Explaining Institutional Change in Europe

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After the accession, the reforms were confronted with a political reflux that endangered their sustainability. Romania needed a substitute for the conditions and obligations of the pre-accession period, a tool for repelling political attacks against the justice system and for further supporting the judicial reform and the fight against corruption. Without it, the reforms would not have been sustainable. After all, the reform of the justice system and the fight against corruption reflected a proposal for a new social paradigm. In fact, CVM was an experiment introduced when Bulgaria and Romania joined in , but it was not replicated with the accession of Croatia in Instead, the Commission started to open the Justice and Human Rights-related chapters very early in the accession talks.

The mechanism acted in this sense against any attempts to alter the anti-corruption path of the country. The liberal party PNL which is in coalition with the ruling socialists in Romania has vowed to block proposals that would increase the immunity of members of parliament from corruption charges, as the European Union presses Bucharest to rein in graft and organised crime.

A new project has highlighted fraud and irregularities in the system, and suggested how to improve the situation. As such, with the support of CVM and of important segments of society, the first post-accession major breakthroughs appeared. We consider several controls internal to each RIO, including the most important explanations for international institutional change in general. Perhaps the most firmly grounded expectation in the literature on international institution building is that it should co-vary with economic interdependence Haftel, ; Keohane, Economic exchange develops its welfare-improving potential to the fullest with stable, predictable property rights.

Hence, trade that traverses international borders creates a demand for coordination among states so as to provide uniform rules. Reducing barriers to cross-border trade is a core rationale of many RIOs, and one might expect, therefore, that the growth of trade interdependence within a regional organization leads to greater delegation. Scholars in the tradition of Waltzian neorealism hypothesize that powerful states reject strong institutionalization because it inhibits unilateral action, and instead prefer intergovernmental arrangements Abbott and Snidal, : Conversely, hegemonic stability theory suggests that an unequal distribution of power may expedite the provision of public goods and a hegemon may find the rule of law useful in eliciting the compliance of weaker members Krasner, We control for these possibilities with a measure of power dispersion, Power asymmetry , being the ratio of the material capabilities of the most powerful member state to the average of all other members.

The extent of delegation within an organization might be sensitive to the size of its overall membership base.

Explaining Institutional Change in Europe

As the number of members grows, decentralized cooperation in the absence of delegated institutions may become more costly as a result of issue cycling and increasing informational asymmetry Hawkins et al. We measure Members as the natural log of the absolute number of member states in a given year, assuming that the effect of one additional member joining declines as the absolute number increases. Norms of appropriate behaviour in democratic states, or alternatively the political context in newly democratizing countries, may render elites more willing to delegate to international organizations Grigorescu, An implication of the findings of the democratic peace literature is that autocracies are more likely than democracies to be fearful of exploitation.

Newly democratizing states, in particular, may use international institutions as external commitment devices Moravcsik, Finally, we control for the mean per capita gross domestic product GDP of member states in an RIO in a given year on the premise that the richer the members, the greater the demand for international cooperation — and, correspondingly, the degree of delegation to international organizations.

Summary statistics and bivariate correlations for all variables used in the analysis are contained in online Appendix D. We now turn to the empirical testing of our claim that the EU systematically shapes processes of institution building in other RIOs. We first discuss issues of model specification, before then turning to the results and their robustness. A discussion of the control variables follows thereafter.

The dependent variable is the level of delegation in an RIO, expressed as a continuous variable ranging from 0 to a theoretical maximum of 1, though the highest value in our data set is 0. As noted, our data set examines 34 RIOs between and Thus, our analysis is of panel data, meaning data that vary across time for a number of entities — that is, RIOs.

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Since we have only one dependent variable, we select linear least-squares regression as our technique. It must be noted that RIOs come into being at different times, meaning that our data are unbalanced; hence, we use fixed-effect models with robust standard errors Greene, Meanwhile, RIO delegation is lagged by one year in order to ensure that we mitigate any issues that may arise from endogeneity.

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  7. Furthermore, contractual open-endedness is a key variable, which takes two forms: analysed both on its own and as part of an interaction with active and passive EU influence. Contractual open-endedness takes values of 1 fixed contract , 2 intermediate contract and 3 open-ended contract. As an interaction term, it serves to uncover whether active and passive EU influence vary across RIOs that differ as regards their contractual characteristics.

    The interaction takes the form:. In Models 3, 5 and 7, contractual incompleteness is used as a factor variable with a base of 1 indicating, as noted, a fixed contract. Results are presented in Table 2. The models are: 1 contractual incompleteness; 2 active EU influence; 3 active EU influence interacted with contractual incompleteness; 4 passive EU influence; 5 passive EU influence interacted with contractual incompleteness; 6 active and passive EU influence; and 7 active and passive EU influence interacted with contractual incompleteness.

    Notes : All models use fixed effects and robust standard errors in parentheses. In line with Hypothesis 1, we find robust evidence that active EU influence — an aggregate index of funding, interregional agreements and institutionalized contacts — is associated with higher levels of delegation in other RIOs. This comes with positive and strongly statistically significant coefficients in Models 2 and 6. Disaggregating active EU influence into its three constituent components and conducting the regression with each of the components independently does not affect the results for details, see online Appendix E.

    On its own, contractual incompleteness is significantly correlated with delegation — meaning that organizations based on more open-ended commitments are more likely to achieve high levels of delegation. This holds true for organizations with highly incomplete contracts when interacted with active and passive EU influence. These results are in line with our hypothesis that RIOs possessing an endogenous capacity for change are more likely to go through it.

    The effect of active EU influence varies across different types of RIOs, as captured by contractual incompleteness. Specifically, active EU influence greatly increases in organizations that have an open-ended founding contract — as demonstrated by the positive and significant interactions in Models 3 and 7. On organizations that restrict the actors of cooperation to governments intermediate contract — let alone on those with a fixed contract — the EU has very limited influence.

    These results bolster our conditional hypothesis that active EU influence is most effective in RIOs that are disposed of an endogenous capacity for institutional change because unspecified commitments provide space for the creation of new institutional mechanisms — as well as the strengthening and reforming of existing mechanisms. Just as for active EU influence, we find strong support for the idea that institutional evolution in the EU is associated with a change in delegation in specific types of organizations, namely, those based on open-ended contracts.

    Models 5 and 7 consistently show a positive and statistically significant effect for the respective interaction term. Figure 2 plots the predicted values of RIO delegation for the different values low, up to the 33rd percentile; medium, between the 33rd and 66th percentiles; high, between the 66th and th percentiles of our active EU influence measure over time, with other variables being held at their mean.

    Yet, even for RIOs that have medium-level engagement with the EU, the effect on delegation is noticeable, being statistically distinguishable from low or no active engagement from around onwards. Active EU influence and RIO delegation for different levels of contractual incompleteness, — This is also the case for passive EU influence.

    Edited by David Levi-Faur

    Figure 3 plots the predicted effects of the interaction over time based on Model 5, with other variables being held at their mean. It illustrates that EU delegation exerts its strongest impact on RIOs with an open-ended founding contract. We interpret this result as evidence that the EU serves as an important reference point for learning and emulation processes, primarily for those RIOs that are similar to the EU with regard to open-ended commitments.

    Overall, these results lend strong support to the idea that, at least for specific types of organization, decision-making is indeed interdependent across organizations — and even in the absence of active EU influence. Passive EU influence and RIO delegation for different levels of contractual incompleteness, — Finally, our results also indicate that passive EU influence exerts a larger overall substantive effect on RIO delegation than active EU influence does.

    In concrete terms, an increase of one standard deviation in active EU influence leads to a 0. This is equivalent to the establishment of a third-party dispute settlement body consisting of ad hoc arbitrators that, under certain conditions, can mandate retaliatory sanctions. A one standard deviation increase in passive EU influence, in contrast, is associated with an increase of 0.

    As expected, these effects are somewhat larger for RIOs with open-ended contracts. Here, a one standard deviation increase in active EU influence increases delegation by 0. However, one should keep in mind that the substantive effect of passive influence is spread over the entire lifetime of the EU and affects all organizations in our sample, whereas active influence targets individual organizations and varies in its intensity. A counter-argument may posit that active EU influence is endogenous to delegation because the EU might be interested in dealing with more established and significant organizations.

    In other words, high levels of RIO delegation may attract more extensive institutionalized engagement with the EU — rather than active EU influence causing an increase in RIO delegation per se. We therefore test for reverse causality by running the models of active EU influence with delegation as the independent variable, and active EU influence as the dependent variable — also including the interaction with contractual incompleteness.

    The results show that delegation is not a significant factor in determining whether the EU actively engages with a specific RIO or not for details both on this and on all subsequent robustness tests, see online Appendix E. On the basis of the assumption that channels of EU influence might be more informal due to membership overlap, we conducted the analysis while excluding European RIOs.

    However, this does not change the results already presented in Table 2.

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    This measure is highly correlated to our measure of passive influence 0. The results hold constant both for the alternative measure alone and in combination with active EU influence, but the interaction term loses statistical significance.

    Finally, there is no substantive change in results when we extend the lag on the EU influence variables to two or even four years. Finally, we consider the effects of our control variables. We first turn to alternative external influences. Regional diffusion appears to have a dampening effect even though insignificant on levels of delegation among neighbouring organizations in five continental macro-regions the Americas, Europe, Africa, the Middle East and Asia , as indicated by the consistently negative sign of the coefficient. This represents a stark contrast to our finding that the direct and indirect pressures that the EU exerts on RIOs help to create stronger regional institutions, as it means that EU influence works in a different direction than trends in neighboring RIOs.

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