Working Paper: CEPR ID: DP6778
Authors: Heikki Kauppi; Mika Widgrén
Abstract: This paper evaluates the determination of receipts from EU budget by considering a richer institutional structure than in earlier studies. We assume that the member states have self-interested objectives in CM trying to minimize their contributions within the given framework of the EU budget whereas EP is supposed to support benevolent objectives using its competence in non-compulsory expenditure, i.e. structural spending, internal and external policies and administration. CM exerts power in the allocation of both compulsory expenditure, mainly consisting of agricultural spending, and in non-compulsory expenditure. The purpose of this paper is not, however, to evaluate EP's influence but rather how the assumed benevolent objectives of EP and income differences turn into member states' budget receipts in a power politics based model.
Keywords: EU budget; European integration; voting power
JEL Codes: C71; D70; D72
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| higher income levels (D31) | increased noncompulsory budget receipts (H69) |
| voting power shares (D72) | noncompulsory expenditures (H59) |
| voting power in CM (D72) | compulsory expenditures (H61) |
| EP's influence (E65) | noncompulsory expenditures (H59) |
| benevolent objectives of EP (H11) | noncompulsory expenditures (H59) |
| power politics (D72) | total spending (H56) |