This paper argues that existing conceptual and theoretical frameworks have failed to provide us with satisfactory explanations concerning the policy-making and development of European foreign policy towards its neighbourhood. More often than not, scholars take a horizontal perspective while concentrating only on the Commission or the Member States’ (MS) role in the process. Prominent explanations in the literature are that foreign policy output is the result of a bargaining process and an attempt to balance between MS’ interests (e.g. intergovernmentalism), or is the result of the Commissions’ policy adaption and path dependence (e.g. historical institutionalism). Other possibilities are giving an historical-based account on the development of the policy or using the concept of coherence as an analytical tool, which indeed gives us a vertical perspective, but it is not a theoretical approach per se. The argument put forward in this paper is that since the balance of power between the intergovernmental (MS) and supranational (Commission) levels has played a significant role in the policy-making process, a theoretical framework, which is not only based on vertical analysis, but also takes into account questions of power, is needed. Here, Principal-Agent (PA) analysis comes into play. PA is not new to the European Studies field and is being used as a framework of analysis in the last 15 years. However, usually the focal point of analysis is EU internal policies or international negotiations with third countries while the emphasis is on why delegate/how to control questions. This paper, though, uses PA analysis in order to study post-delegation situations and examines how the distribution of competences between the MS (principals) and the Commission (agent) in the foreign policy sphere, affected the output of EU foreign policy, namely the European Neighbourhood Policy.
