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The early functionalist approach, closely connected with its key representative David Mitrany (1943
),
promotes the delegation of administrative government tasks to functionally differentiated international
agencies set up for efficient problem-solving and the provision of welfare, in an economic as well as in a
social and cultural sense (Taylor 1968: 406). Cooperation along functional lines seemed at that time most
beneficial in domains such as railway, shipping, aviation and broadcasting, whereas the coordination of
production, trade and distribution would prove more difficult (Mitrany 1943: 33). According to
functionalists, international agencies would initially have to deal only with mere technocratic matters,
whereas political decisions, implying redistributive consequences for citizens and social groups, would be
achieved intergovernmentally (Mitrany 1943: 37). Yet, governments might decide to delegate specific
functional decision-making powers to autonomous experts at a supranational level (Mitrany 1943: 52–53),
which could make national governments eventually superfluous in those fields (Taylor 1968:
404).
It is worth noting, however, that functionalists did not support a restriction of cooperation to artificially
constructed regional boundaries (Mitrany 1943: 32; see also Mitrany 1975, for an appraisal of ECSC and
Euratom). By contrast, neo-functionalists picked up their arguments in the 1950s in their attempt to
theorise the new phenomenon of European regional integration. In his extensive case study of the ECSC,
first published in 1958, Ernst Haas (1968), acknowledged that member states expected economic benefits
from delegating tasks of supervision and implementation to a supranational High Authority
(later called Commission), but placed greater emphasis on automatic processes of spill-over
to other economic and political spheres, firstly to atomic energy (Euratom), tariffs and trade
(Haas 1968: 301), then subsequently into the fields of wage and social security systems, currency and
credit, tax systems, investment planning etc. (1968: 103 and 311). According to Haas (1968:
525), substantial agenda-setting powers had been transferred to the High Authority because it
provided a necessary “federal arena for action” to the ministers of the member states in the
Council.
As the integration process slowed down, a simple linear growth scheme of European competences had to
be reconsidered. Now politics in Europe went against the assumption of an inevitable and gradual extension
of European policies and the supremacy of functional needs over political interests. Therefore,
neo-functionalists adapted their theoretical framework and put more and more emphasis on influences
exerted by non-state actors, especially industry and other interest groups, and interests of the member state
governments themselves (Lindberg 1963; Lindberg and Scheingold 1970; Schmitter 1971). Lindberg and
Scheingold (1970) trace a pattern of fluctuation in the integration process and develop a framework
covering different types of outcomes. Their theoretical framework allows for the possibility of
spill-back in policy areas where “[t]he scope of Community action and its institutional capacities
decrease” and community “[r]ules are no longer regularly enforced or obeyed” by member state
governments (Lindberg and Scheingold 1970: 137) because the latter decide to renationalise decisive
tasks or prefer to deal with them in an intergovernmental manner, although the respective
competences might have been explicitly assigned to community institutions before. In the opposed
case of forward linkage, however, a supportive coalition of decisive groups at the national level
and a certain amount of political leadership provided by the Commission and national leaders
will increase the scope of action or capacities of supranational institutions in an incremental
way. The most comprehensive model of systems transformation refers to a substantial and far
reaching extension of community boundaries in geographical or functional terms, meaning that
competences of community institutions are augmented considerably, which often requires a new treaty
base. In their book, the authors present case studies tracing spill-back in the coal sector and
forward-linkage in agricultural policy. The signing of the EEC treaty is one example of successful systems
transformation.
In the same tradition, Alec Stone Sweet and Wayne Sandholtz (Stone Sweet and Sandholtz 1997; Sandholtz and Stone Sweet 1998) resume the basic ideas of Ernst Haas’ neo-functionalism and Karl Deutsch’s transactionalism to explain different levels of supranational organisation and EC rule-making in various domains. According to them, community competences in a policy sector are determined by the level of transnational exchange (i.e. trade, establishment of European interest groups etc.) and the resulting societal demand for EC rules and regulations. As a result, more and more common market competences have been centralised, the most notable examples being business and consumer group pressures for European regulation in the telecommunications sector and the European airline industry.
Thus, neo-functionalist theories explain a sectorally differentiated evolution of European integration, but provide no precise criteria for determining which policies tend to be affected by positive or negative spill-overs.
The empty chair crisis and the Luxembourg compromise, which seemingly stopped the integration process
or even caused several steps backwards, meant hard times for neo-functionalist scholars even beyond the
days of Eurosclerosis in the 1970s. Political events or rather non-events at the same time heralded the
beginning of a long-lasting heyday of intergovernmentalist research on European integration.
Intergovernmentalists take on a completely different perspective towards European integration,
focussing on state actors and the dominant concept of national sovereignty in interstate relations.
Stanley Hoffmann’s (1964; 1966) work marks the beginning of a neorealist reasoning in European
integration research, focussing on governments, while later Andrew Moravcsik extended this approach
towards a “liberal intergovernmentalism” by including the role of other actors in the member
states.
Hoffmann (1964) did not reject the neo-functional notion of spill-over processes and the
coordination of policies under shared institutions on a supranational level, but only accepted it in
the realm of low politics, i.e. in economics, in the areas of industry, trade, and to some extent
agriculture, monetary policy and cartels (1964: 89). According to his reasoning, a transfer of
competences to supranational institutions prevents nation states from losing control in increasingly
interdependent economic domains. In high politics (military and foreign policy), on the other hand,
national interests are conflicting (Hoffmann 1964: 90) and as political integration does not
have “sufficient potency to promise a permanent excess of gains over losses” (Hoffmann 1964:
882), it would not lie in the rational self-interest of member states to pool sovereignty in this
area.
Andrew Moravcsik (1993, 1998) takes these assumptions as a starting point to develop his liberal
intergovernmentalist approach of European integration by examining the grand bargains in EC history. In
the liberal intergovernmentalist view, the “delegation and pooling of specific and precise powers” is best
explained by the eagerness of governments to credibly commit themselves vis-à-vis the other member
states or domestic groups, whereas “patterns of support for more general institutional commitments”
(Moravcsik 1998: 488, emphasis in original), such as the institutional form of the EC, including the gradual
empowerment of the European Parliament, rather depend on the relative importance of federalist ideology
in the member states. Moravcsik (1998) traces in detail the successive instances of delegation of member
state sovereignty – starting with the Treaties of Rome in the areas of external representation
in tariff and trade negotiations with third countries, agenda-setting by the Commission, and
enforcement of competition policy and EC law and culminating at Maastricht with the creation of a
strong and autonomous central bank where member states with conflicting interests sought
to settle a credible anti-inflationary mandate – but always stresses the explicit limitations of
scope and the simultaneous or subsequent adoption of control mechanisms by the member
states.
Taking a similar point of departure, Mark Pollack (1997, 2003) relies on a rational choice principal-agent
model to explain delegation, discretion and member state control of supranational institutions in the EU.
Pollack draws on Garrett’s (1992) earlier analysis of member states’ long-term interests to accept ECJ
jurisdiction even if it is unfavourable to them. He relates actual competences of the Commission and the
Court to their theoretical agency functions, i.e. monitoring compliance, solving problems of incomplete
contracting, issuing secondary legislation, and formal agenda-setting, and puts it alongside
the numerous constraints and control mechanisms set up by member state principals to limit
the scope of agent’s power and discretion, such as the comitology committee procedures or
the threat of non-compliance with ECJ rulings (Pollack 2003). Based on this principal-agent
framework, Jonas Tallberg (2002) develops a theory of dynamic linkages between stages of
delegation. He argues that the experiences with existing institutional arrangements influence national
governments’ future decisions on delegation and their interaction with European actors, which
can explain why a transfer of powers to the EU does not always take place and often develops
gradually.
These authors follow the trend of “rediscovering institutions” in political science theories, as have
Tsebelis and Garrett (2001) with their rational choice institutionalist model that accounts for the ability of
the Commission and the Court of Justice to extend their discretion and move policy outcomes closer to
their own preferences compared to the Council of Ministers. Tsebelis and Garrett hold that
the discretion of supranational actors is dependent on the applicable legislative procedures
laid down in the community’s changing treaty bases. These institutional rules determine how
difficult it is for the Council to pass new legislation and overrule the Commission or the Court.
Therefore, the Commission and the ECJ managed to switch autonomy and competences to the
supranational level by means of policy implementation, legislative agenda-setting and proactive court
rulings.
In the same realm, an extensive body of literature on legal integration, mostly in a
neo-functionalist tradition, but emphasising the dynamic effects of institutions (Burley and
Mattli 1993; Alter 1996; Dehousse 1998; Stone Sweet 2004), states that the ECJ, via expansive
interpretation of treaty provisions and the setting of legal precedents, gained considerable competences in
monitoring and interpreting community law. Moreover, by means of the doctrines of direct effect and
supremacy and particularly the procedure of preliminary rulings (Art. 234 EEC Treaty), it has acquired the
power for substantive intervention into the national law of the member states. Once the Court had acquired
these considerable new competences, it became increasingly difficult for politicians to overrule its decisions
unless the member states decided to amend the treaties or at least managed to pass new and potentially
contested legislation in the Council of Ministers (Alter 1996). Furthermore, ECJ jurisdiction
proved not to be confined to purely economic matters corresponding to the Court’s role as
safeguard for the creation and functioning of the common market. Rather, the Court’s rulings were
gradually extended to areas such as health and safety at work, social welfare benefits, mutual
recognition of educational and professional qualification and political participation rights (Burley
and Mattli 1993: 66; see also the case studies on sex equality and environmental protection in
Stone Sweet 2004).
The historical institutionalist study by Paul Pierson (1996) takes on a similar but more general
approach (see also Armstrong and Bulmer 1998). Pierson aims at explaining why gaps, i.e. “significant
divergences between institutional and policy preferences of member states and the actual functioning of
institutions and policies” (1996: 131) emerge. Pierson thus understands gaps as a loss of member state
sovereignty to the European level when this was not anticipated. His research focuses on the diverging time
horizons of actors at the national and supranational levels due to member-state politicians’ preoccupation
with short-term concerns, the instability of member-state policy preferences over time, and unintended
consequences. The ensuing processes of competence shifts to the European level are amply
demonstrated in his case studies on European social policy. However, like all neo-institutionalist
approaches, this theory does not explain the conscious delegation, maintenance or reestablishment
of national sovereignty in specific areas, nor does it predict the outcome of path-dependent
developments.
In the field of policy analysis, Giandomenico Majone (1996) distinguishes between regulatory and
direct-expenditure (i.e. redistributive or distributive policies) programmes. The EU, drawing near a
“regulatory state”, is confined almost exclusively to regulatory policies for the compensation of market
failures and has a much lesser stake in direct state-financed programmes. Even though in some areas
regulatory policy-making and implementation are centralised at the European level, whereas in others
patterns of co-ordinated partnership evolve, ”both in economic and in social regulation, policy
initiatives in the member states are increasingly likely to derive from an agenda established
at the European rather than the domestic level” (1996: 265–266), i.e. the actual regulatory
competences are increasingly shifted to the European level even when formally executed by the
member states, which considerably lowers the autonomous problem-solving capacity of national
governments.
Fritz Scharpf’s (1999) analysis of the remaining problem-solving capacity at the European
and the national level relies on the distinction between the area of negative integration, where
the Commission and the ECJ dispose of broad competences and institutional strength for the
“removal of tariffs, quantitative restrictions, and other barriers to trade or obstacles to free and
undistorted competition” (1999: 45), and positive integration, where “[t]he existence of ideological,
economic, and institutional differences among member states will obviously make agreement
on common European regulations extremely difficult, and in many cases impossible” (1999:
82).
These findings hold true as long as the dynamics of integration mainly depends on the power of national
governments in relation to supranational actors. The more decisions on European integration are
“politicised” in national societies and the more political parties enter the arena of European politics, the
more the vertical allocation of competence turns into a matter of social conflicts. As a study by Hooghe and
Marks (1997; 2001: 163–186) has revealed, party politics in the European Union is still shaped by
traditional cleavage structures, with left parties favouring more EU competence to regulate social
policies, whereas parties from the right support a neo-liberal policy at the European level.
However, so far the indications that European politics will be influenced by party competition are
ambiguous.
Yet, recent studies in the field, whether relying on new institutionalism or the more general argument that states cannot be considered as unitary actors but are determined, among others, by politicians with strong preferences, as in Gary Marks’ actor-centred approach (Marks 1996), explicitly advocate a more comprehensive theoretical framework that supplements the state-centric perspective by examining the role of ideas, interests and institutions in each single case (Christiansen, Falkner, and Jørgensen 2002; Rittberger and Schimmelfennig 2006). This approach is thoroughly used in the detailed case studies on constitutional choice and treaty reform in the EU by Gerda Falkner and her colleagues (Budden 2002, on the Single European Act; Falkner 2002, on Maastricht; Sverdrup 2002, on Amsterdam and Nice).
In contrast to neo-functionalist and intergovernmentalist theories, institutionalist and policy- or
actor-centred approaches to European integration focus more on the modes of decision-making, in particular
the relative power member state governments can exert in relation to supranational actors. In the
terminology coined by Lindberg and Scheingold (1970: 67–71), they mark a shift in research interests from
the “scope” to the “locus” of European policy. Thus they emphasise an important aspect in the vertical
dimension of multilevel governance which is ignored in most normative theories of federalism: The
effective power of the EU or the member state governments depends not only on competences
allocated to them but also on the rules which determine how the competences can be used in
practice.
Fifty years of research into European integration have produced abundant theories and explanations for the phenomenon of delegation of national sovereignty to supranational institutions. Scholarly literature – taking basic assumptions of neo-functionalism and intergovernmentalism as a starting point – has constantly developed new perspectives and introduced theoretical ideas from other research fields to European integration theory. They explain the discontinuous, but nevertheless far-reaching shift of competence from the national to the European level, but they also reveal that this tendency varies between policies.
Different theoretical approaches have clearly shown the driving forces towards and the constraints limiting the competence transfer to the EU. Despite this, there is no general explanation covering all policies or competences. Individual theories of European integration have proved more valid for certain policy areas, institutional settings and at certain times, but still no single most convincing concept and no coherent set of competence allocation has emerged from theoretical predictions as well as ex-post explanations. Moreover, with some exceptions, theories tend to focus on the explanation of why member state governments abandon powers to the profit of the EU. In contrast, the reasons why the allocation of competence to the European level fails are not analysed in detail. Moreover, the available literature provides comprehensive insights into the imbalances and asymmetries of competence allocation resulting from the dynamics of European integration. However, scholars rarely discuss the consequences of this development for effectiveness and legitimacy of European integration.
A number of empirical studies have tried to take stock of the outcome of the integration process
(e.g. Börzel 2005; Donahue and Pollack 2001; Hix 2005: 18–23; Schmidt 1999). The results converge in
the overall picture but diverge in the details: The EU has acquired exclusive competences in
market-creating policies and shares competences with its member states in market-correcting
policies. With some exceptions (territorial cohesion, regional policy and agricultural policy)
the member states maintained their powers on redistributive issues. The increase of the EU’s
competences portrayed by these studies appears impressive. Nonetheless, it should not be ignored that
the EU still lacks the basic powers to raise taxes and to implement its policies. Moreover, the
distinction between market-creating, market-correcting and redistributive policies underrates the
interdependencies between them which actually constrain the autonomy of the EU and the national
institutions independently of their formal competences; comparative federalism comes to its limits
when analysing European integration. The evolution of the European Community and later the
European Union was the result of centralist trends similar to those we can observe in the history of
federal states. However, whereas in national federations these trends are linked to the rise of the
welfare state, in the case of European integration they concern policies determined to limit state
power.
When it comes to evaluating the detailed shift of competence from the national to the European level, researchers are confronted with the problem of determining the meaning and the impact of a competence. Different methods of measuring have been used which all produce quite different results (Börzel 2005; Estella de Noriega 2002). Following studies in comparative federalism, one can refer to the formal competences enumerated in the treaties and distinguish between legislative, executive and fiscal powers, or rely on expert assessments. However, formal competences of EU institutions are all but clearly stated in legal terms. Moreover, their application depends on the ability of the Commission and the Council to come to decisions. Hence, the probability of an effective change in competence allocation is influenced by different modes of legislation and policy-making. Obviously, budgetary figures hardly tell us anything about the relative powers of the EU and the national levels. Furthermore, competences may have a merely symbolic value or may be undermined by “shirking” of implementing authorities of the member states (Bednar 2004: 404), an issue dealt with in research on compliance. Finally, EU institutions are engaged in policies without having formal competences by using methods of “open” coordination. Thus, one serious problem of the integration literature is that we still lack a common concept of the meaning and an agreement on the measurement of EU powers.
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