Preferences and Institutions in the European Integration Process

In this paper we present a game-theoretical model of political integration and the incentives politicians face during the integration process, and apply it to the European Union (EU). We explain why politicians may decide not to integrate, even if there are economies of scale and their voters prefer integration. We also examine under which conditions the opposite may occur. We find that integration is more likely to happen the more homogeneous the participating countries are, the larger the union, the smaller the country, and the lower the value politicians attach to national compared to international mandates. Moreover, we conclude that under some conditions conflicts of interests between voters and politicians can be anticipated by voters. Voters can then elect politicians with preferences different from their own, closer to (further away from) the pivotal actors in the union, and achieve (block) political integration in spite of the politicians’ divergent interests. In other circumstances conflicts between voters and politicians may be inevitable.