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The Élysée Treaty and European Integration Theory

Yannis Karagiannis

Keywords: ÉLYSÉE TREATY; LIBERAL INSTITUTIONALISM; COASE THEOREM; INCOMPLETE; CONTRACTS; INTERNATIONAL ORGANIZATIONS

According to neoliberal institutionalism, states create international institutions to limit information asymmetries, monitor compliance, and ensure the credibility of commitments to agreed-upon policies-in short, to minimize transaction costs. Although this view can help explain the delegation of powers to supranational bodies such as the European Commission, it cannot account for the signature of the Élysée Treaty between France and Germany in January 1963, which reversed the logic of supranational delegation. Understanding the causes and the consequences of this apparently anomalous event is therefore a major challenge facing scholars of international organizations, European integration, and German foreign policy alike. To start addressing the issue, this article develops an explanation based on incomplete contracts theory. In a nutshell, I argue that the Élysée Treaty aimed at securing the equal treatment of French and German interests in the process of European integration, thereby allowing the deepening of European integration.

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