DP6778 Do Benevolent Aspects Have Room in Explaining EU Budget Receipts?

Author(s): Heikki Kauppi, Mika Widgrén
Publication Date: April 2008
Keyword(s): EU budget, European integration, voting power
JEL(s): C71, D70, D72
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=6778

This paper evaluates the determination of receipts from EU budget by considering a richer institutional structure than in earlier studies. We assume that the member states have self-interested objectives in CM trying to minimize their contributions within the given framework of the EU budget whereas EP is supposed to support benevolent objectives using its competence in non-compulsory expenditure, i.e. structural spending, internal and external policies and administration. CM exerts power in the allocation of both compulsory expenditure, mainly consisting of agricultural spending, and in non-compulsory expenditure. The purpose of this paper is not, however, to evaluate EP's influence but rather how the assumed benevolent objectives of EP and income differences turn into member states' budget receipts in a power politics based model.