The capacity-building dilemma: managing competence-control tradeoffs in integration

Crises, shocks, and unforeseen events present EU governments with a dual challenge. On one hand, they need to increase problem-solving competence to better cope with the challenge. On the other hand, they need to increase control over problem-solving in order to minimize their maximal loss. Both impulses pull in opposite directions. The search for better problem-solving fuels demand for more EU competence in order to better use the advantages of transnational governance scale. The search for control, by contrast, fuels demand for renationalization in order to keep policy making in the domestic realm. Bellicist scholars assume that the preference for EU competence for crisis coping will dominate the preference for national control, and, hence push centralization and integration forward during crises (e.g., Kate McNamara). Classical Realists make the opposite assumption: control interests will dominate competence interests resulting in more renationalisation (e.g., Stanley Hoffmann). We assume, instead, that EU governments react to EU crises by attempts to increase their collective problem-solving competence and their individual control both at the same time. They shun pure centralization or nationalization and seek for intermediate solutions that offer a better mix of EU competence and national control. In this paper, we use evidence on joint procurement and emergency finance, to theorize how this competence-control tradeoff shapes institutional choice. We focus on four intermediate solutions in particular: EU regulation of national capacity, EU funding of national capacity, EU aggregation, and EU operation.