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Multilevel Governance as a Global Governance Challenge: Assumptions, Methods, Shortcomings, and Future Directions  

Joachim K. Rennstich

Multilevel governance (MLG) as a research approach has mostly been applied to explain governance issues surrounding the European Union or international organizations. As a general research framework in the area of international relations (IR) theory, however, MLG has widely been underutilized, despite the many advantages that the approach offers in the empirical investigation of an increasingly complex international or global system. There are key concepts, assumptions, and definitions of MLG that focus separately on levels and governance as key elements of the approach and its interdisciplinary lineage. Some contested IR concepts include sovereignty, the nation-state, the international system, anarchy, agency, and levels of analysis. These IR concepts benefit from the application of an MLG framework by enabling the use of an interdisciplinary and multimethodological, yet systematically comprehensive, approach—which allows for nuanced use of these concepts. Other areas that benefit from IR methodologies applied in MLG research are methodological toolkits with a special focus on the areas of global governance, security studies, and international political economy.


NAFTA in a Comparative Perspective: A Debate on Trade Diplomacy, Economic Policy, and Regionalism  

Isidro Morales

“A Marriage of Convenience” became the best metaphor, coined in 1990 by distinguished American economist Sidney Weintraub to summarize the fundamentals under which NAFTA was built and understood, at least in mainstream analysis: the economic complementarities existing among the three countries of North America could work to the benefit of everyone involved if economic integration is well managed and geared toward the improvement of regional competitiveness. Thus, NAFTA became the privileged tool under which managed integration became implemented and assessed, at least in three major domains: as a foreign policy tool to advance the interests of each nation, as an economic device to reap the benefits of integration, and as the backbone under which a regional political and social bloc could eventually be constructed. Scholars, intellectuals, and public officials engaged in the discussions around NAFTA in each of those fields shared ideas, built some consensus, and split on dissents following competing approaches and/or national cleavages. The current literature in those three major fields of discussion is rich, voluminous, and highly inspiring, sometimes making references to other integrative experiences. This article reviews these debates and highlights either the consensus or dissention witnessed in each of the three domains under which NAFTA has been discussed the most. Since NAFTA cannot be separated from the political and social contexts that the debates and discussions took place in, a reference to those political contexts can be made when explaining and summarizing the debates. At a time when the mainstream consensus around NAFTA is being challenged by U.S. President Trump’s assumption that NAFTA is not about complementary economies but about economies competing against each other under a zero-sum game rationale, politics comes back to the forefront of North American affairs. The renegotiation of NAFTA will doubtless redefine the partnership among the three North American countries and the role that economic cooperation and integration entails for each.


Oil and the International Politics of the African State  

Cyril Obi

Recent discoveries of oil in some African countries have rekindled a debate about its place in development and international politics. The debate has pitched those viewing oil as a catalyst for development and a more assertive Africa in global politics against others who point to the negative impact of oil on older established African oil-producing states. Oil as a highly priced geopolitical and strategic commodity will for the foreseeable future shape relations between African petro-states and other global actors, particularly international oil companies and energy-dependent established and emerging global powers. The structural position of specific African petro-states in the global political economy and history, and the nature of their leadership, are defining factors in the diverse aspects of local and international politics, including the prospects for development and a more assertive Africa in international politics.


The Ownership Society in Comparative Perspective  

Andrew Kerner

The term ownership society is commonly used to describe a suite of policies promoted during the second George W. Bush administration that sought, among other things, to increase popular ownership of housing and financial assets. The ownership society was always in large part an attempt at social engineering. That attempt rests on two premises: first, that asset ownership pushes individuals’ politics to the right; and second, that governments can engineer a more right-leaning populace by promoting asset ownership. While the term was novel, the ideas were not. Bush’s ownership society bore more than a striking resemblance to Thatcher’s “enterprise society,” for example, and similar ideas percolated in some quarters of Latin American neoliberalism of the 1980s and 1990s. But foreign referents are in this case not necessary; the ownership society was in large part an expansion of a preexisting American tradition of promoting private ownership explicitly for its capacity to transform the owner’s politics. Despite its consistent appeal to right-of-center governments, political science has not come to any tidy conclusions about whether the ownership society exists or, if it does exist, how it works and how it interacts with financial and housing markets. Turmoil in those markets over the past 10 years, and the accompanying political fallout, underline the need to consolidate what we know about the ownership society and to set a course for theoretical and empirical development. Two themes in the literature are particularly noteworthy as it moves forward. First, there is a substantial contrast between “static” and “dynamic” theories of ownership society politics. Static theories argue that the fact of asset ownership per se affects the owner’s politics; dynamic theories look more toward movements in asset markets, arguing that asset ownership’s political effects vary according to the financial consequences of that ownership on the individual. While the latter appears to better fit the empirical evidence, the relevant scope conditions—when should we expect a dynamic theory to obtain, and where should we expect a static theory to obtain—remain unclear. Second, the empirical study of the ownership society is made difficult by the fact that asset ownership is virtually never randomly assigned, and the political antecedents of asset ownership are difficult to convincingly control for using observational data. In lieu of a perfect research design, better communication between observational and experimental studies can help move the literature forward.


Piracy and Maritime Security in Africa  

Jatin Dua

In a seemingly virtual era, maritime commerce and shipping retain a central role in contemporary global capitalism. Approximately 90% of global imports and exports currently travel by sea on around 93,000 merchant vessels, carrying almost 6 billion tons of cargo. Oceanic mobility and long-distance networks of trade are made possible and sustained by the life and labor of over 1.25 million seafarers currently working at sea as well as regimes of global security and governance. Yet, this oceanic world and its role in shaping politics, sociality, and regulation remains, for the most part, obscured and hidden out of sight in everyday life. As one of the oldest perils at sea, maritime piracy is not only a daily threat to seafaring and global shipping but makes visible this oceanic world and the larger networks of security and regulation that govern maritime commerce. In recent years, coastal Africa, specifically the waters off the coast of Somalia and the Gulf of Guinea, has seen an unprecedented rise in incidents of maritime piracy. The geopolitical and global trade importance of these areas has led to numerous national, regional, and international military and legal responses to combat this problem. While often seen as a seaborne symptom of failed states or criminality, maritime piracy has a more complex relationship with land- and sea-based governance. Occurring primarily in spaces that are politically fragmented but reasonably stable maritime piracy is better understood as a practice of extraction and claim making on mobility that emerges from deeper historical contexts and is linked to land-based economies and politics. Emphasizing maritime piracy in the Horn of Africa and the Gulf of Guinea within these wider historical and geographic contexts highlights the imbrication of the political and economic in shaping the emergence and transformations of this practice. This is not to deny the violence that constitutes maritime piracy, but to locate piracy within larger processes of mobility, governance, and political economy on the African continent and beyond. In addition to impacting local communities, seafarers, and global shipping, maritime piracy is key to apprehending challenges to global governance from the vantage point of the world’s oceans.


Political Budget Cycles  

Lasse Aaskoven and David Dreyer Lassen

The political budget cycle—how elections affect government fiscal policy—is one of the most studied subjects in political economy and political science. The key theoretical question is whether incumbent governments can time or structure public finances in ways that improve their chances of reelection; the key empirical question is whether this in fact happens. The incentives of incumbents to engage in such electioneering are governed by political institutions, observability of political choices, and their consequences, as well as voter knowledge, and both theoretical and empirical studies on political budget cycles have recently focused on conditions under which such cycles are likely to obtain. Much recent research focuses on subnational settings, allowing comparisons of governments in similar institutional environments, and a consensus on the presences of cycles in public finances—and in the reporting of public finances—is beginning to emerge.


The Political Economy of Aid Conditionality  

Desha Girod

Studies of Western development assistance conclude that aid is effective only when recipients have good governance, measured as pro-investment policies, democratic institutions, and political stability, or when recipients lack strategic importance to donors. Underlying the theoretical frameworks in these studies is a common mechanism: compliance with conditions on aid agreements, which, in turn, depends on recipient incentives to comply. With the exception of donors’ emphasis on the quality of governance in the early 2000s, donors generally overlook recipient incentives to comply with aid agreements and thus fail to capitalize on opportunities for aid effectiveness suggested by the academic studies. A paucity of data has limited direct analysis of compliance with conditions, but studies have relied on their own data collection or have leveraged data from the World Bank to assess determinants of compliance with conditions. Importantly, these studies of compliance support the findings from the aid-effectiveness literature, indicating that the initial incentives to comply with aid agreements are the driving force in agreement compliance and therefore aid effectiveness. Based on these findings, future research on compliance with conditions on aid is encouraged, beginning with study of the direct influence of compliance on economic development. In addition, future research should analyze whether certain types of aid influence compliance with Western aid agreements, including tied aid and aid from non-Western donors. The implication for policy is that donors should enthusiastically support recipients who face incentives to comply because compliance drives aid effectiveness. When recipients lack such incentives, donors should try to change the underlying incentive structure of recipients rather than adding conditions on aid.


The Political Economy of Development Finance in Latin America  

Leslie Elliott Armijo

Finance is frequently, but incorrectly, judged a technical matter best left to experts. Equally mistaken is the exasperated conclusion encapsulated in the phrase “people, not profits,” which holds that capitalism, private investors, and markets are simply evil. Finance is necessary for economic development, but also has profound, and often unexamined, implications for social and political spheres. Channels for financial intermediation may be public or private, and national or foreign, implying tradeoffs among organizational forms. Public banks typically are superior in providing public goods and implementing national strategic plans, but private banks and capital markets normally are more efficient, assuming competitive markets. Savings may be sought within the national economy or from abroad, with domestic savings implying a smaller pool yet less subsequent international vulnerability, and foreign inflows offering potential abundance at the cost of external dependence. This framing yields four ideal-types of long-term finance (LTF): national public finance from state development banks; national private finance from domestic private banks and capital markets; foreign public finance via bilateral or multilateral aid or state investment (including from non-traditional lenders, such as China); and foreign private finance sourced from global investors seeking returns. Both national public and foreign public finance dominated long-term investment in Latin America in the early postwar decades of import-substituting industrialization. In the 1970s through the 1990s, they were succeeded by foreign private bank loans, followed by crisis and retrenchment. In the 21st century global political and market conditions brought a resurgence of foreign capital, including from both global private investors and non-Western public sources. Worries about problems arising from Chinese public finance to Latin America are likely overblown, as the quantity remains small, except in some Bolivarian Alliance countries. However, private foreign inflows, strongly promoted by Western-led multilateral actors, from the Organisation for Economic Co-operation and Development (OECD) to the World Bank, during the 2010s, may be more problematic. Excessive dependence on private securities markets funded by globally mobile capital often undercuts achievement of other valued societal goals such as reducing inequality and ensuring democratic accountability. Notwithstanding their predictable flaws, it may be time for a reemphasis on national, and possibly regional, public development banks.


The Political Economy of Financial Markets  

Federico Maria Ferrara and Thomas Sattler

The relationship between politics and financial markets is central for many, if not most, political economy arguments. The existing literature focuses on the effect of domestic and international political interests, institutions, and policy decisions on returns and volatility in stock, bond, and foreign exchange markets. This research bears implications for three major debates in political science: the distributive effects of politics, globalization and state autonomy, and the political roots of economic credibility and its tensions with democratic accountability. While the study of politics and financial markets is complicated by several theoretical and empirical challenges, recent methodological innovations in political research provide a window of opportunity for the development of the field.


The Political Economy of Hegemony: The (Surprising) Persistence of American Hegemony  

Thomas Oatley

First-generation research in International Political Economy focused considerable attention on the relationship between hegemony and global economic stability. This focus was the result of a confluence of scholarly and policy concerns about the impact that the apparent decline of U.S. hegemony would have on international trade and investment regimes. Interest in this hegemonic stability hypothesis waned, however, as deeper explorations of the theoretical logic indicated that hegemony was not a necessary condition for international economic openness, and as the collapse of the Soviet Union and the consequent “unipolar moment” suggested that American hegemony was hardly in decline. Interest in hegemony resurfaced in the wake of the 2008 financial crisis. The crisis triggered many scholars to proclaim the end of the era of American global hegemony. Scholars argued that the U.S. government’s attachment to a large budget and trade deficits and the resulting growth of foreign debt were likely to weaken foreign confidence in the dollar and encourage the shift to an alternative reserve currency such as the Euro. At the same time, China’s rapid industrialization and emergence as a large creditor nation was creating a new pole in the international economy that constituted a meaningful alternative to a global economy organized around the United States’ economy. Thus, a shift toward a Beijing hegemony was all but inevitable. The predicted decline of American hegemony has yet to materialize. The U.S. economy remains the world’s largest, and the U.S. government continues to play the leading role in system making—creating new rules to govern international economic cooperation—and in privilege taking—manipulating these rules in ways that advantage U.S. public and private sector actors. Moreover, the U.S. government plays this role in all three economic subsystems: finance, knowledge, and production. Empirical scholarship conducted over the last decade encourages one to conclude by paraphrasing Mark Twain: Recent reports of the death of American hegemony are premature.


The Political Economy of Monetary Policy  

Cristina Bodea

The recent global economic crisis has renewed interest in the nature and history of monetary policy, the distributional effects of central bank policy, central bank governance, and the personalities at the helm of major central banks. In modern times, a country’s central bank formulates, or, to a minimum, implements, a country’s monetary policy, or the process of adjustment of a country’s money supply to achieve some combination of stable prices and sustainable economic growth. Monetary policy depends heavily on a country’s exchange rate system. Under fixed exchange rates, the country’s commitment to keep the level of the currency at a certain level dictates monetary policy to a great degree. As the gold standard was unraveling after World War I, many countries experienced high inflation or even hyperinflation. A similar situation faced monetary policy after the collapse of the Bretton Woods system of fixed exchange rates in the 1970s. By the 1980s, however, countries turned toward central bank independence as an institutional arrangement to control inflation. The current issues surrounding monetary policy have emerged from the historical increase in central bank independence and the 2007 economic and financial crisis. In particular, the opacity of central bank decisions, given their autonomy to pursue stable prices without political interference, has increased the demand for transparency and communication with the government, the public, and financial markets. Also, the 2007 crisis pushed central banks toward unconventional measures and macro-prudential regulation, and brought back into focus the monetary policy of the euro area.


The Political Economy of NAFTA/USMCA  

Gustavo A. Flores-Macías and Mariano Sánchez-Talanquer

When the North American Free Trade Agreement (NAFTA) came into force on January 1st, 1994, it created the largest free trade area in the world, and the one with the largest gaps in development between member countries. It has since served as a framework for trilateral commercial exchange and investment between Canada, Mexico, and the United States. NAFTA’s consequences have been mixed. On the positive side, the total value of trade in the region reached $1.1 trillion in 2016, more than three times the amount in 1994, and total foreign direct investment among member countries also grew significantly. However, the distribution of benefits has been very uneven, with exposure to international competition reducing economic opportunity and increasing insecurity for certain sectors in all three countries. Twenty-four years later, the three countries renegotiated the terms of NAFTA and renamed it the United States–Mexico–Canada Agreement (USMCA). The negotiation responded in part to the need to modernize the agreement, but mostly to President Donald Trump’s concerns about NAFTA’s effect on the U.S. economy and the fairness of its terms. Although the revised agreement incorporated rules that modernize certain aspects of the institutional framework, some new provisions also make trade and investment relations in North America more uncertain.


The Political Economy of the Developmental State in Latin America  

José Carlos Orihuela

The role of the state in economic development is broad, old, and metamorphic. Drawing on historical political economy and a critical reading of new institutional scholarship, our understanding of the developmental state is contextual and complex. Successful developmental state formation is the result of stable political-economic environments, cultural legacies of earlier state-making functioning as mental maps for new statecraft, coherent institutional and policy entrepreneurship, and sustained growth that gives positive feedback in state-making. Latin American state developmentalism has always been diverse, before and after the debt crisis. In the era of state-led industrialization, the Latin American developmental state “failed” because, with domestic and regional markets small and dependence on foreign markets and financial capital high, macroeconomic policymaking did not learn to deal with crises and cyclical external conditions. Developmental state success in the 21st century depends on undertaking less volatile political-economic pathways to facilitate organizational learning by doing. In exclusionary Latin America more than in other corners of the world, developmental state success also means reconciling economic and social goals.


The Politics of Domestic Taxation  

Lucy Barnes

All governments require revenue, and domestic taxes are the primary means for generating it. Yet both the size and shape of taxation vary significantly across countries and have been transformed over time. What explains variation in domestic taxation? To answer this question, recent scholarship on taxation has focused on the politics of taxation as a tool for redistribution. This has led to a wide body of research on the fiscal impact of taxation and on the introduction, evolution, and variation in direct and progressive tax regimes, particularly the income tax. Yet the focus on taxation as a redistributive tool yields a puzzle, as more progressive tax systems tend to be found where redistribution is in fact the lowest. Explanations of this paradox often center on the impossibility of high and progressive taxes on capital in the context of international economic integration. Not as well studied are taxes other than the taxation of income, and the deliberate politics of nonfiscal, regulatory, and incentive effects of different tax choices. Methodologically, problems of endogeneity are ubiquitous in the study of tax policy choices, but more sophisticated experimental work is well underway in research on individual preferences for taxation.


The Politics of Fires and Haze in Southern Southeast Asia  

Helena Varkkey

Transboundary haze pollution originating from fires in Southern Southeast Asia affects about half of the countries in Southeast Asia with varied intensities on an almost annual basis. Haze not only affects visibility but also causes widespread health problems, transportation disruptions, and other socioeconomic issues. This haze and the fires that cause it have been a key topic for environmental politics research in the region since the late 1990s. This has largely been driven by one overarching objective: how to prevent haze from returning in the following years. However, conditions on the ground (mostly in Indonesia and in the larger Southeast Asian region) have been changing and evolving drastically, which has resulted in a dynamic research agenda that has to keep up. Within the context of environmental politics, fires and haze can be viewed through the broad lens of national interest. There is a strong link between the severity of haze and the burgeoning agribusiness sector in the region: that of oil palm in particular. Oil palm is a very important crop in the region, with Indonesia and Malaysia generating almost 90% of total global palm oil output. Hence, national and business interest theories have often been used as a framework for research in this area, with commercial oil palm plantations often being the unit of analysis. However, this has been called to question lately as these plantations face increasing market pressure to act more sustainably. A new group of actors that have since been highlighted are smallholders, either independent or in contract with larger plantations. There is potentially much to be uncovered with regard to the relationships between smallholders and commercial plantations and how they affect patterns of fire use and global sustainability issues. Related to this is the ever-evolving collection of local, regional, and national policies (and related enforcement issues) on land and fire use in Indonesia. One key area of contention is the use of peatlands. Fires on peat produce the thick, sooty smoke that travels across national boundaries, and they are notoriously hard to put out. Political research in this area is heavily framed by a tough debate between the scientific community and socioeconomic concerns. While peatlands play an important role in the global climate change balance, they also face immense pressure for development fueled by the scarcity of land. The regional context has also been an important theme for haze research. Haze primarily affects the Southern Southeast Asian subregion, and the major players of the palm oil sector come from this area. The Indonesian palm oil sector is a vibrant combination of Malaysian, Singaporean, and local companies. And the Association of Southeast Asian Nations has been the hub of cooperation and mitigation activities over haze. Hence, many scholars have searched for answers at the regional level. However, new national developments, such as Singapore’s Transboundary Haze Pollution Act, suggest that countries may be losing confidence in regional efforts.


The Politics of International Trade  

Mary Anne Madeira

International trade and state efforts to liberalize or restrict trade generate very contentious politics. Trade creates winners and losers at the individual level, firm level, industry level, national level, and even regional level. It also generates conflict among transnational social groups, such as environmental advocacy organizations, human rights organizations, and transnational business alliances. Because of this complexity of the politics of international trade, scholars of international political economy (IPE) can focus on different levels of analysis and a variety of stages of the political decision-making process. Scholars agree that not only societal preferences but collective action problems, domestic institutions, and international factors all affect trade politics and policy outcomes. These aspects of trade politics together form the key influences on trade policy and whether it is liberal or protectionist in nature. Societal preferences constitute the initial inputs into the trade policy-making process. Understanding how different groups of economic actors within society win or lose from trade liberalization or protection is the first step toward understanding trade politics and trade policy outcomes. Once societal trade preferences are formed, they must be aggregated into cohesive pressure groups or grass-roots movements whose purpose is to influence trade policy. This is easier for some groups of actors to achieve than others. In lobbying government actors on policy, interest groups find that domestic institutions play an important role translating societal inputs into policy outputs. Policy-making institutions vary in the degree to which they are susceptible to special-interest lobbying versus the preferences of broader societal coalitions, and electoral rules and party structures also affect policy outcomes, with certain configurations creating a bias toward more protectionism or liberalization. In addition to these domestic-level influences on trade policy, IPE scholars have extensively studied the ways that international factors also affect trade policy outcomes such as the extent of liberalization and the content of what is liberalized (e.g., manufactures versus agricultural goods versus services). International factors such as the distribution of power, the character of international institutions and trade agreements (e.g., multilateral versus bilateral), transnational civil society and diffusion processes may be thought of as inputs into the policy-making process as well. Systemic conditions may constrain the types of policies that governments can adopt, or they may open the door to a range of possible policy outcomes that are nevertheless limited by the preferences of domestic societal actors.


The Politics of Trade and Climate Change  

Daniel Yuichi Kono

Both trade and climate change policies affect the international competitiveness of carbon-intensive industries. This suggests that policy changes in one area may affect politics in the other. Does openness to international trade affect climate change politics? Do climate change policies affect the politics of trade? Does formally linking trade and climate policies via trade sanctions affect the prospects for cooperation in each domain? There are good theoretical reasons to believe that the answer to these questions is yes. Theoretically, each set of policies should affect the other, but these interactions could either encourage or discourage trade and climate cooperation. How trade and climate politics interact is thus an empirical question. Empirically, the overall picture is of a nascent but promising field of research. Extant studies provide indirect tests and suggestive evidence, but little in the way of firm conclusions. Only one point emerges clearly: progress in this area will require more and better data on national climate policies.


Queer International Relations  

Melanie Richter-Montpetit and Cynthia Weber

Queer International Relations (IR) is not a new field. For more than 20 years, Queer IR scholarship has focused on how normativities and/or non-normativities associated with categories of sex, gender, and sexuality sustain and contest international formations of power in relation to institutions like heteronormativity, homonormativity, and cisnormativity as well as through queer logics of statecraft. Recently, Queer IR has gained unprecedented traction in IR, as IR scholars have come to recognize how Queer IR theory, methods, and research further IR’s core agenda of analyzing and informing the policies and politics around state and nation formation, war and peace, and international political economy. Specific Queer IR research contributions include work on sovereignty, intervention, security and securitization, torture, terrorism and counter-insurgency, militaries and militarism, human rights and LGBT activism, immigration, regional and international integration, global health, transphobia, homophobia, development and International Financial Institutions, financial crises, homocolonialism, settler colonialism and anti-Blackness, homocapitalism, political/cultural formations, norms diffusion, political protest, and time and temporalities


Regime Type and Foreign Direct Investment: A Transaction Cost Economics Approach to the Debate  

Austin P. Johnson and Quan Li

A debate exists in international political economy on the relationship between regime type and foreign direct investment (FDI). The central point of contention focuses on whether multinational firms generally prefer to pursue business ventures in more democratic or autocratic countries. A considerable amount of theory has been developed on this topic; however, the arguments in previous studies lack consistency, and researchers have produced mixed empirical findings. A fundamental weakness in this literature is that while FDI has largely been treated conceptually as a homogeneous aggregate, in reality, it features divergent characteristics on multiple dimensions. Three possible dimensions that FDI can be decomposed on are: greenfield vs. brownfield, ownership type (wholly owned vs. joint venture), and horizontal vs. vertical. The most relevant dimensions to the problem at hand are: greenfield vs. brownfield, and horizontal vs. vertical. Five propositions, based on the notion of asset specificity, other investment attributes, and host nation domestic factors, are derived to predict how regime type might affect four types of FDI: vertical-greenfield; vertical-brownfield; horizontal-greenfield; and horizontal-brownfield. Depending on the type of FDI, multinational corporations may have no regime preference, an autocratic preference, or a democratic preference. This research contributes to empirical international relations theory by providing a useful example on how to resolve a scholarly debate, theoretically, and by laying out testable propositions for future empirical research.


Regional Integration Theory  

Frank Schimmelfennig

Regional integration theory seeks to explain the establishment and development of regional international organizations. Key questions are why and under which conditions states decide to transfer political authority to regional organizations; how regional organizations expand their tasks, competencies, and members; and what impact they have on states and societies in their regions. Whereas regional integration theory started with a broad comparative regional and organizational scope in the 1950s and 1960s, it has since focused on European integration and the European Union. The main (families of) theories explaining the development of European integration—rather than decision making and policy making in the EU—are intergovernmentalism, neofunctionalism, and postfunctionalism. The key debates in regional integration theory have taken place between variants of intergovernmentalist and neofunctionalist integration theory. Intergovernmentalism assumes national governments to be the key actors in regional integration. Governments use regional integration to maximize their national security and economic interests in the context of regional interdependence. Integration outcomes result from intergovernmental bargaining and reflect the regional preference and power constellations. Governments delegate authority to regional organizations to secure their bargaining outcomes but remain in control of regional organizations and the integration process. By contrast, neofunctionalism disputes that governments are able to control the integration process. Transnational corporations and interest groups as well as supranational actors are empowered by the integration process and shape it in their own interest. In addition, integration creates a variety of “spillovers” and path-dependencies that push integration beyond the intergovernmental bargain. More recently, postfunctionalism has enriched and challenged the theoretical debate on regional integration. In contrast to neofunctionalism, postfunctionalism assumes a backlash mechanism of integration. As regional integration progresses and undermines national sovereignty and community, it creates economic and cultural losers who are mobilized by integration-skeptic parties. Identity-based and populist mass politicization constrains regional integration and may even cause disintegration. Regional integration theories have closely followed and adapted themselves to the development of European integration. They cover the establishment and progress of supranational policies and institutions but also the recent crisis of the EU. An exemplary review of their explanations of major development in European integration shows that they are more complementary than competing.