| Publication |
2012.
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| Summary/Abstract |
This article explains the establishment of the European Union's Security and Defense Policy (esdp) in 1998-99 and its institutional design. I argue that both the soft balancing explanation and the "second wave" of approaches fall short. In contrast, the article shows that liberal-institutionalist thought and transaction costs economics offer a heuristically promising perspective. Most crucially, the pivotal concept of asset specificity provides explanatory leverage. The combination of risks of opportunism and the non-specificity of esdp's ultimate assets explains why and how the major European powers designed the eu's security and defense pillar in 1998-99. Empirically, I trace how the United Kingdom and France were gradually confronted with not fully credible commitments within nato for crisis management in Europe. Based primarily on the signals sent by us domestic politics, they were increasingly concerned about isolationism and questioned the American commitment to European security. Therefore, they were searching for another institutional option for providing security on a long-term basis. Although this assessment of ex post transaction costs triggered the initial establishment of esdp, ex ante transaction costs were responsible for its more specific design. Given the indirect American threat of disengagement when faced with Europe's aspirations for autonomy, esdp had to be designed in a compatible way with nato. Non-specific, and thus redeployable, military assets represented the institutional solution to the conflict between European autonomy and NATO's primacy. In other words, asset specificity as the key analytical concept of transaction costs economics is what differentiates this argument from previous accounts and provides a more comprehensive framework for understanding both the establishment and design of esdp in 1998-99.
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