Towards the Greater Good? EU Commissioners’ Nationality and Budget Allocation in the European Union

Abstract

We demonstrate that the nationalities of EU Commissioners influence budget allocation decisions in favor of their country of origin. Our focus is on the Commissioners for Agriculture, who are exclusive responsible for a specific fund that accounts for the largest share of the overall EU budget. On average, providing the Commissioner causes a one percentage point increase in a country’s share of the overall EU budget, which corresponds to 850 million Euros per year. The are no different pretreatment trends and the magnitude of the bias from selection-on-unobservables would have to be implausibly high to account for the estimated coefficient.

Keywords: Favoritism, Fiscal Federalism, Political Economy, Budget Allocation, European Union, EU Commission, EU Commissioners, National Origin

JEL Classification: D7, H3, H7, F5, F6