Connecting Europe with the World: Transaction Costs, Institutional Solutions, and Democratic Deficits

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    • Presentation speakers
      • Adrienne Héritier, Robert Schuman Centre for Advanced Studies, European University Institute, Florence
      • Yannis Karagiannis, Institut Barcelona d'Estudis Internacionals, Spain


    Over the past thirty years or so liberal institutionalism (LI) has become the dominant theoretical tool used to analyze the creation and maintenance of international regimes. According to LI’s functionalist logic, regimes respond to their members’ need to offer credible commitments to each other, and to economize on transaction costs. This paper aims at clarifying, testing, and critically re-examining that logic. In terms of clarifications, we do not dispute the transaction cost-economizing logic; yet we argue that a more convincing theory of international regimes must imperatively name the precise kinds of actors who seek to economize on transaction costs. In terms of empirical tests, we select cases on the basis of the variation of one independent variable at a time, and show that the European Union (EU) may indeed be systematically trying to economize on transaction costs. In terms of critical re-examination of that logic, we argue that what the EU gains from such economizing may come at the expense of its own national demoi.