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Key Drivers of EU Budget Allocation: Does Power Matter?

32 Pages Posted: 4 Dec 2015  

Vera Zaporozhets

University of Toulouse 1 - Toulouse School of Economics (TSE)

Maria Angeles Garcia-Valiñas

University of Oviedo

Sascha Kurz

University of Bayreuth

Date Written: September 17, 2015

Abstract

We examine the determinants of the EU budget expenditures allocation among different countries. In line with earlier literature, we consider two alternative explanations for the EU budget distribution: political power vs. needs view. Extending the original data set from Kauppi and Widgrén (2004), we analyze the robustness of their predictions when applying a different measure of power and more sophisticated econometric techniques. We conclude that the nucleolus is a good alternative to the Shapley-Shubik index in distributive situations such as the case of EU budget allocation. Our results also show that when explaining budget shares, the relative weight of political power based on the nucleolus is lower than the predictions of previous studies based on the Shapley-Shubik index.

Keywords: EU policies, budget allocation, political power, nucleolus, Shapley-Shubik index

JEL Classification: D72, D78, H61, O52

Suggested Citation

Zaporozhets, Vera and Garcia-Valiñas, Maria Angeles and Kurz, Sascha, Key Drivers of EU Budget Allocation: Does Power Matter? (September 17, 2015). Available at SSRN: https://ssrn.com/abstract=2698195

Vera Zaporozhets

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

Maria Angeles Garcia-Valiñas

University of Oviedo ( email )

Campus del Cristo
Oviedo, Asturias 33071
Spain
+34 985104878 (Phone)
+34985104871 (Fax)

Sascha Kurz (Contact Author)

University of Bayreuth ( email )

Universitätsstr. 30
Lehrstuhl für Wirtschaftsmathematik
Bayreuth, Bavaria D-95440
Germany
+49 921 55 7353 (Phone)
+49 921 55 7352 (Fax)

HOME PAGE: http://www.wm.uni-bayreuth.de/index.php?id=sascha

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