“When Do Supranational Actors Intervene? The European Commission and the Rules Governing Finance”

Posner, Elliot. (2003) “When Do Supranational Actors Intervene? The European Commission and the Rules Governing Finance”. In: UNSPECIFIED, Nashville, TN. (Unpublished)

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Abstract

I investigate a 1994 European Commission intervention that led to the adoption of new rules governing the allocation of financial resources in Western Europe. These rules are embodied in stock markets, modeled on the U.S.-based NASDAQ Stock Market and designed to supply relatively inexpensive capital for young, entrepreneurial firms. I seek an explanation for a ten-year pattern in which commission officials, despite considering interventions throughout the 1980’s, only intervened in 1994. The empirical evidence shows that leading explanations from rational institutionalism, by emphasizing formal relations between the commission and member state governments, identify an important set of enabling and constraining conditions. They do not, however, capture the primary causal process responsible for variation in commission activism in financial services during this period. I argue the causes instead of lie primarily in the inner workings of the European commission-the internal structure of subdivisions with different subcultures, its interactions with a multidimensional external environment, and an ability, under the right conditions, to reshape the world in which it operates. The decision by commission officials to intervene and the time and effectiveness of the interventions depend on conditions largely to their making. While rational institutionalist approaches explain the autonomy of the supranational institutions in terms of delegated functions, formal rules and control regimes, I shift the focus onto the actor itself, its inner structure and workings, and its interpretations and creative manipulations of its social and political world.

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