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Voting Rules and Budget Allocation in an Enlarged EU

Author

Listed:
  • Heikki Kauppi

    () (Department of Economics, University of Helsinki)

  • Mika Widgrén

    () (Department of Economics, Turku School of Economics)

Abstract

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 be attributed to measures of the distribution of voting power in the Council of Ministers deciding on the bulk of EU spending. A standard power measure alone can explain about 85% of the variance of the past EU budget shares, while, if stable coalition patterns among member countries are taken into account, power can explain at least 95% of the budget allocation. In this paper we use such estimates to predict EU budget shares after the eastern enlargement. 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.

Suggested Citation

  • Heikki Kauppi & Mika Widgrén, 2006. "Voting Rules and Budget Allocation in an Enlarged EU," Discussion Papers 2, Aboa Centre for Economics.
  • Handle: RePEc:tkk:dpaper:dp2
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    File URL: http://www.ace-economics.fi/kuvat/ACE2%20Widgren.pdf
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    References listed on IDEAS

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    1. Ricahrd 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, April.
    2. 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, July.
    3. 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).
    4. Bernard M. Hoekman & Togan Sübidey, 2005. "Turkey : Economic Reform and Accession to the European Union," World Bank Publications, The World Bank, number 7494.
    5. Moshé Machover & Dan S. Felsenthal, 2001. "The Treaty of Nice and qualified majority voting," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(3), pages 431-464.
    6. 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;The Society for Social Choice and Welfare, vol. 23(1), pages 1-20, August.
    7. Kauppi, Heikki & Widgrén, Mika, 2005. "Voting Rules and Budget Allocation in an Enlarged EU," CEPR Discussion Papers 5134, C.E.P.R. Discussion Papers.
    8. Baldwin, Richard & Widgrén, Mika, 2005. "The Impact of Turkey's Membership on EU Voting," CEPR Discussion Papers 4954, C.E.P.R. Discussion Papers.
    9. Annick Laruelle & Mika Widgrén, 1998. "Is the allocation of voting power among EU states fair?," Public Choice, Springer, vol. 94(3), pages 317-339, March.
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    12. 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.
    13. 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.
    14. Leech, Dennis, 2002. "Designing the Voting System for the Council of the European Union," Public Choice, Springer, vol. 113(3-4), pages 437-464, December.
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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. Massimo Bordignon & Simona Scabrosetti, 2016. "The Political Economy of Financing the EU budget," Working papers 42, Società Italiana di Economia Pubblica.
    3. 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.

    More about this item

    Keywords

    EU budget; voting power; Constitutional Treaty; Treaty of Nice;

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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