Regional Integration Theory
Summary and Keywords
Regional integration theory seeks to explain the establishment and development of regional international organizations. Key questions are why and under which conditions states decide to transfer political authority to regional organizations; how regional organizations expand their tasks, competencies, and members; and what impact they have on states and societies in their regions. Whereas regional integration theory started with a broad comparative regional and organizational scope in the 1950s and 1960s, it has since focused on European integration and the European Union.
The main (families of) theories explaining the development of European integration—rather than decision making and policy making in the EU—are intergovernmentalism, neofunctionalism, and postfunctionalism. The key debates in regional integration theory have taken place between variants of intergovernmentalist and neofunctionalist integration theory. Intergovernmentalism assumes national governments to be the key actors in regional integration. Governments use regional integration to maximize their national security and economic interests in the context of regional interdependence. Integration outcomes result from intergovernmental bargaining and reflect the regional preference and power constellations. Governments delegate authority to regional organizations to secure their bargaining outcomes but remain in control of regional organizations and the integration process. By contrast, neofunctionalism disputes that governments are able to control the integration process. Transnational corporations and interest groups as well as supranational actors are empowered by the integration process and shape it in their own interest. In addition, integration creates a variety of “spillovers” and path-dependencies that push integration beyond the intergovernmental bargain. More recently, postfunctionalism has enriched and challenged the theoretical debate on regional integration. In contrast to neofunctionalism, postfunctionalism assumes a backlash mechanism of integration. As regional integration progresses and undermines national sovereignty and community, it creates economic and cultural losers who are mobilized by integration-skeptic parties. Identity-based and populist mass politicization constrains regional integration and may even cause disintegration.
Regional integration theories have closely followed and adapted themselves to the development of European integration. They cover the establishment and progress of supranational policies and institutions but also the recent crisis of the EU. An exemplary review of their explanations of major development in European integration shows that they are more complementary than competing.
The Field of Regional Integration Theory
Definition and Research Questions
Regional integration theory (RIT) seeks to explain the establishment and development of regional international organizations (RIOs). A minimal definition of RIO has four necessary and jointly sufficient attributes: state members, organizational capacity, multilateralism, and geographical proximity. First, RIOs are established by states and have states as their members. Second, RIOs are organizations. They have a physical headquarters and their own staff; they have regular procedures such as meetings of their member states; and they have the capacity to make decisions and to act on them. Regional agreements or regional conferences alone do not qualify. Third, RIOs consist of more than two member states. Finally, their membership is geographically proximate and limited. RIOs are distinct from universal organizations such as the UN organizations and from organizations with limited membership if member states are geographically distant from each other (such as the Commonwealth).
Especially in the early days of RIT, theorists distinguished integration from (simple) international organization or cooperation. For instance, the term “integration” demarcated supranational regional organizations (such as the European Coal and Steel Community, ECSC) from intergovernmental organizations (such as the Organization for European Economic Cooperation, OEEC); or it denoted the achievement of a “sense of community” among the member states (Deutsch, 1957). In addition, early theorists often defined regional integration teleologically as a process aimed at some form of federal polity superseding the nation-state (Haas, 1968). Current RIT views integration as an open-ended process; it normally avoids both qualitative and teleological definitions beyond the preceding minimal definition. It employs terms such as “supranational” and “intergovernmental” to classify types of RIOs rather than to distinguish RIOs from other organizations.
RIT focuses on the (comparative) development and dynamics of regional integration. Its key questions are, first, why states decide to establish and how they design regional integration. Second, RIT asks under which conditions and how RIOs expand their tasks, competencies, and members over time. Third, it is interested in feedback processes. What impact do RIOs have on the states and societies in their regions, and how do these impacts condition the future development of RIOs? Finally, it theorizes about comparative development. Why are some RIOs, countries, or issue areas more integrated than others—and why do some stagnate or disintegrate whereas others progress? This “constitutional” and dynamic focus distinguishes RIT from approaches that seek to explain the workings of RIOs in stable institutional settings. In this sense, theories of decision making and policy making in IOs do not fall under RIT.
RITs describe and explain the development and dynamics of regional integration along three dimensions: (functional) scope, level (of centralization), and (territorial) extension (e.g., Börzel, 2005; Leuffen, Rittberger, & Schimmelfennig, 2013; Lindberg & Scheingold, 1970; Schmitter, 1969). Scope refers to the distribution of policy making competences between the member states and the RIO. For each policy, it ranges from exclusive national competence via mixed competencies to exclusive regional competence. Level denotes the distribution of decision making competences within the RIO between governments and non-governmental RIO bodies. It ranges from purely intergovernmental decision making via various degrees of pooling (majority voting) and delegation (to supranational bodies) to full supranational centralization. Finally, extension refers to the number of integrated countries or the coverage of the region by the RIO and its integrated policies. These three dimensions mirror the concepts of deepening (level), widening (extension), and broadening (scope), which are widely used to describe the multidimensional process of integration in the EU.
Historical Development: From Neo- to Postfunctionalism
RIT has waxed and waned in response to the actual development of RIOs and has regularly responded to influences from the political science subdisciplines of International Relations (IR) and Comparative Politics. This is because regional integration unites aspects of international cooperation and polity development. Theoretical innovations and refinements in these areas tend to be applied and adapted to the study of regional integration eventually. Because RIT focuses on the development and dynamics of RIOs, periods of change—both dynamic growth and crisis in regional integration—trigger heightened interest. By contrast, in times of institutional stability, theoretical interest tends to shift to the explanation of decision making and policy making. Histories of the field draw on both sources of theoretical change to account for the development of integration theory (see, e.g., Caporaso, 1998; Caporaso & Keeler, 1995).
Regional integration first emerged as a distinct area of study in the 1950s. The paradigmatic political science RIT at that time was neofunctionalism represented by scholars such as Ernst Haas, Leon Lindberg, Joseph Nye, and Philippe Schmitter. Federalism and Karl Deutsch’s transactionalism were also influential at the time, but federalism was predominantly a normative theory and transactionalism was concerned with community building more broadly than with RIOs. The advent of neofunctionalism coincided with the first wave of RIOs in the aftermath of World War II and decolonization. As this wave was not limited to Europe, the literature did not have an exclusive focus on the European Communities established at the time—even though it treated Europe as the most advanced example of regional integration. Ernst Haas’s magnum opus on the “Uniting of Europe” was indeed exclusively on the ECSC and the development of the Common Market. Yet many of his other books and articles examined various other Western European organizations in comparison with each other and with organizations from other regions (e.g., Haas, 1961; Haas & Schmitter, 1964). The same was still true for Joseph Nye’s Peace in Parts (Nye, 1971).
At this time, neofunctionalist regional integration theory was part of the IR debate between “idealism” and “realism.” Neofunctionalism drew on and elaborated the functionalist theories of international cooperation and organization at the core of IR idealism. They stipulated ways to overcome the balance of power behavior and recurrent warfare that realists considered endemic features of international politics. The upswing of supranational economic integration in the Europe of the 1950s appeared to contradict realist assumptions about the primacy of state autonomy and power.
Because regional integration stagnated or failed elsewhere, RIT came to focus increasingly on the European Communities in the 1960s. Here, the De Gaulle era also saw the rise of intergovernmentalism, the major contender of neofunctionalism in regional integration theory (Hoffmann, 1966). De Gaulle’s vision of a “Europe of fatherlands,” his rejection of Northern enlargement, and his opposition to further delegation and pooling of national sovereignty (the “empty-chair crisis”) seemed to discredit the idea of a progressive integration process that would end in a European federation. In emphasizing the central role of governments, state sovereignty and national identity, intergovernmentalism brought core assumptions of IR realism to RIT.
The ensuing “doldrums era” (Caporaso & Keeler, 1995), which was characterized by the absence of big leaps in integration, reoriented research on the European Community (EC) away from RIT altogether. Ernst Haas declared RIT “obsolescent” (Haas, 1975). Lindberg and Scheingold (1970) turned toward analyzing the EC as a (special) political system. Others focused on the individual policies of the Community and policy making within the existing institutional framework (Wallace, Wallace, & Webb, 1983).
The dynamic growth in European integration since the mid-1980s revived RIT. The Internal Market Program and Economic and Monetary Union (EMU) overcame the unanimity constraint of decision making in the Community, included many new policy areas, and led to unprecedented sovereignty transfers to supranational institutions. These developments were duly followed by a new wave of theorizing on European integration in the 1990s, which reproduced the neofunctionalist-intergovernmentalist divide, albeit in a modified form. Both sides started from different strands of institutionalism in political science (Aspinwall & Schneider, 2000; Hall & Taylor, 1996) and analyzed European integration exclusively. Neofunctionalism, now often labeled “supranationalism,” drew heavily on historical institutionalism to explain the momentum in European integration (Pierson, 1996; Stone Sweet & Sandholtz, 1998), whereas Andrew Moravcsik’s “liberal intergovernmentalism” (LI) (1993, 1998) applied central assumptions of neoliberal or rational institutionalism, which had established itself as the major challenger to IR realism. In spite of the “liberal” focus on domestic interests and conflicts as drivers of integration, the centrality of state interests, power, and control in regional integration still put LI in the intergovernmentalist camp.
The 1980s and 1990s also witnessed a second wave of RIO foundations and revivals worldwide—together with more globally oriented comparative-regionalist scholarship (e.g., Hettne, Inotai, & Sunkel, 1999; Solingen, 1998). Under the label of “new regionalism,” however, many authors broke with the allegedly Euro-centric, state-centric or organization-centric legacy of RIT and developed alternative theoretical approaches more suitable to conditions in other parts of the world (Acharya, 2016; Söderbaum, 2016). In spite of recent advances in comparative regionalism (Börzel & Risse, 2016), the RITs developed since the 1950s have largely remained a European and, more precisely, EU domain.
There are several reasons for this continuing fragmentation of the theoretical landscape. The motivations driving, the conditions enabling, and the outcomes defining European integration remain markedly different from other world regions. The combination of a sovereignty-taming strategy, a liberal-democratic, pluralistic, and economically developed membership, and the supranational features of EU integration limit the extent to which EU-centered theories are helpful in explaining other regionalisms (Acharya, 2016). Liberal or realist intergovernmentalist explanations of the emergence of RIOs have the greatest potential of traveling beyond Europe because they originate in general IR; start from low existing levels of regional cooperation; and assume a strong role for states, autonomy aspirations, and national interests (Börzel, 2016, pp. 44–48). Yet, whereas EU-centered RIT focuses strongly on endogenous feedback processes, studies of non-European regionalism emphasize the role of exogenous and interregional diffusion processes. Consequently, theories of European integration have not been applied systematically and comparatively beyond Europe; nor have theoretical approaches developed outside the European context made major inroads into the study of European integration.
Just as stagnation in the 1970s brought about a turning away from RIT, so did the relative saturation setting in toward the end of the 1990s. The debate between intergovernmentalism and neofunctionalism was widely considered stale and largely subsided. Rather, both rational institutionalists drawing on theories of American and Comparative Politics (e.g., Hix, 1994) and students of “multi-level governance” (e.g., Marks, Hooghe, & Blank, 1996) concurred in the view the EU had reached a more or less stable constitutional setting and that policies would change only marginally and incrementally. Therefore, research on the EU was advised to focus on politics and policy making within a stable set of institutions.
At the same time, however, two new theoretical developments reached RIT. First, the paradigmatic debate between rationalism and constructivism spilled over from IR (Christiansen, Jørgensen, & Wiener, 2001). Whereas rationalist theories assume that strategic and economic self-interest drive international politics, constructivists accord primacy to ideas and identities. The two successor theories of the older intergovernmentalist-neofunctionalist debate, LI and supranationalism, shared rationalist assumptions. By contrast, constructivist approaches analyze integration as a process of community formation driven by and transforming identities, values, norms, and policy ideas. To a considerable extent, constructivist theorizing in RIT has taken up and renewed earlier neofunctionalist and transactionalist theorizing on actor socialization, regional identity formation, and community building (Checkel, 2007; Risse, 2010).
Second, there has been growing awareness since the 1990s that European integration and democratic politics were becoming ever more intertwined. Not only had the impact of regional integration on national policy and peoples’ lives become stronger and more visible. In addition, regional integration was turning into a contested issue of domestic politics. Populist parties began to mobilize the economic and cultural losers of integration, and referendums on EU treaties and membership provided a venue for popular discontent with the EU. Against this backdrop, Liesbet Hooghe and Gary Marks (2009) formulated a postfunctionalist theory of European integration focusing on public opinion, party systems, and electoral politics as conditions of integration (or rather stagnation and disintegration). A few years earlier, Stefano Bartolini (2005) had brought concepts and theories from the theory of nation-state formation to European integration. This is a remarkable theoretical development because regional integration theory had never drawn primarily on Comparative Politics before. Even though postfunctionalism focuses on backlashes to regional integration, it is an indication of how deeply European integration had come to affect European states. For the same reason, however, postfunctionalism is arguably the theory that is least amenable to the comparative analysis of regional integration.
As earlier periods of dynamic change in European integration, the recent crises of European integration—from the euro crisis via the migrant crisis to Brexit—have refueled the scholarly interest in and debate on RIT. The theoretical debate on the crisis of European integration testifies to the continued relevance of the old dualism of neofunctionalism and intergovernmentalism (see, e.g., Ioannou, Leblong, & Niemann, 2015; Jones, Kelemen, & Meunier, 2016) but now also includes postfunctionalism as a theoretical alternative.
For the purposes of this article, I will stick to this three-cornered theoretical scene and debate. Textbook overviews usually portray a higher number of theories or approaches (e.g., Saurugger, 2013; Wiener & Diez, 2009) coming under a diversity of names. Yet only varieties of intergovernmentalism and neofunctionalism belong firmly to the canon of RIT. To this established dualism, I add postfunctionalism because of its relevance to recent developments in Europe. It is debatable whether there is a constructivist integration theory in its own right (Risse, 2009). Here, I subsume constructivist approaches under neofunctionalism and postfunctionalism, depending on the influence that ideas and identities have on the integration process. I classify intergovernmentalism, neofunctionalism, and postfunctionalism according to three categories: demand, supply, and feedback.
Demand results from the preferences of relevant actors in the integration process. Integration theories differ on who the relevant actors are, what motivates them, and why they seek (or reject) integration. Demand leads to negotiations on integration. It is here that supply conditions influence whether demand will be met. Supply depends on the actors that participate in the negotiations, their constellations of preferences and power, and the institutional context in which they negotiate. The interaction of demand and supply produces an integration outcome. This integration outcome generates feedback in turn. It either reproduces or changes the demand and supply conditions. A change in demand and supply, for example, new actors, transformed preferences, modified power relations, or a different institutional context, may subsequently alter the integration outcome.
This simple scheme helps to build a general classification of the three major RITs (Table 1). Clearly, the classification only captures core propositions of the theories and pays only limited attention to the variation we find in all three theories. First, the RITs share several important commonalities. They all assume that governments are central actors both in the formation of integration preferences and in the negotiations on integration. Moreover, they agree that welfare is an important goal of regional integration and that the differential power of governments is an important determinant of integration outcomes. By contrast, the theories disagree on whether these factors are sufficient to explain regional integration.
Table 1. Classification of Regional Integration Theories
Actors: Governments and …
national interest groups (liberal)
transnational interest groups and supranational organizations
national voters and parties
Goals: Welfare and …
autonomy and security (realist)
Actors: Governments and …
national voters and parties
Context: Power and …
Intergovernmentalism mostly gets by with the basic theoretical ingredients. Regional integration is the outcome of intergovernmental negotiations, in which governments’ relative bargaining power determines to which extent they can realize their preferences. Feedback is irrelevant.
The variants of intergovernmentalism introduce some nuance to this story. Traditional, realist intergovernmentalism assumes that states are unitary actors whose preferences are ultimately shaped by the quest for autonomy and security. States care about welfare if autonomy and security are not in danger. By contrast, LI assumes that societal groups are the fundamental actors and that governments pursue the dominant group’s welfare interest.
Neofunctionalism assumes a long-term positive feedback process, which strengthens actors beyond the state and pro-integration preferences. Initial integration creates and strengthens transnational interest groups, which benefit from the lowering of national borders and the relocation of authority to the regional level—and supranational organizations, which have an organizational self-interest in expanding integration further and use their resources to influence intergovernmental negotiations in this direction. Moreover, the norms, rules, and practices of regional integration constrain the effect of state power on intergovernmental negotiations, socialize actors into integration-friendly behavior, and may ultimately even transform citizens’ identities and loyalties.
By contrast, postfunctionalism argues that regional integration may create a backlash at the domestic level and undermine the integration process subsequently. Regional integration creates losers at home who not only fear for their welfare but also for their national self-determination, and bolsters integration-skeptic parties who mobilize these voters. These voters and parties produce integration-skeptic governments or constrain integration-friendly governments in their negotiations, especially if national rules of executive scrutiny and treaty ratification empower them. In the following sections, I will approach these three RITs one by one.
Intergovernmentalism shares its basic assumptions with rationalist institutionalism in IR. First, states (or governments) are the central actors in international politics, and they are (at least minimally or boundedly) rational actors. Second, international interdependence creates demand, and international institutions help to supply, international cooperation.
Demand: Interdependence and State Preferences
Realist and liberal intergovernmentalism make different but compatible assumptions about the demand for integration. Realist intergovernmentalism starts from a “national interest” defined by the government and fundamentally consisting in safeguarding the autonomy and the security of the state. This assumption seems to contradict regional integration fundamentally: Why would an autonomy-maximizing state engage in regional integration if this means, in essence, the pooling and delegation of state sovereignty? Yet formal state sovereignty and actual state autonomy often do not coincide. Especially for smaller states, regional integration may actually enhance autonomy in exchange for giving up formal sovereignty. Against powerful states outside the region, regional integration works like an alliance: It combines the resources of the regional states to provide for effective external balancing (Rosato, 2011). In the region’s internal relations, it serves to tame regional would-be hegemons by binding them to supranational decision making processes. This is the core of Grieco’s “voice-opportunity” thesis (Grieco, 1996).
The autonomy effects of integration not only vary between—large and small—states but also between policies. In this respect, realist intergovernmentalism distinguishes “low politics” and “high politics” and expects states to be willing to integrate in low-politics areas but to resist pooling and delegation in high-politics areas (Hoffmann, 1966). Low-politics areas do not reduce the autonomy of the state in a major way, either because they do not affect core state powers or because states have limited autonomy to begin with (as in the case of liberal states in the market economy). By contrast, high politics encompasses the core powers of the state in the areas of internal and external security as well as monetary and fiscal policies. According to the traditional intergovernmentalist logic, then, small states have a higher demand for regional integration than large states, and all states are more willing to integrate low-politics issues.
These low-politics areas—market-making and market-correcting policies, in particular—are the core domain of LI. LI follows a liberal theory of preference formation, which assumes that governmental preferences reflect the interests and power of societal groups, mediated by domestic political institutions (Moravcsik, 1993, p. 481). While general demand for regional integration results from international policy externalities, concrete integration preferences come primarily from “the commercial interests of powerful economic producers” (Moravcsik, 1998, p. 3). Governments pursue integration as “a means to secure commercial advantages for producer groups, subject to regulatory and budgetary constraints” (Moravcsik, 1998, p. 38). Depending on how competitive these powerful producers are on the regional market, states demand either market liberalization or protectionist policies. Moreover, they seek agreement on regulatory policies that benefit the competitiveness of domestic producers.
Domestic economic interests most clearly shape state preferences, the “more intense, certain, and institutionally represented and organized” they are (Moravcsik, 1998, p. 36) and the less “uncertainty there is about cause-effect relations” (Moravcsik, 1999a, p. 171). Conversely, “the weaker and more diffuse the domestic constituency behind a policy” (Moravcsik, 1999a, p. 171) and the more uncertain and modest “the substantive implications of a choice,” the less predictable are national preferences (Moravcsik, 1998, pp. 486–489; Moravcsik & Nicolaïdis, 1999, p. 61). Typically, domestic producers most clearly determine national preferences in commercial policies. General public policies, including macro-economic, environmental, or social policies, usually involve broader and more diverse constituencies including mass publics. Governmental autonomy depends on how unified and organized societal interests are. It is highest with regard to issues that do not affect citizens or domestic social groups directly, such as the design of institutions or general foreign policy. Moreover, the less calculable the effects of regional integration are on the member states, the more ideological or geopolitical preferences are likely to shape state preferences (Moravcsik, 1993, pp. 487–496).
Supply: Preference Compatibility, Bargaining Power, and Credible Commitment
Governments are the relevant actors in negotiations about regional integration. They negotiate, first, on the establishment or development of integration; second, on substantive policy arrangements; and, third, on the institutional design of regional integration. These negotiations are only analytically distinct: They go on in parallel, are linked, and need to be concluded together successfully to produce integration.
First, regional integration requires mutually beneficial arrangements for all participating states. For regional integration to produce mutual benefits, state policies need to be mutually interdependent and state preferences need to be congruent or compatible. Without mutual policy externalities, governments do not see value in regional integration; without compatible policy preferences, for example, on environmental protection or health standards, governments are unable to agree on a common policy.
Second, in addition to producing mutual benefits, intergovernmental negotiations consist in hard bargaining about their distribution among the participating governments, including “credible threats to veto proposals, to withhold financial side payments, and to form alternative alliances excluding recalcitrant governments” (Moravcsik, 1998, p. 3). The distribution of integration benefits is mainly conditioned by state bargaining power, which is a function of asymmetric interdependence and outside options between states. Those states that are less dependent on regional integration because they are less affected by negative externalities, or have credible alternative options to deal with them, are in a position to influence the distribution of gains in their favor and extract concessions and side payments by the more dependent states.
Third, governments negotiate on the institutions designed to secure their agreements. Institutional choice is again driven by governments—and by their concern about each other’s commitment to and future compliance with the substantive deals reached. The institutions of regional integration are instruments of the states. Delegation and pooling serve to remove agreements from the influence of domestic actors who might build up pressure for noncompliance if their integration costs or losses increase. They also remove them from decentralized intergovernmental control, which may be too weak to secure compliance, in particular if powerful member states violate the rules (Moravcsik, 1998, p. 9, 73). The degree to which governments pool and delegate their decision making competences depends on the value they place on the issues and substantive outcomes in question and on their uncertainty about the future behavior of other governments. The more a government benefits from a cooperative agreement, and the higher the risks of noncompliance by other governments are, the higher is its readiness to cede competences to the RIO to prevent potential losers from revising the policy (Moravcsik, 1998, p. 9, 486f.).
Integration Outcomes and Feedback
The main factors that explain the outcomes of regional integration—and the variation in integration between countries and policies—are interdependence, preference compatibility, and commitment problems. In addition, if interdependence spreads to additional policies or countries, and policy preferences among governments converge, a broadening or widening of integration is likely. If the incentives or the costs of noncompliance increase, we are likely to see a deepening of integration. Policies characterized by more interdependence, less state autonomy costs, higher compatibility of state preferences, and more commitment problems are more integrated. So are states that are more affected by externalities and have mainstream preferences.
Intergovernmentalism does not theorize any systematic feedback processes of regional integration. Regional integration remains under the control of the governments; its working reflects and reproduces the intergovernmental constellation of preferences and power that produced it. The institutions that governments establish are designed to lock in intergovernmental bargains, not to enable autonomous supranational agency and endogenous change. If change occurs, it is exogenous to the integration process. It could either originate in the international environment outside regional integration or bottom-up in the domestic environment of the member states.
In contrast to the rational-institutionalist roots of intergovernmentalism, neofunctionalism draws on two other variants of institutionalism: historical institutionalism and sociological institutionalism (Hall & Taylor, 1996). Early neofunctionalism did not formulate these institutionalist underpinnings explicitly, nor did it distinguish clearly between them. That has changed with the elaboration of neofunctionalist theory since the 1990s. Historical institutionalism does not fundamentally question the rational-institutionalist assumption that governments establish RIOs to further their national interest, but it disputes that institutions continue to work reliably and efficiently according to the interests of their founders—who are often unable to foresee or correct the unintended consequences of the institutions they created. In this perspective, regional integration is a “critical juncture” producing “path dependency” (Pierson, 1996). Sociological institutionalism assumes that social actors follow a “logic of appropriateness” (March & Olsen, 1989). Both their preferences and their behavior are shaped by ideational factors (identities, values, norms, and knowledge), which are institutionalized in their social environment and to which they are socialized. In this perspective, regional integration establishes an ideational and institutional environment that transforms the identities, values, and norms of actors.
In the course of RIT development, the initial disagreements between neofunctionalism and intergovernmentalism have narrowed considerably. LI did away with the state-centrism of traditional intergovernmentalism and integrated transnational interdependence, societal interests, and supranational institutions—factors that had played an important role in neofunctionalist theory from its beginnings. At the same time, more recent neofunctionalist theorizing concedes that LI explains the initial integration outcomes well on the basis of the intergovernmental preference and power constellation (e.g., Pierson, 1996). Early neofunctionalist theorizing had subsumed demand under favorable background conditions such as an industrial-urban environment, a pluralistic social structure, interest groups seeking to maximize their economic benefit, and ideologically homogenous national elites and party systems (Haas, 1961) but lacked an account of intergovernmental bargaining.
The relevance of feedback remains the major difference between the two theories. Path-dependence and socialization are the two positive feedback processes that continue to define neofunctionalist thinking on regional integration and distinguish it from intergovernmentalism. Accordingly, I will not discuss what neofunctionalism has to say about the original or initial demand for regional integration. In line with the positive feedback logic of neofunctionalism, “demand” should be read as “demand for additional integration,” and “supply” as “supply for additional integration,” induced by the existing state of integration.
Neofunctionalist RIT subsumes demand for more integration under the concept of “spillover” (Haas, 1968, pp. 283–317) and distinguishes different types: functional (or sectoral), geographic, political, social, and institutional (or cultivated) spillover (Niemann, 2006; Schmitter, 1969; Tranholm-Mikkelsen, 1991). Note that I treat spillover strictly as a demand-generating process, not as one of several possible integration outcomes (e.g., in contrast to “spillback” or “muddling through”; Schmitter, 1970).
Functional spillover results from negative externalities between an integrated and a nonintegrated policy sector, which prevent governments from reaping the full benefits of integration. It creates incentives to undertake additional, previously unintended steps of integration so that interdependent sectors are regulated at the same level. Functional spillover is the most important driver for the broadening of integration.
Geographical spillover results from negative externalities between differentially integrated states (rather than sectors). On the one hand, regional integration establishes larger markets, which divert trade and investment from nonmember states. On the other hand, nonmember states may undercut the regulatory standards of the integrated countries. Both situations produce incentives for the widening of regional integration.
Political spillover is a reaction of domestic political actors and citizens to initial integration steps. To the extent that the RIO offers them enhanced opportunities to realize their political goals and increases their welfare, they redirect their expectations and activities to the new center, form transnational organizations and coalitions, and eventually develop new political loyalties, collective identities, and transnational solidarities (Haas, 1968, p. xxxiv). Political spillover increases domestic demand for integration.
Supranational organizations promote spillover in two ways. For one, they provide a forum for the contact and exchange of elites from the member states. In this context, they socialize individuals—including RIO officials and national officials involved in supranational policy making—into integration-friendly ideas and behaviors. This is social spillover (Niemann, 2006, pp. 37–42; see also Checkel, 2007). Social spillover makes national preferences converge, softens intergovernmental bargaining, and strengthens legitimate solutions, that is, policies and decisions that are in line with the institutionalized normative principles of regional integration, against power-based outcomes.
In addition, supranational organizations actively shape the integration process through institutional spillover. First, supranational organizations have a stake in the success and progress of regional integration. They therefore assist governments in finding issues and reaching agreements that maximize their mutual benefits. This is what Haas calls “upgrading of common interests” (1961, p. 368). Second, they use their delegated competencies and gaps in the integration agreements to push for more integration and expand their own powers. Third, they “cultivate” functional and political spillover by establishing linkages between policy sectors and assisting the establishment of transnational organizations and coalitions (Nye, 1971, p. 59; Tranholm-Mikkelsen, 1991, p. 6).
All spillovers refer to mechanisms that undermine the stability of the intergovernmentally negotiated integration arrangements and create demand for further integration. To explain how this demand actually translates into “more integration,” neofunctionalism additionally needs to show why governments cannot effectively “fight back.”
The mechanisms that lead governments to maintain and even expand regional integration, rather than seeking “renationalization,” when confronted with its unanticipated and unintended consequences, broadly fall under “path-dependence” (Pierson, 1996). The most relevant mechanisms are endogenous preference change, prohibitive exit costs, and decision traps.
In contrast to intergovernmentalism, neofunctionalism expects that state preferences not only shift (exogenously) because of geopolitical or domestic change, but also (endogenously) converge in response to integration itself. For instance, market integration is likely to strengthen competitive firms and sectors that benefit from integration, and weaken noncompetitive actors. This process shifts the domestic power balance toward pro-integration groups. Moreover, the socialization that government officials, parties, and interest groups experience by participating in regional integration may strengthen their integration-friendly attitudes. Owing to endogenous preference change, integration negotiations triggered by spillovers can start from a more compatible and more pro-integration intergovernmental preference constellation.
Even if endogenous preference change does not obtain, and governments aim for correcting and reversing integration, disintegration may be less attractive than maintaining or even advancing integration. First, integration creates high and irreversible “sunk costs” of adapting national policies and administrations to integrated policy regimes. Second, integration is likely to reinforce the interdependence that initially caused it. Market and policy integration encourages economies of scale, transnational connections, and exchanges that would be lost in the case of disintegration. These costs reduce the attractiveness of alternative options and the credibility of exit threats in intergovernmental negotiations.
Finally, the decision making rules for changing regional integration are usually highly restrictive. They regularly require unanimity among governments and often national ratification, too. That makes intergovernmental integration agreements hard to achieve but also hard to change once they are in place. Even if a majority of governments sought to reverse the existing level and scope of integration, some might benefit from it and veto changes; and even if all agreed that integration had produced undesired outcomes, they are unlikely to agree on the direction of desired reform. Scharpf (1985) has termed this constellation the “joint-decision trap.” In addition, governments may have made rhetorical and normative commitments in earlier integration decisions that they find difficult to renege on without losing face or legitimacy (Schimmelfennig, 2001).
Integration Outcomes and Feedback
Generally, neofunctionalism expects a dynamic and progressive integration process, which eludes the exclusive control of governments thanks to spillovers and path-dependence. This is no automatic trend, however. Whether spillovers translate into broadening, deepening, or widening depends on the extent of preference change that has taken place, the relative costs of renationalization vs. more integration, and the decision making mechanisms in place. The intensity of initial integration steps thus plays an important role. The deeper the initial integration, the more likely it produces both spillover and path dependency. Conversely, integrated policies run a high risk of stagnation and disintegration in the event of intergovernmental contestation and crisis if they remain at subcritical levels of transnational interdependence and supranational capacity.
From a neofunctionalist vantage point, the intergovernmental negotiations that intergovernmentalism focuses on are embedded in a dynamic transnational and supranational context that undergoes significant change over time. While intergovernmental negotiations are the proximate producers of change in regional integration, in a longer-term perspective, they are also the products of spillovers and path-dependencies generated by earlier integration (Caporaso, 1998, p. 350; Stone Sweet & Sandholtz, 1998, p. 16, 26).
Postfunctionalism has its roots in Comparative Politics and theories of democratic politics rather than in IR and institutional theories. It builds on multilevel governance, party, and electoral research. The concept of multilevel governance starts from the observation that political authority is dispersed across numerous spatial and functional jurisdictions. Regional integration constitutes one rung of the spatial “ladder of governance” (Hooghe & Marks, 2016, p. 15); in addition, RIOs in the same region may be functionally differentiated, for example, the EU for the economy, NATO for security, and the Council of Europe for human rights.
In order to explain the allocation of competences within a system of multilevel governance, Hooghe and Marks (2016) distinguish a functional—roughly compatible with neofunctionalist and intergovernmentalist theorizing—from a postfunctional logic. Postfunctionalism agrees with the sociological-institutionalist assumption that jurisdictions follow communities based on common cultures and identities. As community beings, individuals have a fundamental interest in the collective self-determination of their community—in the two dimensions of national and democratic self-determination. This fundamental goal is likely to conflict with the functional logic of efficient authority allocation: Whereas efficiency often calls for an expansion of political units, self-determination is better served in smaller units.
Finally, postfunctionalism starts from the assumption that regional integration has become firmly embedded in the mass politics of the member states. In other words, it has become “politicized.” Explanations of regional integration therefore need to start with the attitudes of citizens, their collective identities, and their support for integration. They further need to take into account the structure of party systems and party competition on European integration as well as electoral and referendum systems. The rise of self-determination concerns and the increasing politicization of regional integration constrain both the intergovernmental bargains theorized by intergovernmentalism and the spillovers theorized by neofunctionalism.
As in the case of neofunctionalism, the discussion of demand and supply does not focus on the initial establishment of integration but on the feedback of existing integration. First, postfunctionalism developed when European integration was already far advanced. Second, it does not fundamentally question the “functional” (neofunctionalist and intergovernmentalist) accounts of the early integration process.
As in neofunctionalism, the existing state of integration creates the relevant demand. In contrast with neofunctionalism, however, postfunctionalism focuses on the self-determination rather than the efficiency costs of integration. Rather than creating transnational and supranational pressure for more integration, self-determination concerns typically trigger domestic pressure for less integration.
Neofunctionalist authors started out assuming that European integration operated in the context of a “permissive consensus” (Lindberg & Scheingold, 1970, p. 41). Citizens related to the integration process with benevolent indifference; European integration was not a major controversial issue in political debates, party competition, and elections. By contrast, postfunctionalist authors claim that the “permissive consensus” has been replaced by a “constraining dissensus” (Hooghe & Marks, 2009, p. 5) in the course of politicization.
Generally, politicization is an effect of progress in institutional integration (Hooghe & Marks, 2009; de Wilde & Zürn, 2012). Community formation at the regional level cannot keep pace with the institutional integration. Not only are national identities sticky; elites participating in transnational exchange are also more affected by the socialization opportunities of integration than the majority of citizens. Citizens with exclusive national identities are especially likely to be skeptical of European integration (Hooghe & Marks, 2009, p. 12). The more that integration broadens, deepens, and widens, the more it undermines the collective self-determination of national communities—in particular, if broadening includes policies that are relevant for the identity and solidarity of the community, deepening constrains national democracy, and widening increases cultural heterogeneity.
As regional integration progresses and penetrates the member states, it transforms existing political cleavages. Whereas the left-right cleavage has dominated democratic politics of the EU member states after World War II, regional integration contributes to the rise of a new cleavage, which complements—and is beginning to supersede in some countries—the old left-right lines of party competition. This cleavage pits the economic and cultural winners and losers of integration against each other (Kriesi et al., 2006).
Supply: Party Systems and Democratic Institutions
The integration cleavage creates distinct opportunities and threats for parties (Hooghe & Marks, 2009, pp. 18–19). For the mainstream parties of the center-left and center-right, the new cleavage is a threat. Because they have been the main supporters of European integration in the past, they cannot credibly mobilize Euroskeptic voters. Mainstream parties are also likely to be split on the issue of European integration. Parties of the radical right and left do not have a credibility problem. They are easily able to reconcile opposition against European integration with their nationalist and anti-elite programs. They are therefore the biggest winners of the new cleavage and the politicization of European integration.
In the course of politicization, European integration has turned from a marginal to a core issue of national party competition. Parties reorient their programs toward the new cleavage, new parties emerge and succeed, and European integration turns into a major issue of electoral campaigns and coalition formation. In turn, the politics of regional integration becomes subject to party competition.
First, postfunctionalism expects that party—rather than national—preferences shape negotiations and coalitions at the regional level. Second, politicization constrains the room of maneuver that governments enjoy in European negotiations. Rather than freeing governments from the constraints of domestic politics, as intergovernmentalists assume, regional politics becomes subject to increased media attention and scrutiny by opposition parties. Governments need to focus more on the ratification chances of integrated policies—and their own reelection chances—in intergovernmental negotiations than at the time of the “permissive consensus.” Consequently, intergovernmental bargaining becomes harder, and negotiations are more likely to fail. To what extent politicization affects regional integration depends on the “transmission belts” between national and regional politics: elections, government formation, and referendums. Referendums have proven to be a particularly powerful mechanism of politicization, Euroskeptic mobilization, and integration failure.
Integration Outcomes and Feedback
Postfunctionalism expects a self-defeating or self-limiting integration process. The more that institutional integration progresses, the more it constrains the collective self-determination of existing national communities, becomes politicized, and mobilizes resistance at the national level. These effects cause integration to stagnate or even reverse. This process varies across policies and countries. Policies that are perceived to threaten national sovereignty, identity, and solidarity are less integrated and less subject to backlash than those that are less relevant to the self-determination of national communities. Likewise, countries in which citizens have strong exclusive national identities are less integrated and more likely to exit.
Regional Integration Theory and European Integration
How have regional integration theories explained major developments of European integration in the past three decades? The exemplary overview starts with two major projects of policy integration: the internal market and EMU. Subsequently, I examine two important institutional developments of the same period: Eastern enlargement and parliamentarization. Finally, I review the recent crises of the EU in light of regional integration theory.
In the Single European Act of 1986, member state governments agreed to achieve an internal market based on the “four freedoms” (of movement for goods, services, labor, and capital) by 1992. This was the first major revision of the Treaties of Rome of 1957 and the start to what is still the core project of European integration to this date. It also revived RIT and the debate between (liberal) intergovernmentalism and neofunctionalism (or supranationalism).
In the LI perspective, the internal market was the effect of a combination of factors. First, the member states needed to respond to both heightened interdependence (owing to increasing economic globalization) and the “Eurosclerosis” of the 1970s, a period of stagflation and economic decline. Second, the convergence of economic preferences among the major member states since the early 1980s facilitated a common liberal, market-opening agenda to respond to these challenges. Third, in order to bring the economically weaker southern member states on board, the Community upgraded its cohesion policy and structural funds for interregional redistribution as a side-payment (Garrett, 1992; Moravcsik, 1991).
In the neofunctionalist perspective, however, an alliance between transnational economic actors and supranational organizations was the main driver of the internal market program. Firms and transnational economic interest groups that were dissatisfied with the stagnation of market liberalization used two venues to overcome intergovernmental blockage and resistance. First, business actors brought disputes about the common market before national courts, which then referred these cases to the European Court of Justice (ECJ) under the preliminary ruling procedure. The ECJ used these cases as precedents to establish binding general pro-integration legal principles (such as most prominently the principle of “mutual recognition” in the Cassis-de-Dijon ruling), on which the internal market program was based (Burley & Mattli, 1993; Garrett & Weingast, 1993). In addition, transnational business lobbied the European Commission who then mobilized a coalition of national governments (Sandholtz & Zysman, 1989).
The main point of contention between LI and neofunctionalism regarding the internal market program was thus the centrality of intergovernmental vs. supranational and transnational actors in the process. Both theories can explain the outcome and agree on globalization and economic decline as background factors creating demand for a deepening of the Common Market. The neofunctionalist explanation also points to the importance of favorable pro-market domestic preferences (Sandholtz & Zysman, 1989). In turn, Moravcsik concedes that supranational entrepreneurs in the Commission (and the Parliament) played a relevant role in overcoming domestic coordination problems in the member states by initiating the Single European Act, mobilizing a latent transnational constituency, and generating a more efficient outcome (Moravcsik, 1999b, pp. 292–298).
Economic and Monetary Union
In the Treaty of Maastricht of 1992, the member states agreed on the creation of a single currency by 1999, making EMU (Economic Monetary Union) the most ambitious integration project of the EU and monetary policy its most centralized policy. In contrast with the internal market program, EMU has inspired realist (intergovernmentalist) explanations. In addition to external balancing against the dominance of the U.S. dollar, monetary integration may be seen as an act of internal balancing against the dominance of the deutschmark. By disempowering the Bundesbank and delegating monetary policy to the EU, the other member states hoped to gain net autonomy. Grieco illustrates his “voice-opportunity” hypothesis with EMU (1996). This explanation begs the question, however, why Germany should agree to losing autonomy. It is often suggested that the monetary union was the price Germany had to pay for its neighbors’ consent to reunification—yet the German government had already agreed to monetary union in principle before reunification was on the horizon. Reunification likely speeded up the negotiations, however.
As in the case of the internal market, LI explains monetary union by a combination of interdependence, preference convergence among the major member states, asymmetrical interdependence and bargaining power, and the need to delegate sovereignty to reap the full benefits of cooperation (Moravcsik, 1998). First, monetary policy interdependence had increased or was expected to increase owing to the growth of intra-Community trade and capital mobility in the internal market. Second, France had shifted its monetary policy from its traditional soft-currency stance to a commitment to a strong French franc and low inflation. At the same time, Germany’s export-oriented industry was interested in reducing the appreciation pressure on the deutschmark that harmed its competitiveness. Third, however, France and Germany continued to disagree about the governance and goals of monetary union. Thanks to superior bargaining power—Germany was both dominant in the Community’s monetary policy and more constrained domestically—Germany was largely able to design monetary union according to its preferences for an independent central bank, price stability, and the prohibition from financing state debt. Finally, the member state governments deemed the supranational centralization of monetary policy necessary to institutionalize a credible commitment against both domestic pressure for devaluation and speculative attacks by transnational financial markets.
By contrast, neofunctionalism highlights a series of spillover effects. Pointing to functional spillover, heightened monetary interdependence was endogenous to the internal market program and the existing European Monetary System (EMS). The internal market increased the relevance of transaction costs and uncertainties of currency exchange. In addition, the removal of barriers to the free movement of capital increased the risk of currency speculation and threatened to undermine the stability achieved in the EMS (Dyson & Featherstone, 1999, p. 3). Finally, both transnational and supranational actors were active and influential in the run-up to monetary union (Cameron, 1995). Large European multinational corporations lobbied for monetary integration; transnational networks of central bank officials and economists organized by the Commission in European committees proposed the main parameters of what was later endorsed by governments and written into the Treaty of Maastricht.
Yet neither LI nor neofunctionalism explains the differentiated integration of EMU well. The British, Danish, and Swedish opt-outs from the Eurozone are difficult to attribute to weak interdependence or divergent monetary policy preferences but reflect sovereignty and identity concerns mobilized (in Denmark and Sweden) in referendum campaigns (Leuffen et al., 2013). Differentiation in EMU fits a broader pattern of differentiated integration in the EU, according to which durable opt-outs are most frequent in areas of core state powers and for societies with strong, exclusive national identities (Winzen & Schimmelfennig, 2016).
Up to the early 2000s, enlargement had not been a major dependent variable of RIT. This changed, when the EU set out to admit 12 new member states in 2004 and 2007. At that time, the theoretical debate on enlargement was framed along the lines of the rationalist-constructivist IR debate (Schimmelfennig & Sedelmeier, 2002), which is, however, easily translated into RIT.
LI largely explains the initial preference constellation among the member states by different degrees of interdependence with the Central and Eastern European countries (CEECs) and different distributional implications of enlargement. Countries at the Eastern border of the EU have tended to favor enlargement to the East, and the poorer and less highly industrialized member states have tended to oppose enlargement because they feared budgetary and economic competition with the relatively poor and low-tech CEECs. Yet LI struggles with explaining the EU’s decision in favor of enlargement given that the opponents of enlargement had superior bargaining power and the mere association of the CEECs would have made EU member states better off (Schimmelfennig, 2001).
Intergovernmentalist solutions to the puzzle come in three varieties. Skålnes’s (2005) realist explanation argues that common security interests trumped economic disagreement. When war broke out in former Yugoslavia, the EU therefore went forward with enlargement in spite of possible economic losses. Moravcsik and Vachudova (2003) argue that the costs of Eastern enlargement were actually modest enough to prevent severe distributional problems for the old member states. Finally, Christina Schneider (2009) points to “discriminatory membership,” that is, the use of asymmetrical interdependence between the EU and the CEECs to impose accession conditions—such as the phasing-in of agricultural subsidies—to reduce the costs of enlargement for the prospective economic losers among the member states.
By contrast, neofunctionalist explanations focus on the membership norms and practices institutionalized in European integration—such as the liberal-democratic values enshrined in the treaties of the EU, past promises of inclusion and support, and the precedent of Southern enlargement, when the EC had first admitted newly democratized and comparatively poor candidates (Schimmelfennig, 2001; Sedelmeier, 2005). The advocates of enlargement in the East and the West used these norms and practices to put normative pressure on the reluctant member states to consent to enlargement. Moreover, the different starting points for accession negotiations correspond to the progress CEECs had made toward democratic consolidation (Schimmelfennig, 2001).
The empowerment of the European Parliament (EP) has been a major institutional development of the EU. Whereas a parliamentary assembly had been in existence since the beginnings of European integration, its powers had been confined to giving nonbinding opinions on legislation and censuring the European Commission. From the late 1980s onward, however, the EP has acquired the right to co-decide, with few exceptions, the EU’s laws and budget together with the Council. It votes on the EU’s treaties. It formally approves the Commission and informally but effectively nominates the candidate of the winning party of the EP elections to be Commission president. The theoretical debate has focused on explaining the expansion of the EP’s legislative powers.
In an intergovernmentalist perspective, parliamentarization is a puzzling development (Rittberger & Schimmelfennig, 2006, pp. 1151–1155). First, governments cannot expect to attain their policy goals better by empowering the EP than by keeping negotiations intergovernmental, given that EP elections are not synchronized with national elections and that voters are likely to vote for opposition and protest parties (Hix, 2002). Second, the empowerment of the EP does not increase efficiency or commitment (Pollack, 2003, pp. 257–258). It complicates the legislative process by introducing another veto player and additional readings; it reduces decision making speed; and it provides no instrument for improving member state compliance.
By contrast, neofunctionalism attributes parliamentarization to institutional spillover. According to the neofunctionalist explanation, the legislative empowerment of the EP was an unintended by-product of the internal market program (Rittberger, 2005). When the member states launched the program, they committed themselves to qualified majority voting (QMV) in the Council, deemed necessary to increase the speed of decision making and to overcome opposition to market-enhancing regulation. At the same time, however, QMV allowed the EU to overrule national governments and parliaments and thereby break the chain of indirect democratic legitimacy of EU legislation. Members of Parliament in national parliaments as well as in the EP mobilized against this impending democracy deficit. Because representative democracy is a shared norm among the member states of the EU, parliamentarians were able to put effective normative pressure on the governments. Because governments did not want to forego the efficiency gains of QMV, they reluctantly consented to expanding the legislative powers of the EP, the only EU body vested with direct democratic legitimacy (Rittberger, 2005, pp. 150–152). This spillover mechanism corresponds to the neofunctionalist explanation of Eastern enlargement.
Subsequently, the EP could use its limited legislative competences to engage in institutional bargaining with the governments in order to expand its powers further. Farrell and Héritier (2003) stipulate several asymmetries favoring the EP in its conflict with the Council over legislative powers. First, whereas the Council is primarily interested in the substance of the legal act, Parliament has an institutional interest in legislative power. It is thus willing to capture and block individual pieces of legislation in order to advance its prerogatives. Second, the EP has a longer time horizon and a lower sensitivity to failure than the governments.
The EU in Crisis
Since 2010, European integration has been in crisis almost constantly. First, the euro crisis of 2010 threatened the EU with the collapse or shrinking of the Eurozone; second, the migrant crisis of 2015/2016 put the Schengen/Dublin regime of free movement under pressure; third, the British vote to leave the EU in June 2016 started the first exit procedure of a member state from the EU. EU scholars have turned to RITs to analyze the crises (e.g., Ioannou et al., 2015), but also to explore what RIT has to say about disintegration (Vollaard, 2014; Webber, 2014). Publications have focused on the euro crisis so far, whereas analyses of the migrant crisis are in the making, and Brexit still awaits RIT analysis.
Intergovernmentalism focuses on the centrality of intergovernmental bargaining in the euro crisis. In an LI perspective (Schimmelfennig, 2015), the intergovernmental preference constellation was characterized by a mix of a common interest in avoiding the breakdown of the Eurozone, produced by strong interdependence among the member states, and conflicting interests regarding the distribution of the adjustment costs, which originated in the different fiscal positions of the northern and southern member states. These mixed motives constituted a “chicken game” situation characterized by hard bargaining and brinkmanship but ultimately resulting in agreement on major steps toward more integration (such as the European Stability Mechanism, the Fiscal Compact, and the Banking Union) designed to strengthen the credibility of member state commitments to the euro. At the same time, the asymmetrical interdependence in the Eurozone produced a burden-sharing outcome and institutional design that reflected the preferences of Germany and the northern member states predominantly.
From a neofunctionalist vantage point, however, the intergovernmentalist focus on crisis bargaining neglects how much the process was shaped by the path-dependence of the original decision for and design of monetary union. It resulted in functional and institutional spillovers, endogenous interdependence, converging preferences, transnational pressures, and a powerful supranational organization—the European Central Bank—whose policies were crucial for the survival of the Eurozone (Jones et al., 2016; Niemann & Ioannou, 2015; Schimmelfennig, 2014).
By contrast, postfunctionalism is unable to explain the leap in integration during the euro crisis. To be sure, postfunctionalism accounts for the unprecedented politicization of European integration in the euro and the migrant crisis. This politicization has contributed to the threat of disintegration and the hard intergovernmental bargaining over the management of the crises. In the euro crisis, however, governments have been able to preserve and consolidate the Eurozone—not least by forming mainstream and technocratic governments and limiting referendum opportunities, thereby shielding intergovernmental negotiations from the impact of politicization (Schimmelfennig, 2014).
The theoretical debate between LI and neofunctionalism on the euro crisis mirrors the complementary role of both theories for explaining the internal market and EMU. Neofunctionalism points to the endogenous spillovers of earlier integration, which create demand for more integration and influence its institutional parameters. LI emphasizes exogenous interdependence, domestic preferences, and intergovernmental bargaining. Largely, the debate is about the relative importance rather than the validity of these factors.
More importantly, however, LI and neofunctionalism fill each other’s blind spots. Neofunctionalism has the account of institutional effects that LI lacks, whereas LI has the account of intergovernmental bargaining that is missing from neofunctionalism. Both need to come together to produce sufficient explanations of integration. Moreover, the explanations of enlargement and, most clearly, parliamentarization support the scope conditions of LI: the more integration is about general institutional developments rather than specific policies, and the more uncertain and diffuse its material consequences are, the more important institutionalized ideas and norms become for explaining integration. Finally, as the cases of differentiated integration in EMU and beyond have shown, postfunctionalism becomes relevant as European integration moves into areas of core state powers (Genschel & Jachtenfuchs, 2014), affects countries with strong national identities, and becomes subject to popular referendums.
For the past 60 years, RIT has accompanied and explained Europe’s unique experiment in regional integration. The initial ambition of developing a comparative theory of regional integration proved elusive—partly because regional integration in other parts of the world failed, stalled, or moved in other directions; partly because RIT has come to focus on Europe exclusively. RIT has also lost its initial quasi-monopoly for theorizing European integration. Analyses of the EU now routinely work with mainstream theories from comparative politics, general IR, policy analysis, political sociology, and (international) political economy. The study of regional integration has clearly moved away from its erstwhile focus on paradigmatic debates between grand theories. Yet RITs are not only firmly established in the theoretical canon for the study of RIOs. They remain essential for analyzing and explaining the dynamics of European integration and they continue to evolve by responding to developments in European integration—such as the current EU crises—and by integrating concepts and theories from neighboring fields—such as IR constructivism and postfunctionalism.
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