizations produce and transmit the rules that guide social interaction. They structure access to policy processes, defining political power and privileging some parts of society more than others. As supranational organizations acquire and wield autonomy, they are able to shape not only specific policy outcomes but also the rules that channel policymaking behaviors. As supranational organizations and rules emerge and solidify, they constitute transnational society by establishing bases for interaction and access points for influencing policy. As transnational society endures and expands, the organizations and rules that structure behaviors become more deeply rooted as "givens," taken for granted as defining political life. Growth in one element of the supranational trio (organizations, rules, transnational society) creates conditions that favor growth in the other two. An expansion of the tasks or autonomy of supranational organizations creates opportunities for political action, which actors and groups will seek to exploit, thus expanding transnational society. As societal actors adjust their behaviors in response to new supranational rules, these rules are locked-in. If broader, global trends promote the growth of transnational society, there will be a corresponding demand for increased organizational capacity and rules to coordinate and to guide interactions.
The continuum gives us tools with which to describe EU governance. We have also offered a proposition that would account for some of the dynamics of integration, namely, that movement in any one of the dimensions will tend to produce movement in the other two. In other words, there is an internal dynamic of institutionalization. But important questions remain to be theorized. Why does movement on any of the dimensions occur in the first place? Why do some policy domains move farther and faster toward the supranational pole than others? In this section we offer a theoretical account that can generate answers to such questions. We should note that some members of the project retain reservations about some of the claims we advance.
Theoretical precursors Our theory partly redeploys the combined insights of two of the founders of integration theory, Karl Deutsch and Ernst Haas. On crucial questions, we believe, they got it right. What we find complementary are Deutsch's emphasis on social exchange -- communication and transactions -- and Haas's attention to political choice and the development of supranational institutions.
Deutsch and his collaborators held that increasing density of social exchange among individuals over prolonged periods of time produces assimilation, which leads to the development of communities (groups of people with a sense of "we-feeling" or shared identity). High levels of exchange between communities lead to the assimilation of groups, and in turn to the integration of communities. Such social integration can, but need not, eventually result in political "amalgamation," or the creation of a super-state with centralized institutions. 11
We agree that social exchange is the crucial causal factor driving integration processes. What we will argue is that exchange across national borders creates the need for supranational rules and for higher levels of organizational capacity. If this demand is not supplied, the development of higher levels of exchange will be stunted. We set aside Deutsch's concern with the formation of communities and identities, and the issue of whether or not identity formation precedes political amalgamation. Our dependent variable remains mode of governance, for the EU as a whole or for specific policy areas, not the construction of a EU identity.
Haas conceived of integration as the product of interest-driven politics. 12 Mitrany had theorized what would happen when policy problems transcended national borders: functions would steadily migrate from national governments, who act on the basis of politics, to global technocrats, who act on the basis of expertise. Haas recognized that the transfer of functions to supranational bodies would always be intensely contested, as some groups foresaw gains while others expected losses from integration. He consequently saw the construction of supranational authority as central to the integration problematique. Stripped down, Haas's neo-functionalist argument runs something like this. Some elite groups (leadership of political parties, industry associations, and labor federations) begin to recognize that problems of substantial interest cannot be solved at the national level but rather require common action by multiple states. These groups begin to push for the transfer of policy competence to a supranational body. National elites with parallel interests find each other and establish cross-national coalitions. If pro-integration elites are able to mount sufficient political leverage, governments establish supranational institutions.
Once supranational institutions are born, a new dynamic emerges. Haas pioneered in theorizing the logic of supranational institutionalization. He suggested a dynamic process: the creation of supranational authority' leads to changes in social expectations and behavior, which feeds back into supranational policy-making, and so on. As supranational authorities begin to deliver the coordinative solutions that pro-integrationists hoped for, they become the locus for a new kind of politics. Groups increasingly seek influence over supranational policies, opening new channels of politics. Supranational organizations acquire expertise, information, and legitimacy, which reinforce their authority. The outcome is a dynamic in which integration leads to further integration: "Since the intergovernmental machinery, under the institutional logic of the common market and the ideological impulsion of political and economic expectations released by earlier integration measures, has moved strikingly in the direction of certain federal decision-making methods, there is no reason for thinking that the new European institutions will not carry this process further." 13 As we noted earlier, the conclusion that the 1970s invalidated this prediction was probably premature, given the significant integration that occurred between the empty-chair crisis and the "relaunching" of the 1980s.
The three dimensions of our continuum are all prefigured in neo-functionalist theory: the role of supranational rules in solving policy problems shared across borders; the emergence of transnational society; and the impact of supranational organizations with meaningful autonomy. Particularly important is the insight that supranational policy-making (governance, in our terminology) generates a dynamic process of institutionalization. In contrast with Haas, however, we define our outcome as supranational governance, not political integration. We leave as an open question whether or not the loyalties and identities of actors will shift over time to the European Union. There is substantial room for supranational governance even without an ultimate transfer of identification. We will also specify slightly differently the origins of the interest in integration, which we argue arises out of transactions and communication across national borders within Europe. Finally, we will respecify spillovers, again tying them to societal transactions, so as to theorize differences across issue areas in their movement toward supranational governance.
A theory of integration Our starting point is society, in particular, non-state actors who engage in transactions and communications across national borders, within Europe. These are the people who need European standards, rules, and dispute resolution mechanisms -- who need integration. The causal mechanism is quite simple: increasing levels of cross-border transactions and communications by societal actors will increase the perceived need for European-level rules and coordination. In fact, the absence of European rules and coordination will come to be seen as an obstacle to the generation of wealth. The existence of separate national jurisdictions creates numerous transaction costs for those who wish to engage in exchanges across borders: customs and other border controls, differing technical standards, divergent health and environmental regulations, distinct systems of commercial law, diverse national currencies, and so on. The costs of transacting across borders are higher than those involved in contracting within a single member-state, other things being equal, to the extent that there exists no secure common legal framework at the supranational level, comparable in its efficacy to that of national legal systems. Therefore, as the involvement (real or desired) of private actors in cross-border exchanges increases, so does the societal demand for integration.
The theory implies a coherent answer to one of the most perplexing questions in the study of European integration, namely, Why does integration proceed faster or farther in some policy areas than in others? We would look to variation in the levels of cross-border interactions and in the consequent need for supranational coordination and rules. In sectors where the intensity and value of cross-national transactions are relatively low, the demand for EU-level coordination of rules and dispute resolution will be correspondingly low. Conversely, in domains where the number and value of cross-border transactions are rising, there will be increasing demand on the part of the transactors for EU-level rules and dispute-resolution mechanisms. It makes sense, then, that the EU has moved farthest toward the supranational pole with respect to managing the internal market (reduction of formal barriers and border controls, competition policy, mutual recognition, and so on). Intra-EU trade and investment have grown steadily since the founding of the EEC, creating the need for greater degrees of supranational governance in issue areas closely linked to expanding the common market. In contrast, there are few societal transactions that are impeded by the absence of a common foreign and security policy. Or, put differently, though some argue for the political benefits that CFSP would bring, few societal transactors find its absence costly. There is therefore minimal social demand for integration in that issue area.
The theory also allows us to explain the general direction of integration in the common market. Business is likely to be the segment for which the material stake in cross-border transactions is greatest and most obvious. Companies with an interest in cross-national sales or investment will press for the reduction of national barriers, and for the establishment of regional rules and standards. By the same token, the consequences of integration for people in their roles as workers and consumers are less transparent. This would explain why European companies have had a greater impact on integration than have labor or consumers. 14 We can thus account for the decisively neo-liberal (pro-market) character of recent events like the 1992 program and the Maastricht provisions on EMU. If integration is driven fundamentally by private transactors, and if capital is the group with the most obvious stake in intra-EC transactions (not to mention the resources required for political influence), it is not surprising that the major steps in integration should be congenial to those segments of business.
State actors clearly have their own interests, which usually include maximizing their autonomy and control over resources. They will therefore frequently resist the shift toward supranational policy making. But as they do so, they inhibit the generation of wealth within their territories by those actors that depend on European transactions. Such resistance is therefore sustainable only at a cost in prosperity. 15 In a basic sense, then, states can attempt to slow integration or push it in directions favorable to their perceived interests, but they do not drive the process nor fully control it. Some of the group would argue that states are fundamentally reactive to the integration that occurs all around them in the form of societal transactions and communications.
We can now also respecify the spillover mechanism. As formal border controls on the movement of goods, capital and persons are reduced, new obstacles to cross-border transactions are revealed and become salient. With the removal of tariffs and quotas, differences in national regulatory standards -- for the environment, health and safety, technical compatibility, and so on --become more apparent as obstacles to exchange. Economic actors seeking to benefit from intra Community exchange will then target these obstacles, both by attacking regulatory barriers through litigation and by pressuring EU legislative institutions to widen the jurisdiction of the EU into new domains. As governments and EU institutions respond, spillover occurs.
Globalization, which is integration of a broader geographic scope, can also stimulate movement toward increased supranational governance within Europe. The integration of national markets (for goods, services and capital) and multilateral approaches to global problems (ozone, climate change, weapons proliferation) can create pressures for integration from above the nation-state. Transnational actors are sometimes the conduit through which globalization stimulates advances in European integration. For instance, with the goal of increasing their competitiveness in world markets, European multinationals pressed for active EC high-technology programs (ESPRIT, RACE) as well as the creation of a genuine internal market (1992). 16 But globalization can also exert pressure directly on EU institutions. For example, the involvement of the EU in global environmental negotiations sometimes leads to an expansion of Commission competencies and roles. 17
Finally, whether the impetus for integration comes primarily from transactors seeking to facilitate profitable intra-European exchanges or from the effects of globalization, institutionalization generates a dynamic of its own. We suggested earlier that movement toward supranational governance on one of the dimensions will generally lead to parallel movement on the other two dimensions. But there is a broader sense in which institutionalization is recursive. As European rules emerge and become codified and European organizations become a locus for policy-making, they shape the context for subsequent interactions: how actors define their interests, what avenues are available to pursue them, how disputes &e to be resolved. This creates the "loop" of institutionalization. Developments in EU rules, organizations and transnational society delineate the contours of future policy issues as well as the normative and organizational terms in which they will be decided. Societal actors involved in intra-European transactions need Europe-level rules and institutions. They make use of existing rules and institutions so as to further their own ends, thereby altering the normative and institutional context for later interactions. 18
Note *:
Wayne Sandholtz, Dept. of Politics and Society, University of California, Irvine
Alec Stone Sweet, Dept. of Politics and Society, University of California, Irvine Back.
Note 1: Geoffrey Garrett, "International Cooperation and Institutional Choice: The European Community's Internal Market," International Organization, vol.46 (1992), pp.533-60; Andrew Moravcsik, "Preferences and Power in the European Community: A Liberal Intergovernmentalist Approach," Journal of Common Market Studies, vol.31 (1993), pp.473-524. Back.
Note 2: Alberta M. Sbragia, "The European Community: A Balancing Act," Publius, vol.23 (1993), pp.23-38; Stephen Leibfried and Paul Pierson, eds., European Social Policy: Between Fragmentation and Integration (Washington DC: Brookings Institution, 1995); Gary Marks, Liesbet Hooghe, and Kermit Blank, "European Integration from the 1980s: State-Centric v. Multi-level Governance," Journal of Common Market Studies, vol.34(1996), pp.342-78; John Peterson, "Decision-making in the European Union: Towards a Framework for Analysis," Journal of European Public Policy, Vol.2 (1995), pp.69-93. Back.
Note 3: Renaud Dehousse, "Integration v. Regulation? On the Dynamics of Regulation in the European Community," Journal of Common Market Studies, vol.30 (1992), pp.383-402; Koen Lenaerts, "Constitutionalism and the Many Faces of Federalism," American Journal of Comparative Law, vol.42 (1990), pp.347-80; Federico G. Mancini, "The Making of a Constitution for Europe," in Robert 0. Keohane and Stanley Hoffman, eds., The New European Community (Boulder: West View, 1991); Joseph Weiler, "The Community System: The Dual Character of Supranationalism," Yearbook of European Law, Vol.1(1981), pp.268-306 and "The Transfonnaflon of Europe," Yale Law Journal, vol.100 (1991), pp. 2403-83. Back.
Note 4: Paul Taylor, The Limits of European Integration (New York: Columbia University Press, 1983); Garrett, "International Cooperation and Institutional Choice"; Moravcsik, "Preferences and Power in the European Community." Back.
Note 5: Alberta M. Sbragia, "The European Community: A Balancing Act"; Giandomenico Majone, "Regulatory Federalism in the European Community," Environment and Planning C: Government Policy, Vol.10 (1992), pp. 299-316; Dehousse, "Integration v. Regulation?" Back.
Note 6: Wayne Sandholtz, "Choosing Union: Monetary Politics and Maastricht," International Organization, Vol. 47 (1993), pp. 1-39 and "Membership Matters: Limits to the Functional Approach to European Institutions," Journal of Common Market Studies, Vol.34 (1996), pp. 403-29. Back.
Note 7: Ernst B. Haas, The Uniting of Europe: Political, Social, Economic Forces, 1950-57 (Stanford: Stanford University Press, 1958); S. Hoffman, "Obstinate or Obsolete? The Fate of the Nation State and the Case of Western Europe," Daedalus, Vol.95 (1966), pp. 892-908. Back.
Note 8: Paul Taylor, The Limits of European Integration; James Caporaso and John Keeler, "The European Union and Regional Integration Theory," in Carolyn Rhodes and Sonia Mazey, eds., The State of the European Union Volume 3: Building a European Polity (Boulder: Lynne Rienner Publishers, 1995). Back.
Note 9: With the exception of an awareness of the consequences of changing constitutional rules governing the policy process, which is only part of the story. Back.
Note 10: Robert 0. Keohane, After Hegemony (Princeton: Princeton University Press, 1984); Moravcsik, "Preferences and Power in the European Community." Back.
Note 11: Karl Deutsch, Nationalism and Social Communication: An Inquirv into the Foundations of Nationality (Cambridge: MIT Press, 1953); Karl Deutsch, et al., Political Community and the North Atlantic Area: International Organization in the Light of Historical Experience (Princeton: Princeton University Press, 1957). Back.
Note 12: Haas, The Uniting of Europe. Back.
Note 13: Haas, The Uniting of Europe, p.526. Back.
Note 14: For major examples of the business role in integration, see Wayne Sandholtz and John Zysman, "1992: Recasting the European Bargain," World Politics, Vol.42 (1989), pp.95-128; Wayne Sandholtz, "ESPRIT and the Politics of International CollectiVe Action," Journal of Common Market Studies, Vol.30 (1992), pp.1-21; M.L. Green-Cowles, "The Politics of Big Business in the Single Market Program," Paper presented at the Third Biennial Conference of the European Community Studies Association, Washington DC, 1993. Back.
Note 15: Walter Mattli, "Explaining Regional Integration," Working Papers on International Society and Institutions, Global Peace and Conflict Studies Program, University of California, Irvine, 1996. Back.
Note 16: See Wayne Sandholiz, High-Tech Europe: The Politics of International Cooperation (Berkeley: University of California Press, 1992); Sandholtz and Zysman, "1992: Recasting the European Bargain." Back.
Note 17: See the contribution of Alberta Sbragia in this Volume. Back.
Note 18: Alec Stone, "The Judicialization of Policymaking and Dispute Resolution: A Comparative-National/Supranational - Analysis," paper presented at the Yale Legal Theory Workshop, 22 February 1996; Wayne Sandholtz, "Rules, Reasons and International Institutions," Paper presented at the Annual Meeting of the International Studies Association, San Diego, April 1996. Back.
