Theory and Evidence
Chapter 6: The Development of the EU Budget System
The historical development of the EU budget system has involved the accumulation of a set of institutional constraints that limit the scope for EU policy activism in terms of redistributive and distributive policies. This process of EU integration is often underplayed relative to analyses of integration in terms of ‘big step’ Treaty agreements, such as the single market, single currency and enlargements. This chapter provides a structured narrative of the dynamics of institutional change in the EU budget system, where the incompleteness and limitations of the initial Treaty-based budgetary institutions have worked themselves out over time through a series of historical, political and fiscal contexts. This process of development has seen the accumulation of additional and complementary budgetary institutions that have had the effect of significantly constraining expenditure-generating EU-level policy activism. The granularity of perspective adopted in the narrative helps to reveal the importance of relationships between institutions; in isolation, institutions may be properly labelled as either stable or changing over time, however once institutions are viewed in combinations, or as part of systems of interdependent rules, the question of institutional change is more complex, requiring description of the conflux of interdependent causal relationships and some analysis of how they are compounded into an overall net effect that connects the different temporal states of the EU budget system. The narrative presented includes an increasing returns process operating at the level of sequences of institutional choice: once an initial institutional framework is established, there are strong increasing returns involved in the...
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