Introduction

This chapter introduces the main puzzle and argument of the book, and describes the research approach. It shows that authority-enhancing institutional change is frequent in regional organizations, yet existing theories expect international institutions to be fairly stable due to high institutional barriers to change and concerns about the sovereignty costs of independent international institutions. It is argued that one important driver of institutional creation and change is diffusion from the European Union, both as an active supporter of regional institution building and as a successful model of regional cooperation. This argument is tested through a mixed-methods design that includes large-N statistical analysis and several single and comparative case studies. The chapter also summarizes the main implications of the argument for theories of regional organization and for debates about international institutional design and diffusion.

Passive European Union Influence

This chapter traces the European Union’s passive influence in the establishment of the Mercosur Permanent Review Tribunal in 2004. This is an useful case to study passive EU influence because the Tribunal’s establishment constitutes an unlikely case from the perspective of existing explanations of dispute settlement design and it is representative of a statistical association presented in Chapter 4. Through a detailed process tracing exercise that reconstructs the institutional preferences and strategies of national governments and the process of international bargaining on the basis of primary documents, interviews with policy-makers and secondary sources, it shows how the European Union, through its passive influence on the institutional preferences of Uruguay, the bloc’s smallest member state, shaped the design of the Tribunal. In the absence of passive EU influence, the chapter concludes, the Tribunal would have been less institutionalized.

European Union Diffusion and Other Regional Organizations

This chapter summarizes the book’s main arguments and explicates its theoretical implications for theories of regional organization and debates about international institutional design and diffusion. It reviews the evidence to support the claim that the EU systematically shapes processes of institution building in other regional organizations both actively and passively, and that this influence is bounded by the contractual nature of regional organizations. An important implication of the argument advanced in this book is that existing theories of regional organization are seriously incomplete due to their inattention to processes of diffusion and, in particular, the role of prominent organizational pioneers.

Explaining the European Union’s Interorganizational Influence on Other Regional Organizations

This chapter examines the European Union’s influence on other regional organizations through a statistical analysis of a dataset that contains information on the institutionalization of 36 regional organizations from 1950, or the year of their establishment, until 2017. The analysis shows that both the intensity of a regional organization’s engagement with the EU (active influence) and the EU’s own institutional trajectory (passive influence) are correlated with the level of institutionalization in other regional organizations. Second, these effects are strongest in regional organizations that are based on contracts containing open-ended commitments. Together, these findings suggest that the creation and subsequent institutional evolution of the EU has made a difference to the evolution of institutions in other regional organizations. Counterfactually, member states would have built less institutionalized regional organizations in the absence of the EU.

Revisiting Regional Institution Building

This chapter revisits the theoretical literature on regional institution building during the last 70 years and contrasts it with the empirical literature on regional organizations. It shows that while the latter is replete with references to the European Community/European Union as a causal influence on regional institution building, the former has largely neglected this influence because it pitches its explanations at alternative levels of analysis. It is argued that most existing explanations of regional organization focus on the systemic or unit level of analysis, while the causal influence of the European Union operates at the inter-unit level. The chapter lays out the three levels of analysis in the study of regional institution building. and concludes that the literature on diffusion provides useful analytic tools to study processes of interorganizational influence in international relations.

The Scope of European Union Influence

This chapter examines the scope of European Union influence by combining quantitative and qualitative evidence. It argues that active and passive EU influence are likely to be discernible specifically in those regional organizations that rest on open-ended contracts because these require more frequent institutional change, multiplying opportunities for EU influence, and they allow local actors to construct similarities with the EU, thereby rendering claims for EU-type institutional more likely and more credible. The chapter probes these arguments, first, with quantitative evidence, showing descriptive associations between contractual open-endedness and both the frequency of institutional change and active EU engagement. It presents, second, a paired comparison of the establishment of a parliamentary institution in the Association of Southeast Asian Nations and its non-establishment in the North American Free Trade Agreement, to show how the contractually open-ended nature of cooperation in the former facilitated EU influence while the fixed nature of the contract in the latter hampered it.

Theorizing Interorganizational Influence from the European Union

This chapter theorizes interorganizational influence from the European Union to other regional organizations by drawing on the diffusion literature. The framework rests on the premise that diffusion shapes institution building in regional organizations through its influence on the institutional preferences and bargaining strategies of national governments who negotiate institutional change. The chapter hypothesizes that regional institution building reflects variation in the EU’s active engagement with other regional organizations and its own institutional development, and is most likely to be relevant in those regional organizations that rest on open-ended contracts. The chapter closes with a discussion of alternative explanations of regional institution building.

Active European Union Influence

This chapter traces the European Union’s active influence on the establishment of the Tribunal of the Southern African Development Community in 2005—a carbon copy of the European Court of Justice. The Tribunal’s creation is an inferentially powerful case to study active EU influence because it constitutes a least likely case from the perspective of existing explanations of dispute settlement design. Through a detailed process tracing exercise that reconstructs the collective preferences and institutional strategies of national governments and the process of international bargaining, it shows how the European Union, through its threat to withdraw funding from SADC, induced the creation of the SADC Tribunal. In the absence of EU influence, the chapter concludes, the Tribunal would not have been established; active EU influence made a counterfactual difference to SADC’s institutionalization.