infonet-economy

Institutional change is guided by rules. In the European Union these rules are given by Art. 250-252 of the Treaty of Amsterdam. We analyze these articles as games in extensive form and characterize and compare the equilibria of these games. The analysis identifies the decisive actors and the conditions under which it comes to institutional changes in the European Union. In addition we analyze the tendencies for centralization inherent in these decision procedures as well as their ability to guarantee conflict-minimizing compromises between the institutional actors. We show that the historical evolution from Art. 250 over Art. 252 to Art. 251 implies an improved position of the European Parliament. Contrary to part of the literature we show that the move from Art. 250 to Art. 252 may have
important consequences for the policies to be implemented and that the move from Art. 252 to Art. 251 improved the position of the European Parliament. Hence, our model is able to resolve the empirical anomalies resulting in conditional-agenda setting model by Tsebelis and therefore points to the importance of the sequential structure of the decision procedures.