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Voting Rules and Budget Allocation in an Enlarged EU

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  • Kauppi, Heikki
  • Widgrén, Mika

Abstract

The 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 largely be explained by measures of the distribution of voting power in the Council of Ministers deciding on the bulk of EU spending. Yet, empirical analysis also indicates that the needs of the member states play a role in the determination of their receipts from the EU budget. As a rough estimate, power explains 60% of the budget allocation and, when stable coalition structures among member countries are allowed, even 90%. In this paper we use such estimates to predict EU budget shares after the eastern enlargement. We compare incumbent member states' predicted budget receipts before and after eastern enlargement, and examine the impact of different voting rule proposals on predicted budget shares and receipts in EU-25. 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. In relative terms, Germany would be the biggest winner under CT, because under CT population counts more on power than under NT voting rules.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5134.

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Date of creation: Jul 2005
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Handle: RePEc:cpr:ceprdp:5134

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Keywords: constitutional treaty; EU budget; Treaty of Nice; voting power;

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References

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  1. Heikki Kauppi & Mika Widgrén, 2004. "What determines EU decision making? Needs, power or both?," Economic Policy, CEPR & CES & MSH, vol. 19(39), pages 221-266, 07.
  2. Richard E. Baldwin & Joseph F. Francois & Richard Portes, 1997. "The costs and benefits of eastern enlargement: the impact on the EU and central Europe," Economic Policy, CEPR & CES & MSH, vol. 12(24), pages 125-176, 04.
  3. Baldwin, Richard & Widgrén, Mika, 2004. "Winners and Losers Under Various Dual Majority Rules for the EU Council of Ministers," CEPR Discussion Papers 4450, C.E.P.R. Discussion Papers.
  4. Federico Valenciano & Annick Laruelle, 2000. "- Shapley-Shubik And Banzhaf Indices Revisited," Working Papers. Serie AD 2000-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  5. Dan S Felsenthal & Moshé Machover, 2004. "Analysis of QM rules in the draft constitution for Europe proposed by the European Convention, 2003," Social Choice and Welfare, Springer, vol. 23(1), pages 1-20, 08.
  6. Anderson, Kym & Tyers, Rodney, 1993. "Implications of EC Expansion for European Agricultural Policies, Trade and Welfare," CEPR Discussion Papers 829, C.E.P.R. Discussion Papers.
  7. Bernard M. Hoekman & Togan Sübidey, 2005. "Turkey : Economic Reform and Accession to the European Union," World Bank Publications, The World Bank, number 7494, October.
  8. Moshé Machover & Dan S. Felsenthal, 2001. "The Treaty of Nice and qualified majority voting," Social Choice and Welfare, Springer, vol. 18(3), pages 431-464.
  9. Baldwin, Richard & Berglöf, Erik & Giavazzi, Francesco & Widgrén, Mika, 2000. "EU Reforms for Tomorrow’s Europe," CEPR Discussion Papers 2623, C.E.P.R. Discussion Papers.
  10. Leech, Dennis, 2002. " Designing the Voting System for the Council of the European Union," Public Choice, Springer, vol. 113(3-4), pages 437-64, December.
  11. Laruelle, Annick & Widgren, Mika, 1998. " Is the Allocation of Voting Power among EU States Fair?," Public Choice, Springer, vol. 94(3-4), pages 317-39, March.
  12. Baldwin, Richard & Widgrén, Mika, 2005. "The Impact of Turkey's Membership on EU Voting," CEPR Discussion Papers 4954, C.E.P.R. Discussion Papers.
  13. Kauppi, Heikki & Widgrén, Mika, 2005. "Voting Rules and Budget Allocation in an Enlarged EU," CEPR Discussion Papers 5134, C.E.P.R. Discussion Papers.
  14. Baldwin,Richard & Haapararanta,Pertti & Kiander,Jaakko (ed.), 1995. "Expanding Membership of the European Union," Cambridge Books, Cambridge University Press, number 9780521481342, October.
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Cited by:
  1. Kauppi, Heikki & Widgrén, Mika, 2005. "Voting Rules and Budget Allocation in an Enlarged EU," CEPR Discussion Papers 5134, C.E.P.R. Discussion Papers.
  2. 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.

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