## Abstract

The paper analyzes the European Union’s codecision procedure as a bargaining game between the Council of the European Union and the European Parliament. The relative influence of these institutions on legislative decision-making in the EU is assessed under a priori preference assumptions. In contrast to previous studies, we do not consider the codecision procedure in isolation but include several aspects of the EU’s wider institutional framework. The finding that the Council is more influential than the Parliament due to its more conservative internal decision rule is robust to adding ‘context’ to the basic model, but the imbalance is considerably attenuated.

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## Notes

The codecision procedure applied to only 15 areas of community activity in its Maastricht version. This number increased in the Treaties of Amsterdam, Nice and Lisbon to now more than 80 areas of Community activity. The procedural rules in place today are essentially those laid down in the Treaty of Amsterdam, the only difference being that the Council now decides by qualified majority in all policy domains, including those which before required unanimity.

Empirical studies, e.g., König et al. (2007), generally confirm these theoretical claims.

See Crombez and Vangerven (2014) for an extensive survey.

The Commission has no formal gate-keeping power since the Parliament and the Council may – under Art. 225 and Art. 241 TFEU, respectively – request the Commission to submit an appropriate proposal. Moreover, in specific cases proposals can also be submitted on the initiative of a group of member states, on a recommendation by the European Central Bank or at the request of the Court of Justice (see Art. 294(15) TFEU).

Despite being of equal size, delegations are potentially not symmetric because the Council is fully represented in the sense that each of its members is involved in the negotiation, whereas the Parliament’s delegates are agents whose interests may or may not be completely aligned to those of their principal (see Franchino and Mariotto 2013). Empirically, Rasmussen (2008) finds that the Parliament’s conciliation delegation is representative of the chamber as whole.

Another strand of applied studies has focused on the intra-institutional distribution of power in the Council, using measures of voting power which originate in cooperative game theory. For example, Le Breton et al. (2012) use the nucleolus to analyze past and current decision rules in the Council. Felsenthal and Machover (1998) and Laruelle and Valenciano (2008) provide good overviews.

This abstracts away from agency problems and other reasons for why the preferences of the EP delegation might not be congruent or at least sensitive to the EP’s median voter.

The Nice decision rule is a triple majority requirement. In addition to traditional weighted voting with a quota of roughly 73.9 % (i.e., 260 out of 352 votes), a qualified majority must consist of at least a simple majority of member states (i.e., 15 out of 28) and must represent at least 62 % of the total EU population. Under the Treaty of Lisbon, the old system of weighted voting is replaced by a dual majority system. A qualified majority must now consist of at least 55 % of member states (i.e., 16 out of 28) and must represent at least 65 % of total EU population. Additionally, a blocking minority must include at least four Council members.

For illustration, consider the bargaining problem defined by \(\mathcal {U}=\{u_{\text {EP}}(x),u_{\text {CEU}}(x) :0\le x\le 1\}\), \(\pi =0.4\), \(\mu =0.6\) and \(q=0\). Now suppose that, e.g., due to a judicial decision, the bargaining set is restricted to \(\mathcal {U}'=\{u_{\text {EP}}(x),u_{\text {CEU}}(x) :0\le x\le 0.5\}\). Independence of irrelevant alternatives implies that the Nash solution is \(u^N=\big (u_{\text {EP}}^N(x),u_{\text {CEU}}^N(x)\big )=(0,-0.2)\) in both problems since \(u^N\in \mathcal {U}' \subset \mathcal {U}\). So despite the fact that the Council sees its most preferred alternative disappear, and the EP does not, the Nash solution is unchanged. Also see Dubra (2001).

The Kalai-Smorodinsky solution is defined by the following individual monotonicity axiom in lieu of Nash’s independence of irrelevant alternatives: if player

*j*’s aspiration levels \(a_j(\mathcal {U})\) and \(a_j(\mathcal {U'})\) coincide in two bargaining problems (\(\mathcal {U}, d\)) and (\(\mathcal {U}', d'\)) where the set of feasible payoffs \(\mathcal {U'}\) is a subset of \(\mathcal {U}\), then player*i*will receive at least as much utility in (\(\mathcal {U}, d\)) as in (\(\mathcal {U}', d'\)).The result that the Kalai-Smorodinsky agreement is closer to the institution with smaller status quo distance remains valid for multidimensional policy spaces. A proof is available from the authors upon request. While the bilateral bargaining situation between the EP and the Council can still be readily analyzed, multidimensional spaces make it much harder to predict which collective positions MEPs and members of the Council will adopt in the first place. A possible approach could be to use a point solution like the Copeland winner, or to assume an exogenous ordering of dimensions on which individuals vote sequentially.

The most common system is list proportionality with the member state as a single constituency and d’Hondt’s rule for seat allocation. But manifold deviations exist, see European Parliament (2014).

Yet, voting cohesion has increased across parliamentary sessions, especially for the three largest political groups (see Hix et al. 2007); there also exists an agreement between the latter to support the current European Commission.

Other facts such as, for example, the number of parliamentary groups into which MEPs are organized, or the degree of cohesion within these groups, are of a more transitory nature and should in our view not be held fixed behind the ‘veil of ignorance’.

A natural starting point seems to be some variant of a citizen-candidate model in which citizens can freely form parties and seats are distributed proportionally (see, e.g., Hamlin and Hjortlund 2000). An important difficulty in modeling proportional systems in general is that elections may fail to produce a clear winner, so that the policy output depends on the legislative bargaining game occurring after the election. The link between composition of the EP and policy formation is even less clear than for national parliaments. We conjecture that, in such a model, the absence of rents from government participation—as in the EP—will give rise to a very large number of dispersed parties in equilibrium.

Specifically, we draw \(\theta _j\) from a uniform distribution \(\mathbf {U}(-a,a)\) with variance \(\sigma _{ext}^2\), and then obtain \(\nu ^i=\theta _j +\varepsilon \) with \(\varepsilon \sim \mathbf {U}(0,1)\).

We obtain an estimate of the intra-Council distribution of power in EU28 according to the

*Shapley-Shubik-index*(see Shapley and Shubik 1954) as an intermediate result to the inter-institutional simulation and can also calculate it exactly by standard methods. This permits use of the former as a control variate for our SMP estimator. The variance reduction obtained in this way is up to 45 %. Remaining inaccuracies are due to the simulative nature of our results. —All results in this work were obtained using MATLAB computer programs. Source codes are available upon request.Specifically, in our simulations, the average distance between \(\pi \) and \(\mu \) in case of gains of trade and the Nice Treaty (Lisbon Treaty) decreases from 0.254 (0.166) under Scenario II to 0.225 (0.144) under Scenario III.

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## Acknowledgments

We thank Heiko Burret, Hartmut Egger, Sascha Kurz, Stefan Napel, Hannu Nurmi and two anonymous referees for many constructive comments. We have also benefitted from feedback on seminar presentations in Bayreuth, at the 2014 Spring Meeting of Young Economists and the 2014 Caen Summer School on Interdisciplinary Analysis of Voting Rules.

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## Appendix. Proof of Proposition 1

### Appendix. Proof of Proposition 1

###
*Proof*

For \(|\pi -q|=|\mu -q|\) the result is trivial. So consider gains from trade and \(|\pi -q|<|\mu -q|\). This implies \(u^*_{EP}=0\). The proof is split in two parts. First consider \(|\pi -q|\ge |\pi -\mu |\) such that \(u^*_\text {CEU}=0\). The Pareto frontier on \([-|\pi -\mu |,0]\) can be described by

and the straight line connecting *d* and \(u^*\) by

The Kalai-Smorodinsky bargaining solution is located where the two lines cross, i.e.,

Above inequalities can be easily obtained by recalling \(|\mu -q|/|\pi -q|>1\) from above. The result is equivalent to \(x^{\text {KS}} = \pi +\frac{\mu -\pi }{1+(\mu -q)/(\pi -q)} \in \big (\pi , \pi + \frac{1}{2}(\mu -\pi )\big )\). This completes the first part of the proof.

Now consider \(|\pi -q|<|\pi -\mu |\) such that \(u^*_\text {CEU}=-\big (|\pi -\mu |-|\pi -q|\big ).\) While this has no effect on the Pareto frontier, the straight line connecting *d* and \(u^*\) is now given by

The intersection point is then given by

This is equivalent to \(x^{\text {KS}} = \pi +\frac{\pi -q}{3} \in \big (\pi , \pi + \frac{1}{3}(\mu -\pi )\big )\) which completes the proof. \(\square \)

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Maaser, N., Mayer, A. Codecision in context: implications for the balance of power in the EU.
*Soc Choice Welf* **46**, 213–237 (2016). https://doi.org/10.1007/s00355-015-0910-7

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DOI: https://doi.org/10.1007/s00355-015-0910-7