This chapter examines the transformation of the Convention's proposal on the Treaty Establishing a Constitution for Europe to the Lisbon Treaty in the aftermath of the two negative referendums from a principal-agent perspective. It shows that the common view of unitary member states, in which principals and agents share interests in the revision of treaties, can only partially—if not wrongly—explain the Treaty of Lisbon. The principal-agent analysis reveals that the political leaders delegated power to negotiating agents who worked out compromise solutions by partially revising the initial interests of their first order principals, the political leaders. Governmental agents from smaller countries were able to focus the negotiations on a few central reform issues, such as the number of Commissioners and the voting rules of the Council, and they also successfully influenced the final outcome of these issues. A major reason for their success was their credibility, which they could increase by pointing to integration-skeptic voters—particularly in countries that had announced a referendum. Hence, governmental agents increased their bargaining efficiency by referring to voters as their second-order principals.
On the Consistency of the First-Order-Approach to Principal-Agent Problems
