Economic National Preferences example essay topic

National preference formation is the first step in interpreting the outcome of an international negotiation. Andrew Moravcsik describes national preferences as, "an ordered and weighted set of values placed on future substantive outcomes that might result from international political interaction". (Moravcsik 24). The most significant question dealing with national preferences is determining the reasons why governments act and decide the way that they do in an international cooperative setting. What are the sources of underlying national preferences? Moravcsik's hypothesis divides the tendencies of national preference into two camps: geopolitical ideologies and political economic interests.

Even though these two theories are contrasting by nature, the resulting hypothetical outcomes of both are achieved by observing five identical observations concerning the pattern and process of state behavior. The first hypothesis Moravcsik provides emphasizes the role of geopolitical interests as the catalyst for the formation of national preferences. The basic nature of geopolitical reasons for national preferences focuses on underlying political and military goals. This should come as no surprise. European cooperation has been dictated time and time again by the fundamental desire of all nations to avoid another world war. The geopolitical theory does provide for economic cooperation, however the outcomes have an indirect effect on integration and are subordinate to politico-military goals.

The core argument of this segment of Moravcsik's theory is that states are more likely to integrate economically with other states because they share a common geopolitical goal or goals. Perhaps the most influential common political goal is the security against potential foes. Countries that share a common enemy are much more likely to integrate economically. The potential threat of the Soviet Union and the resulting Cold War is the perfect example of a common geopolitical interest shared by many western and central European countries, perhaps explaining the increased integration throughout the second half of the twentieth century. Upon the first glance, this theory may appear to be too broad.

Moravcsik divides this theory into four separate categories illustrating conceivable explanations of European integration resulting from geopolitical motivation. In order to justify his hypothesis, Moravcsik then takes positive examples from each of the four areas and uses it as evidence supporting his geopolitical theory. The four areas are a unilateral security arrangement against a common enemy, Europe as a worldwide superpower, the prevention of conflicts between European nations, and the willingness of political / social elites to accept integration. Moravcsik then takes favorable examples from each and bundles them together as he argues the importance of geopolitical ideology as a whole. "Evidence favoring any one counts as support for the role of geopolitics". (Moravcsik 33).

Moravcsik's geopolitical theory is well structured on the outside. Underlying politico-military goals shape national preferences, lead to policy decisions, and may or may not lead to economic integration. Finally, Moravcsik explains the five dimensions of national policy formation based on geopolitics. Preferences vary by country as a result of ideological commitment to federalism and / or a perceived military threat. The geopolitical hypothesis explains that preferences change as a direct result of major events, such as the end of the Cold War, which provide new information for the community. Bargaining concessions are usually made in the economic area, while countries most often fervently demand policy on geopolitical issues.

Domestic cleavages will arise only due to different assessments of geopolitical threats. Finally, countries will place priority on achieving geopolitical goals because efficient adaptation around a security issue is necessary. Moravcsik's other hypothesis explaining national preferences deals with the direct consequences of economic integration. "Theories of political economy explain international cooperation as an effort to arrange mutually beneficial policy coordination among countries whose domestic policies have an impact on one another". (Moravcsik 35).

This cooperation, therefore, allows governments to shape the pattern of economic policy and use the resulting externalities to their mutual advantage. This is not, however, a simple economic hypothesis. "The political economic explanation... focuses on the distributional as well as the efficiency consequences of policy coordination". (Moravcsik 36). According to Moravcsik, governments shape their national preferences through domestic economic interests and concerns. Trade policy coordination and exchange rate stability constitute the bulk of economic integration negotiations.

When countries discover that reciprocal policy action is mutually beneficial, or that competition is suffering, common economic integration is sure to follow in the necessary areas. Economic incentives and positive externalities are what shape policy. In the areas of trade and agriculture, preferences vary because of producer concerns. When the producer is competitive, they tend to favor liberalization. That is simple economics.

However when taking exchange rate stability into consideration, preferences vary from country to country. This is why it was impossible for the Snake to succeed. Countries tend to protect their economic policy autonomy in order to react to domestic inflation. Major bargaining demands are economic in nature and concessions are made in the geopolitical arena, simply because the result is mutually profitable. Economic interest groups become the key actors, along with economic officials, the social elite, and the ruling political party of course. The most significant cleavages arise in the areas of competitiveness.

Priority is given to achieving economic goals for economic reasons and it is this process, which leads to mutually beneficial policy negotiations. Moravcsik uses the negotiations for the Treaty of Rome as one test for his hypotheses. Five issues were decided upon and Moravcsik looks at German, French, and British preferences, as well as the eventual outcomes, in determining which of his two theories best explains the situation. As stated beforehand, the geopolitical argument looks for any positive evidence supporting any of the four variants to the argument.

Concern about the fate of Germany, the rising Soviet Union. "Events during the mid-1950's demonstrated that the only way to preserve great-power status and peace in Europe was to integrate". (Moravcsik 87). Most of the evidence however, supports Moravcsik's other hypothesis focused on political economic interests. He immediately provides numerical data regarding commercial issues and begins to de-emphasize geopolitics. He begins by illustrating the trade situation in Europe at the time on a country-by-country basis.

The United Kingdom was still trading heavily within colonial holdings and commonwealths, whereas, Germany and France had begun to focus more on trade within the "original six". Each held different positions within the European and global markets and their preferences were shaped accordingly. Furthermore, decisions were reached according to national preferences varying across specific issues, a method defined by the political economy hypothesis. The pattern by which policy was made does illustrate the national preferences of the key actors in the Treaty of Rome. The French case is the most blatant it would seem. Their position was not uniform and varied along economic issues.

The one policy that remained the most consistent throughout the negotiation process was the development of an export market for their agriculture sector. This is not tied to geopolitical motivations, but simply to better the fiscal situation of their farmers. The shaping of preferences within England and Germany was more economic then geopolitical as well. This is not to say that there were no geopolitical concerns, however during the post war, competition policy and maintaining their export markets were the most precedent goals. National preferences were a function of exports. Moravcsik also takes a look at the timing of the negotiations as evidence supporting his theory of political economy interests.

"The EC emerged after, not before, the resolution of major geopolitical issues". (Moravcsik 135). Economic national preferences did not sway during this time because of any safety concerns, and the maintenance of agricultural export markets was economic from the beginning. Despite the fact that Moravcsik tends to employ a broad view of geopolitical influences, thereby skewing his results, he is correct in his analysis that political economics shaped national preferences during negotiations over the Treaty of Rome.

When the major conclusions are a customs union and the CAP, it is easy to see how geopolitical interests were not as influential in shaping national preferences, as were political economic interests. There is no doubt, that the underlying goal of the Rome Treaty was a common market. There are clear examples within the treaty which serve to prove Moravcsik's hypothesis. Most of the negotiation process took place between Germany and France and both sides made concessions. It is Moravcsik's claim that when a country holds tightly to economic desires and makes concessions on geopolitical issues, political economic interests are what shape national preference. Germany consented to have the treaty ratified inside France.

In order to ensure their goal of a common market within the industrial sector, concessions like these had to be made. Moravcsik does recognize the significance of geopolitical forces and understands they exist, however, he claims that economic issues played a direct role in the integration process. I would have to agree with Moravcsik on this point. National interests were geared towards improving the economic stature of the nations involved. Great Britain wanted to maintain their open market because of their commonwealth connections. Germany needed to take advantage of their growing industrial sector.

Finally, France needed to stimulate agricultural growth. All three were major issues across borders and not limited to any one country. Furthermore, all had direct consequences on the negotiation process. Moravcsik himself stresses the importance of direct or indirect consequences of economic policy when determining the formation of national preferences. One possible alternative to Moravcsik's theory of integration could be the neo functionalist approach where the creation of small institutions would have a spill-over effect and thus promote further integration. However, even George and Bache discount this model.

While it may have been the driving force behind some of the later negotiations, the Treaty of Rome was without question designed under the liberal intergovernmental ist approach. "The initiative was taken therefore by the political and administrative elites in small states in pursuit of what they perceived as their national interests in being part of a larger economic grouping". (George & Bache 326). How nicely this correlates with Moravcsik's hypothesis and ultimate conclusion concerning national preference formation.

Moravcsik also uses the Maastricht Treaty to test his two hypotheses regarding national preference formation. Upon first glance, many jump to the conclusion that preferences were shaped by geopolitical concerns first and foremost. The timing of the negotiations took place after German unification; an event which changed the geopolitical structure of Europe without question. Many wondered how a unified Germany would act. However, Moravcsik rejects his geopolitical hypothesis, favoring an economic approach.

The evidence he uses to defend this argument is the fact that national preferences did not change before during, or after German unification. "In all three countries, timing, national negotiating tactics, and domestic discourse and cleavages are inconsistent with a pervasive concern about the geopolitical impact of unification". (Moravcsik 428). The major actors behind the negotiations included economic elites. All of the significant evidence presented by Moravcsik seems to defend his politico-economic theory. Inflation had become a major concern, especially within the United Kingdom.

While the United Kingdom may appear to be isolationist across the board and protective of their sovereignty (an ideology reminiscent of the Thatcher era), they were still forced to make concessions out of fear of exclusion from. Economically speaking, exclusion from the agreement would ultimately have a negative impact on industry and finance. Economic ideology had both a positive and negative effect on national preference formation while negotiating the Maastricht treaty. I cannot totally agree with the validity of Moravcsik's interpretation of the data. He does mention relevant geopolitical issues, however he gives them only secondary importance.

It is my opinion that economic and political issues held equal significance. Concern about a unified Germany and how it would act was a huge component to the negotiation process. Could they possibly turn their attention to the east and care less about obligations to west European countries. The united kingdom openly opposed unification and France did the same only discreetly. Also, the Soviet Union was slowly disintegrating and represented another change that had a serous geopolitical impact. National preferences cannot be explained solely by economic forces at this time.

Any hypothesis must include both economic and geopolitical explanations. Another possible theory which may serve to explain the negotiation process is that of multi-level governance. By this part of the twentieth century, the European public had multiplied its political mobility, the states were losing policy autonomy, and issues were connected across borders. Hooghe and Marks' theory serves to better explain the outcome of the treaty.

The creation of a supranational body to regulate the economies [ the ECB ] and the extension of QM are some examples proving this theory. Time and again, Moravcsik contradicts himself when interpreting national preference formation. It never seems to be solely geopolitical or economic issues, but a compilation of the two. Neither one argument fully explains national preferences. Moravcsik mentions this, but he tends to choose one over the other. This illustrates the overall weakness of his argument.

Of course, the process of theorizing European integration is subjective in nature, but Moravcsik takes it too far. He simply ignores the importance of major geopolitical events such as the unification of Germany. Each of the two events in which he tests his theory, result in the same conclusion: that economic issues shaped national preferences during the negotiation process. But in both cases he resigns to the fact that the two must be taken into consideration together.

Moravcsik's theory may be sufficient enough to explain the early processes of integration, but times are changing. More and more issues cross borders the public has become a major actor and states have lost quite a bit of policy autonomy. If I had to choose, Hooghe and Marks' theory of multi-level governance is the better method to employ when interpreting the motivations for European integration.