Neo-functionalists theories of the EC integration process have been initially developed by Ernst Haas and Leon Lindberg by the end of the 1950s. They are a revision of another theory, so called functionalist, first exposed by David Mitrany for the analysis of the League of Nations. Neo-functionalism is concerned to explain how and why nation-states cease to be wholly sovereign, and voluntarily mingles, merge and mix with their neighbours. The principal contribution of neo-functionalist theory is its identification of the functional categories likely to be receptive to integration and its description of the actual mechanics of overcoming national barriers within a particular functional category after the integration process has been launched (A.M. Burley, 1993, p. 54). According to these theories, the drivers of the integration process are supranational and subnational actors pursuing their own self-interests within a politically insulated sphere.

This document will try to evaluate the usefulness of these theories in explaining the gradual process that took the EC to become an integrated group of states working on the common aim of political unity. In order to fully answer the essay title my work will be divided in three sections: first, I’ll discuss the principles of neo-functionalism and of an alternative theory; then, I’ll describe the most significant historical examples which affirmed the correctness of neo-functionalists theories and expectations; finally, I’ll focus on the critics made to neo-functionalism and their validity. The conclusion will join together the principal points made in the essay and therefore give a personal opinion.

THEORIES

"Political integration is the process whereby political actors in several distinct national settings are persuaded to shift their loyalties, expectations and political activities toward a new centre, whose institutions possess or demand jurisdictions over the pre-existing national states" (E. Haas, 1968, p. 16).

Originally, Haas considered the European Community as a condition in which specific groups and individuals would show more loyalty to their central political institutions than to any other political authority (E. Haas, 1968, p. 5). At the national level, these groups may favour integration because they agree in their definition of interests on the basis of identical values (this is the case of identity of aspirations); to the same extent, they may agree on the end of a policy of integration on the basis of different values and interests (this is the case of convergence of interests); groups may oppose integration either for identical or convergent reasons. Fundamentally neo-functionalists treat regional integration as a process rather than a condition (end-state). In the beginning, relatively expansive tasks are assigned to supranational institutions, then national interest groups, political parties, and other political elites press for the strengthening and expansion of the functions, subsequently increasing the authority of these institutions and setting off a spillover effect (D. Cameron, 1992, p. 25). Political integration would result from a two-way process: during the initial stages nationalist’s forces in each of the participating countries are still supreme, then these forces (interest groups) may influence the decision to join in or to abstain from political integration’s steps. Once the new institutions originated by and associated with these steps are established, it is more likely that they will penetrate and influence values and ideologies of national groups, thus initiating a reverse process of integration. As a result a complex process of interaction between national ideologies and central (supranational) institutions will come about, and the eventual changes produced at the national level will constitute one of the indicators of the degree of integration, as the process continues.

Three related concepts lie at the very core of the dynamics of integration: functional spillover, political spillover, and upgrading of common interests. Functional spillover is based on the assumption that the different sectors of a modern industrial economy are highly interdependent and that any integrative action in one sector creates a situation in which the original goal can be assured only by taking further actions in related sectors, which in turn create a further condition and a need for more action, and so forth. Political spillover describes the process of adaptive behaviour, that is, the increment shifting of expectations, the changing of values, and the coalescing at the supranational level of national interest groups and political parties in response to sectoral integration. It is crucial to note that neo-functionalism does not postulate an automatically cumulative integrative process. Upgrading common interests is the third element in the neo-functionalist description of the dynamics of integration. It occurs when the member states experience significant difficulties in arriving at a common policy while acknowledging the necessity of reaching some common stand to safeguard other aspects of interdependence among them. One way of overcoming such deadlock is by swapping concessions in related fields. In practice, the upgrading of the parties’ common interests relies on the services of an institutionalised autonomous mediator. This induces participants to refrain from vetoing proposals and invites them to seek compromises, which in turn bolster the power base of the central institutions (A.M. Burley, 1993, p. 55).

In 1965, De Gaulle’s refusal to proceed with certain aspects of European integration (he deemed contrary to French interests), initiated the first major EC crisis and consequently opened a debate on the validity of neo-functionalists theories. It was claimed that they had exaggerated and politicised the notion of spillover, without giving the right importance to internal and external factors. Although neo-functionalists accepted most of the critics and reassessed their theories, Haas’s publication of the Obsolescence of Regional Integration Theory (in which he concluded that researchers should look beyond regional integration to focus on wider issues of international interdependence) raised doubts and hard critics about the reliability of those theories (A.M. Burley, 1993, p. 57).

On the other hand, the theory of Liberal Intergovernmentalism, presented by Moravcsik, points toward a conception of the EC more closely in line with contemporary theories of international political economy. Such theories suggest that the EC is best seen as an international regime for policy co-ordination, the substantive and institutional development of which may be explained through the sequential analysis of national preference formation and intergovernmentalism strategic interaction. At the core of liberal intergovernmentalism are three essential elements: the assumption of rational state behaviour (costs and benefits of economic interdependence are the primary determinants of national preferences), a liberal theory of national preference formation (governments evaluate alternative courses of action on the basis of a utility function), and an intergovernmentalist analysis of interstate negotiation (international conflict and co-operation can be modelled as a process that takes places in two successive stages: governments first define a set of interests, then bargain among themselves in an effort to realise those interests.) (A. Moravcsik, 1993, p. 481). Liberal theories of international relations focus on the effect of state-society relations in shaping national preferences. They assume that private individuals and voluntary associations with autonomous interests, interacting in a civil society, are the most fundamental in politics. State priorities and policies are determined by politicians at the head of the national government, who are embedded in domestic and transnational civil society, which decisively constrains their identities and purposes. The most fundamental influences on foreign policy are, therefore, the identity of important societal groups, the nature of their interests, and their relative influence on domestic policy. According to them, the primary interest of governments is to maintain themselves in office; in democratic societies, this requires the support of a coalition of domestic voters, parties, interest groups and bureaucracies, whose views are transmitted, directly or indirectly, through domestic institutions and practices of political representation. Through this process emerges the set of national interests or goals that states bring to international negotiation (A. Moravcsik, 1993, p. 483). The liberal intergovernmentalist view seeks to account for major decisions in the history of the EC by positing a two-stage approach. In the first stage, national preferences are primarily determined by the constraints and opportunities imposed by economic interdependence. In the second stage, the outcomes of intergovernmental negotiations are determined by the relative bargaining power of governments and the functional incentives for institutionalisation created by high transaction costs and the desire to control domestic agendas. This approach is grounded in fundamental concepts of international political economy, negotiation analysis, and regime theory (A. Moravcsik, 1993, p. 517).

Badly shaken by the Second World War, the process of integration in Western Europe started in a critical moment of its original member states. The Steal and Coal Community was originally an instrument to enable the Group of Six to take collective action without undermining their autonomy and individuality. Thereby the initial support of the United States was an important factor for the successful launching of the Community, both because it guaranteed support against any Soviet attempt to undermine the project and neutralised the British opposition (R. Price, 1987, p. 105). The international situation between 1958 and 1961 was marked by growing tension in Europe following Soviet threats to Berlin and lack of certainty in American policy. The Fouchet Plan, promoted by General de Gaulle (along with Chancellor Adenauer and Italy’s president Fanfani) constituted an important episode in the building of a European Union, by advancing the idea of political co-operation among the Six. In March 1958, De Gaulle on the occasion of a visit of Italian leaders to Paris, wanted to have a common French-German-Italian stance on Berlin; few months later, on the 31^st of May, during a press conference, he announced his intention of building Western Europe into a political, economic, cultural and human grouping organised for action and self-defence, with the expectation of perhaps one day growing into an imposing confederation. Unfortunately, after a long and difficult negotiation, the Fouchet Plan did not succeed, mainly due to the deep differences of view emerged between the Six over the aims and the methods of organising Europe. In fact, the smaller States were worried and annoyed by an eventual Paris-Bonn axis, thus suspecting De Gaulle of wanting to destroy NATO and therefore dominate the European integration process (R. Price, 1987, p. 117). It could be argued that De Gaulle’s Plan was very coherent: "A Europe of the States with no supra nationality in politics or economics."(R. Price, 1987, p. 125). But the opposed ideas of the ECSC members regarding Europe’s structure, direction, and dimension was probably the key point for the failure of political unity. Moreover, the unsuccess of the project for a Union of States implied a lack of political co-operation throughout the 1960s, and new possibilities to move forward the process of European political integration emerged only after De Gaulle’s departure.

The 1987 Single European Act committed the member States of the EC to the progressive establishment, by the end of 1992, of an internal market; thereafter the European Parliament had a greater role in amending and approving the Commission proposals. The 1989 meeting in Madrid appointed a committee chaired by Jacques Delors, to study and propose the necessary steps to European monetary and economic union (EMU). The final report concluded that EMU would imply fixed exchange rates between national currencies and a single currency, thus requiring a common monetary policy and compatibility of economic policies. Consequently, the Community needed new institutions to implement monetary policies, particularly a European system of Central Banks and a transfer of decision-making power from the member states to the community as a whole (D. Cameron, 1992, p. 27). At the 1991 Maastricht meeting, the European Council agreed to create both a European Central Bank and a single currency. The SEA and the commitment to achieve a single internal market by the end of 1992, followed by the commitment agreed upon at Maastricht in late 1991 to move to the third stage of economic and monetary union by January 1, 1999, at the latest, extended the responsibilities and powers of the supranational institutions of the EC, thus offering a clear validation of the neo-functionalist theories. According to them, this initiative represents an integrationist impulse that strengthens the supranational institutions and responsibilities of the Community. Conversely, neo-realists theories of international relations consider the Community as an instrument of national politics and interests (D. Cameron, 1992, p. 25).

The modern realist theory of international relations elaborated by Hans Morgenthau, among others, argues that the EC was not moving inexorably toward greater economic integration and political federation: States are the essential and most important actors in international politics, behave rationally and are motivated by their desire to maintain and enhance their power in relation to that of other states. According to neo-realism, a system of states is governed by certain principles which depends on their size, wealth, power, form, and so on. Therefore the EC itself is seen as a gathering of sovereign states, an international rather than a supranational organisation, hence authority will always be vested in the member states. The accumulation of power by supranational institutions only reflects the desire of the member states to cede or delegate authority to those institutions, because it best serves their national objective and interests, but if wished, they can recall or revoke that authority (D. Cameron, 1992, p. 28). The neo-realist image of European unintegrated confederation of sovereign states is mainly derived from the theory of state-centric notion of sovereignty, moreover it also reflects the legacy of certain political leaders, such as Charles De Gaulle and Margaret Thatcher, both of whom lost no opportunity to assert the primacy of the nation-state in supranational Europe. However, the possibility of a further enlargement and widening of the EU, following the collapse of communist regimes in Eastern Europe, may well prospect an increasingly complex array of intergovernmental relations, tensions, conflicts, and negotiations among a large number of participating member states, thus strengthening neo-realist’s theories.

The superiority of economic decisions over political choices was assumed as a permanent condition by neo-functionalists, therefore it was thought that the progression from a politically inspired common market to an economic union and finally to a political union (among states) would be automatic, but the point is that neo-functionalists advanced long-term predictions above the future of the EC without underlying more specific theories that identify the decisive determinants of politicians’ choices among competing alternatives. The expectation that Europe would develop in a federal direction, which led neo-functionalists to stress the uniqueness of its institutional structure, rather than analogies to other forms of interstate co-operation. The members’ states of Europe are unlikely to become the equivalent of the American states, and national Prime Ministers will not become the equivalent of American governors. National governments will be forced to share power with the European Parliament and the Commission, but they will continue to participate in the making of Community-wide decisions. Therefore, the political system which is going to be constructed will be an original one (A.M. Sbragia, 1992, p.290).

According to Haas, the neo-functional theory failed to give sufficient importance to four points:

• It neglected the importance of new aspirations and expectations that developed after the first experience;
• Nationalism was not empirically studied;
• It neglected the external environment in which the integration took place;
• It did not consider the transformation of the internal environment that occurred during the process of integration (E. Haas, 1968, p. xxiv).

In these terms, EC can be analysed as a successful intergovernmental regime designed to manage economic interdependence through negotiated policy co-ordination. State behaviour reflects the rational actions of governments constrained at home by domestic societal pressures and abroad by their strategic environment. Neo-functionalists were aware that they were dealing with a complex system of policy-making, the intricacies of which they describe with considerable accuracy. Their analysis of bargaining and negotiations, and of the manner in which issues are raised and dealt with by different networks of national and EC actors, remains opposite. An emphasis on ‘rules of the game’ and ‘norms of behaviour’ in policy-making is still relevant. The explanatory power of incremental spillover was called into question because of stagnation within the European Community and apparent limits to the willingness of governments to transfer an ever-widening range of policy responsibilities (B. Laffan, 1992, p. 10). However, as Haas pointed out, as the community moves from a mere custom union to an economic and then to a political union, more and more difficult choices become necessary, and the propensity for conflict increases (E. Haas, 1968, p. xxvi).

It has been argued in this essay that neo-functionalism highlighted the spillover effect as the main force of the process of EC integration. Nevertheless, as the historical facts showed, this was not always the case, therefore critics made during the 60s and 70s (and which led to the development of neo-realists theories), can be considered as effective. However, although neo-functionalism failed to predict the spillback effect (internal and external shocks), it seems to me that neo-realism does not give an explanation of the integration process bur rather it discussed the impossibility of political unity in Europe. In other words, neither neo-functionalism nor neo-realism fully explain the process by which EU came into being, and taken alone neither serves as a reliable guide to the EU of the future; but both (taken together) are useful for an understanding of the integration process.

In conclusion, it is my personal assumption (taking into account the initiatives of the last fifteen years) that the contributions given by neo-functionalists theories have been the most correct tools for the analysis of EC development.

E. Haas: The uniting of Europe. Political, Social and Economic Forces, 1950-1957, Stanford, 1968.

L.N. Lindberg: The Political dynamics of European Economic Integration, Stanford, 1963.

W. Wallace (ed): The Dynamics of European Integration, London, 1990.

R. Price: The Dynamics of European Union (A Study of Trans-European Policy Study Association), Croom Helm, New York, 1987.

B. Laffan: Integration and Co-operation, Routledge, London, 1992.

M. Newman: Democracy, Sovereignty, and the European Union, Hurst, London,1996.

A. Moravcsik: ‘Preferences and Power in the EC: A Liberal Intergovernmental Approach’ Journal of Common Market Studies, December, 1993.

A.M. Burley and W. Mattli: "Europe before the Court: a political theory of legal integration", International Organization, vol. 47, n° 1, 1993.

D. Cameron: "The 1992 Initiative: Causes and Consequences", in A.M. Sbragia (ed.) Euro-Politics: Institutions and Policymaking in the New European Community, Washington DC, Brookings, 1992.