kelemen memo
TRANSCRIPT
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Built to Last?
The durability of EU federalism
R. Daniel Kelemen1
University of Oxford
Memo prepared for conference on the 2007 volume of the EU Studies Association’s:
State of the European Union (Oxford University Press).
Princeton University, September 2005.
Most federations fail. (Lemco 1991) This should not be surprising, as federalism is an
inherently unstable institutional arrangement. Federalism divides public authority
between two levels of government, each of which may have powerful incentives to
undermine the federal system. All federal systems, the EU included,2 face “two
fundamental dilemmas” (Riker 1964; Bednar, Ferejohn and Eskridge 2001; Defigueiredo
and Weingast 2005). First, they must prevent the federal government from undermining
federalism by overreaching its competences. Second, they must prevent the constituent
states from undermining federalism by shirking on their commitments to the federation or
otherwise failing to cooperate. Institutions that help to resolve one of the dilemmas,
unfortunately, often exacerbate the other. For a federation to be durable, the division of
authority must be rigid enough to prevent one level of government from usurping the
authority of the other, while remaining flexible enough to allow for shifts in the division
of authority in response to economic, socio-cultural and political developments. In
1 Dear colleagues – Please accept my apologies for my inability to attend this meeting. I am currently conducting field research on bathing water quality at a number of secluded beaches in the Algarve. I look forward to joining in our upcoming meeting at Georgetown and would appreciate any thoughts you might have on the outline I present in this memo. 2 Those uncomfortable using the “F” word in the EU context should feel free to refer to it as a quasi-federal or federal-like system. Nevertheless, for the purposes of the analysis here, the EU has the necessary attributes of a federal system. It is striking that while many scholars of the EU continue to resist analyzing it as a federation, most contemporary students of federalism view the EU as a federal system (See for instance, Bednar, Filippov et al., McKay, Kelemen, Defigueido and Weingast).
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practice, in federations there is a continuous “ebb and flow” of authority between levels
of government and often considerable tension between them (Filippov, Ordeshook and
Shvetsova 2004; See also Donahue and Pollack 2001). Unfortunately, these ebbs and
flows can quickly turn into torrents, and tensions can explode into conflict, leading to the
collapse of many federations.
If so many federations are unstable and prone to collapse, should we expect the same fate
to befall the EU. Elated Eurosceptics and despondent Europhiles alike are quick to greet
‘crises’ such as the 2005 French and Dutch referenda as threats to the existence of the
EU. Is EU federalism indeed as fragile as much of the media coverage would suggest?
Similarly, many policy-makers and scholars have suggested that the EU’s current
institutional arrangements will not be able to cope with the enlarged EU of 25 (or more)
member states, and that fundamental institutional reforms are needed to avoid stagnation.
Are the EU’s institutional structures indeed ill-suited to the current membership and the
challenges it faces? In short, is today’s EU a fragile house of cards? Or is it built to last?
In my chapter, I will explore the sustainability of EU federalism. I will draw on recent
work on self-enforcing federalism (deFigueiredo and Weingast 2005, Bednar et al. 2001,
Filippov et al. 2004) and more general theories of institutional stability and change,
which suggest that to be sustainable over the long term an institutional arrangement must
be both self-enforcing and self-reinforcing (Greif and Laitin 2004; de figueredo and
Weingast 2005; Bednar, fortcoming). I will connect the study of institutional instability
in the EU with the study of institutional stability (Thelen 1999). Any study concerning
instability and the potential collapse of the EU must be based on conjectures and
counterfactuals, but we can provide some grounding for such conjectures by connecting
them to what we know about how the EU operates today. Ultimately, whether, and under
what conditions, one thinks the EU will fall apart, depends on what one thinks holds it
together. I propose to draw on the literature on stability and change in federal systems to
identify the sources of institutional stability in EU federalism and to assess the robustness
(or fragility) of each of these factors.
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For many students of federalism, particularly those inspired by Riker’s work on the US,
the leading threat to federalism is that an over-centralization of power would render the
autonomy of the states meaningless. In the contemporary EU, the fears of Euro-skeptic
Tories notwithstanding, there is no threat of Brussels overawing the member states. The
primary threat to the EU’s durability, rather, comes from the second dilemma of
federalism: though excessive shirking and burden-shifting, the member states may
undermine the federation. Therefore, any study of the durability of EU federalism must
focus on the threat of fragmentation and ‘explosion’, rather than on any hypothetical
threat of over-centralization and implosion.
I plan to divide the chapter into four sections. First, I will clarify the dependent variable.
Any investigation of the durability of the EU, must clarify what would constitute a
‘breakdown’ or ‘collapse’ of the current system. Second, I will explore the sources of the
EU’s institutional stability, drawing on the literature on comparative federalism to ask:
What holds the EU together? Third, I will explore potential scenarios and conditions
under which the EU might collapse and assess their plausibility. In the final section, I
conclude.
What would count as a breakdown?
Would we recognize institutional fragility if we saw it? All observers would surely agree
that the formal renunciation of the Treaties by all member states and the vacating of
offices in Brussels, Strasbourg and Luxembourg would constitute a breakdown of the EU
would constitute a breakdown of the EU. But, short of such a dramatic and unlikely
scenario, it is unclear precisely what sort of behaviors or institutional changes should be
viewed as indicators of the breakdown of EU federalism. Federations never achieve full
compliance and, as stated above, their institutions must allow for some shifts in authority
in order to be durable. In this section, I will provide a sense for the range of variation on
the dependent variable of this study by exploring behavioral and institutional changes that
might be taken as indicators of the breakdown of EU federalism. These will include (but
not necessarily be limited to):
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• Complete breakdown of the Union
• Peaceful secession of one (or a small number) of member states
• Growth of variable geometry – While many observers view variable geometry as
a threat to the institutional coherence of the EU, it is by no means clear that it is
correct to view it in this light. Variable geometry already exists in the EU, as it
does in many federations where it is labeled ‘asymmetric federalism’.
• Atrophy – an outcome in which EU institutions continue to exist in their current
form, but are increasingly ignored by governments and interest groups and cease
to be significant fora for policy-making.
• Civil War – While civil war arguably constitutes the most extreme breakdown of
a federal system, where such conflict involves the incursion of federal forces to
prevent a state government from violating the federally guaranteed rights of its
citizens, it in some respects serves to preserve the federation.
What holds the EU together?
To understand whether the EU is likely to prove durable, we must first clarify what we
think holds it together and next consider whether we think the sources of the EU’s
stability are strengthening or weakening over time. In other words, the EU must be self-
enforcing and self-reinforcing. A self-enforcing institution is one in which no player has
an incentive to deviate from the behavior associated with the institution, given their
expectations about other players’ behavior. A self-reinforcing institution is one whose
behavioral implications serve to expand the range of situations in which the institution is
self-enforcing. A self-undermining institution, by contrast, is one that is self-enforcing in
the short term, but encourages behaviors that undermine its foundations in the long term.
Scholars of federalism have identified a number of sources of stability in federations.
Any of these factors may be treated as parameters in the short term, but may themselves
be subject to change in the long term. Thus, they qualify as what Greif and Laitin (2004)
term ‘quasi-parameters’. In order to assess the long term durability of the EU, we must
consider whether the EU is encouraging the strengthening (or weakening) of these ‘quasi-
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parameters’. The table below summarizes some of the leading sources of institutional
stability identified in the literature on comparative federalism:
Sources of Stability for Federal Systems Present in EU? Growing?
Federal Culture – Many theorists of federalism (such as Elazar, Franck and Beer) have argued that a shared political culture of federalism – involving a shared understanding of division of authority and commitment to federalism – are crucial for durability of federal systems.
No. Dubious.
Judicial Enforcement – Federal courts are called on both to police the division of authority between the federal and state governments and to enforce state government compliance with federal law. Scholars (see Bzdera; Bednar et al) have demonstrated that federal courts are more effective at policing state compliance than restraining federal overreach.
Yes Yes
Structural Safeguards – The fragmentation of authority in the federal government and the participation of state governments in federal policy-making can restrain federal overreach.3
Yes Unclear.
Party System – Party systems can affect the incentives of politicians in ways that sustain the federal system. In federal systems threatened by over-centralization, a decentralized party system is crucial to sustaining federalism (Riker 1964, Filippov et al 2004) In federal systems threatened by fragmentation, the growing centralization of the party system can help the center to hold.
No (EU party system is not centralized enough to support EU federalism)
Yes (Ongoing operation of the EU is encouraging some centralization of party systems)
External Threats – Common external threats (typically military threats) are often treated as a motivation for the founding of a federal system. We can view these too as motivations for the ongoing commitment of states to the federation.
Yes No (Common threat has surely declined since the end of the Cold War)
In this section, I will explore these and other sources of stability identified in the
literature on comparative federalism and suggest what they suggest about the sources of
stability of EU federalism.
3 Note however that this legislative gridlock can encourage judicial activism and assertions of authority by the bureaucracy. Also, as Tsebelis (2002) points out, when a multiplicity of veto players prevents a political system from reacting to crises, policy stability can lead to regime instability.
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What might cause the EU to breakdown?
In this section, I will explore a variety of scenarios that might lead to the collapse of the
EU. I will link each of these first to the sources of institutional stability presented in the
previous section (explaining how they would result from the undermining of one or more
of such sources of stability) and second to the categories of “breakdown” discussed in the
first section. I will couple the discussion of each scenario with a modest assessment of its
plausibility – recognizing that the future has a way of throwing up unanticipated events.
Such scenarios will include, but not be limited to, the following:4
• Decline in respect for rule of law leading to rampant non-compliance with EU law
and breakdown of EU legal system.
• EU asserting authority over sensitive area of policy-making (i.e. taxation or
abortion), leading one or more member states to defy EU with impunity.
• Breakdown of democracy and outbreak of civil war in newly admitted member
state leading to EU military intervention.
Conclusions
Having not yet conducted the research for this paper, I cannot presage my conclusions in
any depth. Having studied EU federalism and explored many of the sources of
institutional stability and change over the years, I expect that I will find that – in general
terms – rumors of the impending demise of the EU have been greatly exaggerated.
Though we arrive at the conclusion through somewhat different reasoning, I agree with
Moravcsik (2005) that the supposed ‘crisis’ over the rejection of the EU constitution by
French and Dutch voters demonstrates the EU’s “essential stability” rather than its
“decline or disarray”. Moreover, I suspect that the arguments that the EU is in need of
profound institutional reform in the wake of enlargement are ill-founded. The EU is
indeed built to last. Its current institutional arrangements are self-enforcing in the short-
term and are reinforcing themselves for the long term.
4 I am eager to hear suggestions from colleagues for scenarios they find plausible and worthy of consideration.
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References
Bednar, J. 2004. Authority Migration in Federations: A framework for Analysis. PS:
Political Science and Politics, July.
Bednar, Jenna, William N. Eskridge, Jr., and John Ferejohn. 2001. "A Political Theory of
Federalism." Constitutional Culture and Democratic Rule, ed. John Ferejohn, Jack N.
Rakove, and Jonathan Riley. New York: Cambridge University Press, pp. 223-270.
Bzdera, A. 1993. Comparative Analysis of Federal High Courts: A Political Theory
of Judicial Review. Canadian Journal of Political Science, 26.
De Figueiredo, R. And B. Weingast 2005. Self-enforcing Federalism. Journal of Law,
Economics and Organization 21(1):103-135.
Filippov, Mikhail, Peter Ordeshook and Olga Shvetsova. 2004. Designing Federalism:
Theory of Self-Sustainable Federal Institutions. Cambridge: Cambridge University Press.
Franck,T. 1968. Why Federations Fail: An inquiry into the requisites for successful
federalism. New York: NYU Press.
Lemco, Jonathan. 1991. Political Stability in Federal Governments. New York: Praeger.
Moravcsik, A. 2005. Europe without Illusions: A category Error. Prospect, Issue 112,
July.
Riker, William. 1964. Federalism: Origin, Operation, Significance. Boston: Little,
Brown and Company.
Thelen, K. 1999. Historical Institutionalism in Comparative Politics. Annual Review of
Political Science 2:369-404.