Bureaucrats versus Politicians ? Estimating a Model of Legislative Bargaining in the European Union

Critics frequently claim that the European Commission has an undue influence on EU legislation vis-à-vis the Council and the European Parliament. We evaluate this claim by proposing and structurally estimating a dynamic model of the legislative process of the European Union. The estimated model shows that the most powerful forces shaping policy are the veto rights of the Council and the Parliament, while the Commission has a limited impact on the final shape of a proposal under consideration. Furthermore, the Council is located closer to the status quo than the Parliament, enabling the Council to use its veto to achieve favourable outcomes. The dominant role of veto rights implies that changes to features of the legislative protocol other than veto rights would leave policy outcomes effectively unchanged. We confirm this through a number of counterfactual simulations. Removing the vetoes of the Council and the Commission, on the other hand, would lead to a substantial shift in policy and increase the bargaining power of the European Parliament.