A More or less
intergovernmental union
European integration in the case of
the European Development Fund
Jonas Bjärnstedt
Thesis: / 15hpProgram: / European studies programme
Level: / First Cycle
Semester/year: / At/2016
Supervisor: / Ann-Kristin Jonasson
Examiner:
Report no:
Word Count: / 10 999
1
Abstract
Is the community Intergovernmental or Supranational? The question has perplexed EU-researchers since the dawn of the European Coal and Steel Community. This thesis answers the question in one specific case, namely the European Development Fund. It started as a trade project with the overseas countries and territories, and it has since developed into the EU’s and member states fund for the ACP countries. Funded by the member states on a voluntary budget and outside of the EU financial framework, it could be the poster child for an intergovernmental institution. With the help of an analytical framework and previous theories, I examine the case. This is done with the help of Liberal Intergovernmentalism, Neofunctionalism and an analytical framework with two ideal types that points at important markers. In the end, I illustrate how hard it is to pin a simple label such as intergovernmental or supranational on the European Development Fund.
Thesis: / 15hpProgram: / Europeansciences program
Level: / FirstCycle
Semester: / At/2016
Supervisor: / Ann-Kristin Jonasson
Examiner:
Report no:
Keywords: / Liberal Intergovernmentalism, Neofunctionalism, European Development Fund, EDF, intergovernmentalism, supranationalism
Sökord: / Liberal Intergovernmentalism, Neofunktionalism, Europeiska Utvecklingsfonden,EUF, mellanstatlighet, överstatlighet
Word count: / 10999
Contents
Abstract
1 The integration of development aid
2 Theory and Previous Research
2.1 Integration theory
2.1.1 Neofunctionalism and Supranational Governance
2.1.2 Liberal Intergovernmentalism
2.2 Previous research
2.2.2 An attempt to measure intergovernmentalism
2.2.1 The European Development Fund
2.3 Analytical framework
3 Purpose and research question
4 Method
4.1 Material
5 Results
5.1 Who makes the decisions?
5.2 In what ways are decisions made?
5.3 Is power delegated or surrendered?
5.4 Why does the EDF exist?
6 Conclusion
6.1 Final discussion and suggestions for further research
Reference list
List of tables
Table 3.1 Analytical framework14
Table 5.1Who makes the decisions?19
Table 5.2 In what ways are decisions made?21
Table 5.3 Is power delegated or surrendered?22
Table 5.4 Whose interests does the institution represent?23
Table 6.1 Analytical framework, answered25
1
1 The integration of development aid
The integration of member states in the EU has long been a subject of debate. Some claim that the EU is just a collection of member states negotiating with each other (Moravcsik & Schimmelfennig, 2009, p 69) and yet others claim that the EU institutions will take over decision-making from the national institutions in the member states(Stone Sweet & Sandholtz, 1998, p 4). Integration theory is often used to try to make sense of how the EU works (Diez & Wiener, 2009, p 4), but more than integration theory, there is also a need for understanding how the institutions and member states in the EU work together (or does not work together). By studying the inner workings of the EU, a researcher’s findings can strengthen one theory andweaken another. So far, no theory has been proven enough to be the only theory in the field, even though they wax and wane in popularity as time goes by. It is far beyond me or indeed any one researcher to examine the integration in the entirety of the EU, it is far more plausible to select a part of the EU and examine the level of integration. The selected case for this study is the European Development Fund (EDF). The EDF is an interesting case in many ways. First, it is an area that does not receive as much interest as other parts of the EU, even in the context of aid research or research on the EU foreign policy. The EDF is sometimes touched upon in research as an example of an intergovernmental entity among the EU institutions (Commission, 2016; D'Alfonso, 2014, p 1; Molenaers & Nijs, 2011, p 415),or introduced as a small part in a much larger puzzle (Tannous, 2013). I posit that the EDF is interesting enough in itself to examine as an example of European integration and that the question is not as simple as just claiming that the EDF is intergovernmental or supranational in nature.
The EDF is a special case among EU instruments in many ways. It reminds more of one of the many aid projects that states have started around the globe, which conduct their aid in much the same way as the EDF does (Schneider & Urpelainen, 2014). The EDF is an EU instrument which is controlled by the EDF-Committee, together with the Council of the European Union (The Council). The EDF is a fund wherein the Member States pools their resources to fund the EU – ACP foreign aid programme.The purpose of the EDF is to coordinate, program and decide upon the amount of funds in the EU aid to the African, Caribbean, and Pacific (ACP) countries. The difference between the funds the EDF receives and the money that the EU spend on other developmental aid programmes is that the EDF is outside of the EU’s financial rules, since it is outside of the EU budget. There have been attempts by the Commission to include the EDF in the budget, and some member states have lent their support to the suggestions, but it has not yet happened. It is also the only EU instrument whose contribution key is not in line with the regular EU budget contribution key. The financing of the EDF is voluntary for the member states but based on a contribution key. The purpose of the EDF is to be the main mechanism that handles the aid to the ACP as well as the Overseas Countries and Territories (OCT). The aid is meant to further democratic development and to eradicate poverty(COM(2016)486, p 5). The EDF is placed under the Directorate General (DG) of Development and Cooperation (Devco), which is a supranational entity under the Commission.It is at the same time positioned under the European External Action Service (EEAS). The EEAS is a part of the Common Foreign and Security Policy (CFSP) and the Common Security and Defence Policy (CSDP). These are institutions that were formalised with the treaty of Lisbon. The EDF also has a close relationship with the European Investment Bank (EIB), the EU’s long term, non-profit lending institution. The shareholders in the EIB are the member states, which means that the member states are the ones that sets the policy goals for the EIB and oversee the board of governors and the board of directors. (OJ L 201, 2010).
The EDF has been a part of EU aid since the treaty of Rome. The treaty contained parts about the member states and their relations to their current and former colonies. The member state that pushed the most for this inclusion was France (Arts, 2004, p 102). The EDF then gradually expanded to incorporate more recipients of aid. When the United Kingdom entered the EU, it brought with it the remnants of its former empire, which enlarged the sphere of interest. The EDF has since evolved into an instrument that oversees aid to the countries in sub-Saharan Africa, the Caribbean and the Pacific (ACP) and the Overseas countries and territories (OCT)(Carbone, 2007, p 31 - 32). OCT are the countries and territories that have historical ties with Denmark, France, the Netherlands and the United Kingdom(Europaid, 2016).
In the beginning, and on to the 1980s, there were two opinions on how to use the fund. There was France and Belgium who pressed on the issue of strategic links between the member states and their former colonies, and Germany, the Netherlands, and the United Kingdom, along with Denmark, who focused on poverty eradication. The Yaoundé Conventions who were in place from 1963 to 1975, which concentrated on the former colonies and mainly on trade were a victory for France and Belgium, whofavoured a regionalist approach. It was followed by the Lomé Convention which was in effect 1975 - 2000, a treaty that was hailed as a modern example of North-South cooperation. Lomé accommodated both views, and integrated the former British colonies in the fund (Carbone, 2007, p 31 - 32).
The Lomé Convention included right to aid, meaning that the recipients had a right to aid for five years, with no requirements of performance. It also included export privileges as certain goods from ACP countries could enter the EU at a lower or no tariff. The emphasis of the Lomé was on partnership. Several cooperation institutions were initiated, and to support dialogue, the EU and ACP created institutions tasked with supporting the partnership (Carbone, 2007, p 32).There were attempts to expand the EDF further with the Lomé, and include other countries in need of aid, for example Bhutan. The suggestion was made by member states without close ties to former colonies, but the suggestion did not pass(Arts, 2004, p 103).In 2000, the Cotonou Agreement supplanted the Lomé Convention. Where the Lomé had expanded on the Yaoundé, the Cotonou expanded on the Lomé. It expanded on the conditions of aid, and on the trade agreements.The EDF is an evolving entity, and has changed over the years since the treaty of Rome. The current EDF is the 11th, which started in March 2015, when it followed the 10th EDF, which ended in December 2013. In the 11th EDF, the donor key of the member states are brought further in line with the contribution to the EU budget(Commission, 2016).
2Theory and Previous Research
There are multiple theories that can be used to explain my question. I am going to limit myself to integration theory. While there are other theories that can explain parts of the question, the theories I use, Liberal Intergovernmentalism, Neofunctionalism and Supranational Governance, try to explain all parts of integration. Other theories are more useful for taking on specific parts of the problem.
2.1 Integration theory
A helpful way to understand how the EU works is to use different integration theories. They are a way to explain how, if, or when, integration happens. No theory of integration has so far been able to explain all aspects of integration, but some have a larger following than others and some have endured, albeit changed with the times, for a long time. Not all theories of integration are relevant to this thesis, but I describe the ones I use to analyse the decision-making progress in the EDF below.
2.1.1 Neofunctionalism and Supranational Governance
Neofunctionalism was the first theory designed to understand European integration. It was pioneered in the late 1950’s and early 60’s by Ernst Haas and Leon Lindberg, who developed the theory to understand two new institutions: The European Coal and Steel Community (ECSC) and the European Economic Community (ECC). At first, the theory seemed to be able to explain European integration, but after large setbacks, the theory was declared obsolete by Haas himself in the 70’s. The theory has since had a resurgence, with the increased integration at the end of the 20th century (Niemann & Schmitter, 2009, p 45). An important part of the neofunctionalist theory is the concept of “spillover”, or the “spillover effect”. Spillover is a concept that reminds of path dependency, in that previous decisions decide what ways are possible to proceed on. With spillover, integration begets integration. Ernst Haas, one of the pioneers of the neofunctionalist theory talked about spillover and how it happened almost as soon as the ECSC had formed (Haas, 1958, p 292). He even went so far as to say that the member states accepted spillover integration even though it might not be beneficial in the long term (Haas, 1958, p 297). His reasoning for the spillover was that some sectors of the member states were interdependent on such a level that it was impossible to integrate some sectors and have other parts left out of integration. Thus the integration for a common market would lead to integration of other policies, such as welfare systems (Haas, 1958, p 382 - 383).
Neofunctionalism has over time been heavily criticised, both from neofunctionalists themselves and from intergovernmentalists. One of the most heavily criticised parts of neofunctionalism is the power of prediction it claimed to have. The problem with the predictions was that they did not come to pass. With the criticism it got, neofunctionalism fell out of favour for a while, but has since had a resurgence, through the rise of the theory of Supranational Governance, a theory spearheaded by Sandholtz and Stone Sweet (Bache, George, & Bulmer, 2011, p 14). This theory can be seen as a counter point to Liberal Intergovernmentalism, in the same way that Intergovernmentalism was an answer to Neofunctionalism. Stone Sweet and Sandholtz (1998, p 5) argues that the bargaining process that Liberal Intergovernmentalism claims is a proof of intergovernmentalism over supranationalism is instead just a small part in the increasing level of supranationalism in the EU. This is achieved by spillover effect that forces the member states to bargain on areas where the supranational entity, in this case the Commission, deems it necessary. If one system becomes integrated, this will lead to bargaining over integration in other systems, whether the member states wants it or not. In this part of their theory, Stone Sweet and Sandholtz agree with the earlier Neofunctionalists that member states become reactive, rather than pro-active actors (Stone Sweet & Sandholtz, 1998, p 6 - 7). The Supranational Governance theory uses two diametrically opposed ideal types in its analysis, a purely intergovernmental one and a purely supranational one. The intergovernmental ideal type is one where the heads of member states negotiate with each other, based on preferences and bargaining power. The Supranational ideal type is where central institution has power over policy in the member states. To explain the perceived move towards supranationalism, Stone Sweet and Sandholtz use the term Institutionalization. Institutions here are being explained as the regulations and institutionalization as the process in which these regulations are applied to the member states, both by political institutions and by the European Court of Justice (Stone Sweet & Sandholtz, 1998, p 16 - 17). Stone Sweet and Sandholtz do not outright dismiss the claims of Moravcsik, they do agree that there is an element of intergovernmentalism in the workings of the EU, but press their point that instead of member states delegating power to the EU of their own free will, actors like the commission actively work to increase their own power and to move decisions from the member states to their own sphere of influence (Stone Sweet & Sandholtz, 1998, p 25 - 26).
2.1.2Liberal Intergovernmentalism
The first version of the Intergovernmentalism theory was made by Stanley Hoffmann(1964), as a response to Haas Neofunctionalism. Liberal Intergovernmentalism continues in the same directionto explain integration that Intergovernmentalism set out on.
Hoffman argued that the spillover effect was not as prevalent as it had been assumed in Neofunctionalism. He also argues that the member states at the time, “the Six” (Hoffmann, 1964, p 88)had a much easier time agreeing on policies that eliminated obstacles to mobility and trade, than they did on issues concerning policies already in place (Hoffmann, 1964). Hoffman describes de Gaulle as a leading opponent against supranationalism and a champion of intergovernmentalism, and in this he was proved right in the “empty chair crisis”. France withdrew its member of the Commission in 1965 – 66. De Gaulle’s protest succeeded, and led to unanimity voting on important issues, through the Luxembourg compromise (Council, 2015). Hoffman places integration on a scale balanced by diversity. In a diverse union, the effects of a spillover effect can only be limited to level the member states wants it to stop at, in the areas that member states want to keep control, they will. The member states simply would not want to surrender the ability to make their own decisions, even though the outcome might not be what the member state expects (Hoffmann, 1966). Hoffman goes on to argue that there can be no unanimous European will, since there is no European people. The problems of the member states are more suited to be handled by local governments and civil servants, than by a supranational entity (Hoffmann, 1966). In his continued critique against functionalism, Hoffman argues that the creation of the European Union is not possible in the ways we are used to states being created, a state that creates a people or a people that creates a state. Hoffman goes on by saying that the only way to integrate is to wait until the member states are ready. The member states would not let it go any further (Hoffmann, 1966).
As is the case with Hoffman’s Intergovernmentalism, Liberal Intergovernmentalism critiques functionalist theories and the spillover effect. Moravcsik argues that even though the EU issui generis, an actor of a kind that the world has never seen before, it does not need a unique theory (Moravcsik, 1993). His critique continues by examining the predictions made by the neo-functionalists, which have not come to bear, or at least not in the way that the neo-functionalists described it would happen. Liberal Intergovernmentalism is inspired by international relation theory and more precisely liberal theory. It assumes that states have interests, and those interests are relevant. Moravcsik claims that one is unable to understand the interests of a member state unless one also understands that member state’s domestic politics. This is a step away from some theories in international relations that treats states as having fixed preferences. The theory further states that the member states negotiate based on their preferences. So, it is a chain that starts in the member state, where public opinion, NGO’s and party politics forms the preferences of the state, which then decides what stance it will take in the multilateral negotiations in the EU (Moravcsik, 1993).