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Key drivers of EU budget allocation: Does power matter?

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  • Zaporozhets, Vera
  • García-Valiñas, María
  • Kurz, Sascha

Abstract

We examine the determinants of the EU budget allocation among Member States. In line with the analysis by Kauppi and Widgrén (2004) we test two alternative explanations: political power vs. “needs view” . To do so, we extend the original data set (1976–2001) up to 2012 and introduce alternative econometric specifications. We also put forward the nucleolus as a measure of political power in the distributive context. Our results demonstrate that both power and “needs” are important factors in explaining EU budget allocation. Political power matters, but not as much as previous studies have shown. We also conclude that the nucleolus is a good alternative to the Shapley–Shubik index which was used previously. Power is more balanced with needs under the specifications based on the nucleolus.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:poleco:v:43:y:2016:i:c:p:57-70
    DOI: 10.1016/j.ejpoleco.2016.02.004
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    Cited by:

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    2. Vigani, Mauro & Khafagy, Amr & Berry, Robert, 2024. "Public spending for agricultural risk management: Land use, regional welfare and intra-subsidy substitution," Food Policy, Elsevier, vol. 123(C).
    3. D'ora Gr'eta Petr'oczy & L'aszl'o Csat'o, 2023. "Voting power in the Council of the European Union: A comprehensive sensitivity analysis," Papers 2312.16878, arXiv.org, revised Sep 2024.
    4. repec:prg:jnlpep:v:preprint:id:698:p:1-15 is not listed on IDEAS
    5. László Á. Kóczy, 2016. "How Brexit affects European Union power distribution," Working Paper Series 1601, Óbuda University, Keleti Faculty of Business and Management.
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    7. Andrii Boiar, 2019. "Optimizing the Structure of the European UnionBudget Expenditure," Prague Economic Papers, Prague University of Economics and Business, vol. 2019(3), pages 348-362.
    8. 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 policies; Budget allocation; Political power; Nucleolus; Shapley–Shubik index;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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