Mark Mink

Jakob De Haan

Are there Political Budget Cycles in the Euro Area?

This article examines whether there is a political budget cycle (PBC) in countries in the euro area. Using a multivariate model for 1999-2004 and various election indicators we find strong evidence that, since the start of the Stability and Growth Pact, fiscal policy-makers in the euro area have pursued expansionary policies before elections. In an election year -but not in the year prior to the election -the budget deficit increases. This result is in line with thirdgeneration PBC models, which are based on moral hazard. We also find a significant but small partisan effect on fiscal policy outcomes.

It is often thought that incumbents try to use expansionary fiscal policy before elections to increase their popularity. However, most empirical studies examining the existence of a political budget cycle (PBC) 1 in industrial countries find little support for such election-driven fiscal policy manipulations. 2 Some of these studies examine whether a PBC exists in member countries of the European Union (EU). For example, [START_REF] Andrikopoulos | Fiscal Policy and Political Business Cycles in the EU[END_REF] investigate whether incumbent governments manipulated fiscal policy in order to enhance their re-election prospects. Their empirical evidence for the 1970-98 period does not support this hypothesis. De [START_REF] Haan | Political and Institutional Determinants of Fiscal Policy in the European Community[END_REF], who examine fiscal policy in the European Community during the 1980s, also find no support for PBCs. However, other studies focusing on the 'old' member countries of the EU claim that in more recent years fiscal policy has often turned expansionary before elections. For instance, [START_REF] Buti | Discretionary Fiscal Policy and Elections: The Experience of the Early Years of EMU[END_REF] report electoral effects based on an examination of the discretionary part of fiscal policy over the 1999-2002 period. Also Von [START_REF] Hagen | Fiscal Discipline and Growth in Euroland. Experiences with the Stability and Growth Pact[END_REF] concludes that there is evidence for a PBC in EU member countries. For the period 1998-2002 he finds that the (unweighted) average fiscal impulse in pre-election years was significantly higher than the average fiscal impulse in all other country-year cases. 3 The results of these last two papers are somewhat surprising since member countries of the EU are restricted in their fiscal policies by the Stability and Growth Pact (SGP). The SGP consists of two Council Regulations: one on the strengthening of the surveillance and coordination of budgetary positions, and the other on speeding up and clarifying the implementation of the excessive deficit procedure. A corresponding European Council Resolution ties them together. Regulation 1466/97 sets out to strengthen multilateral surveillance and gives member states a goal of a medium-term budgetary position of close to balance or in surplus. Regulation 1467/97 clarifies and accelerates the excessive deficit procedure as specified in the Maastricht Treaty so that -in principle -within 10 months non-interestbearing deposits and ultimately fines can be imposed if the member state concerned takes no effective actions to redress so-called excessive deficits (measured against reference values of 3% of GDP for the general government budget deficit and 60% for the general government debt-to-GDP ratio). 4 According to Buti and Van den Noord (2003: 4), the SGP 'is unquestionably the most stringent supranational "commitment technology" ever adopted by sovereign governments on a voluntary basis in the attempt to establish and maintain sound public finances. The SGP, if applied according to its letter and spirit, will have important implications for the behaviour of budgetary authorities in both the short term (cyclical stabilization, policy co-ordination) and long term (sustainability of public finances).' This paper examines whether there really exists a PBC in EU member countries in the euro area. We focus on EU members that have adopted the euro because the rules of the SGP are less strict for member countries that are not part of the currency union. In contrast to [START_REF] Buti | Discretionary Fiscal Policy and Elections: The Experience of the Early Years of EMU[END_REF] and Von [START_REF] Hagen | Fiscal Discipline and Growth in Euroland. Experiences with the Stability and Growth Pact[END_REF], we use a multivariate model. Furthermore, instead of employing election dummies -like most previous PBC studies -we use an election variable suggested by [START_REF] Franzese | Electoral and Partisan Manipulation of Public Debt in Developed Democracies, 1956-1990[END_REF] that takes the timing of an election in the course of a year into account. On the basis of data for the period 1999-2004, we find strong evidence that the SGP has not restricted fiscal policy-makers in the euro area in pursuing expansionary policies before elections. In an election year -but not in the year prior to the election -the budget deficit increases. This result is in line with third-generation PBC models, which are based on moral hazard. We also find that the political composition of the government has a significant (but small) influence on net lending.

The remainder of the paper is organized as follows. After offering some theoretical considerations and reviewing previous empirical studies, we outline the empirical model. The fourth section contains the main results and the fifth section presents the outcomes of various sensitivity tests. The final section offers some concluding comments.

Theoretical considerations and previous empirical studies

Three generations of theoretical PBC models can be distinguished. 5 The firstgeneration models emphasize the incumbent government's intention to secure re-election by maximizing its expected vote share at the next election [START_REF] Nordhaus | The Political Business Cycle[END_REF]. It is assumed that the electorate is backward looking and evaluates the government on the basis of its past track record. As a result, these models imply that governments, regardless of ideological orientation, adopt expansionary fiscal policies in the late year(s) of their term in office in order to stimulate the economy.

The second-generation models - [START_REF] Shi | Political Budget Cycles: A Review of Recent Developments[END_REF] call them adverse-selection-type models -emphasize the role of temporary information asymmetries regarding the politicians' competence level in explaining electoral cycles in fiscal policy. In these models, signalling is the driving force behind the PBC. The first of these models is due to [START_REF] Rogoff | Elections and Macroeconomic Policy Cycles[END_REF], who assume that each political candidate has a competence level (high or low) that is known only to the politician and not to the electorate. Voters want to elect the more competent politician and form rational expectations regarding the incumbent's type based on observable current fiscal policy outcomes. Before the election, high-type incumbents will attempt to signal their type (and thereby increase their chances of re-election) by engaging in expansionary fiscal policy, which is less 'costly' for them than it is for lowtype incumbents. This leads to a pre-election increase in the government deficit when competent politicians are in office. [START_REF] Rogoff | Equilibrium Political Budget Cycles[END_REF] argues that incumbents can also signal their competence before an election by shifting government expenditure towards easily observed consumption spending and away from investment. As pointed out by [START_REF] Shi | Political Budget Cycles: A Review of Recent Developments[END_REF], some of the implications of the signalling models seem to be at odds with both empirical and anecdotal evidence. For example, only more competent politicians (rather than less competent ones) distort the economy in the separating equilibrium of the signalling game. Likewise, only competent politicians will be re-elected. Furthermore, since only competent types signal by creating a boom before an election, the testable implications are unclear without additional information on the (unobservable) type of the incumbent.

These drawbacks do not apply to the third-generation PBC models, which are based on moral hazard. Examples of such studies are [START_REF] Persson | Political Economics: Explaining Economic Policy[END_REF] and [START_REF] Shi | Conditional Political Budget Cycles[END_REF]. As in the adverse-selection models, each politician has some competence level that is unknown to the electorate. Additionally, it is assumed that politicians cannot observe their competence level ex ante either. That is, politicians are uncertain about how well they will be able to handle future problems. Voters are rational and therefore want to elect the most competent politicians because that would imply higher levels of post-election public goods production. The constituents' inference is based on the observable macroeconomic performance of the incumbent government.

The key assumption is that the incumbent government can exert a hidden effort, that is, use a policy instrument unobservable to the public that is a substitute for competence. For example, if competence measures how well politicians can convert revenues into public goods, the hidden effort can be interpreted as the government's short-term excess borrowing. Elections take place after the incumbent government's hidden effort and competence have jointly determined the observable macroeconomic outcome. The incumbent government would like to increase its performance index by exerting more effort (borrowing more), hoping that voters will attribute the boost in public goods provision to its competence. In the equilibrium of this moral hazard game, there will be an excessive effort on the part of the incumbent politicians, and, as a result, there is an increase in the budget deficit prior to an election. In these models, all types of incumbent government will incur excessive preelection budget deficits (independent of their competence level). As [START_REF] Shi | Political Budget Cycles: A Review of Recent Developments[END_REF] point out, one can test these empirical predictions whether or not the type of the incumbent government is observable. Furthermore, the implications of this model can be tested for all democratic countries, irrespective of their political structure (e.g. the existence of partisan differences). [START_REF] Brender | Where Does the Political Business Cycle Really Come From?[END_REF] argue that until recently a PBC was generally thought to be a phenomenon of less developed economies. For instance, [START_REF] Schuknecht | Political Business Cycles in Developing Countries[END_REF] reports evidence for a PBC in his sample of 35 developing countries over the period 1970-92 and[START_REF] Block | Political Business Cycles, Democratization, and Economic Reform: The Case of Africa[END_REF] finds for a cross-section of 44 sub-Saharan African countries that the government fiscal deficit increases by 1.2 percentage points in election years. Likewise, [START_REF] Schuknecht | Fiscal Policy Cycles and Public Expenditures in Developing Countries[END_REF] finds for a sample of 24 developing countries for the 1973-92 period that incumbent governments tend to increase public investment prior to elections. [START_REF] Hallerberg | Political Business Cycles in EU Accession Countries[END_REF] consider whether political business cycles existed in East European accession countries during the period 1990-9. They find that governments of accession countries with a fixed exchange rate regime manipulate their economy in election years through running larger budgets.

However, some recent studies present evidence for the existence of a PBC in a large cross-section of both developed and developing countries. For instance, [START_REF] Shi | Conditional Political Budget Cycles[END_REF] show that significant pre-electoral increases in the government budget deficit exist for their panel of 91 developing and developed countries over the period 1975-95. Moreover, [START_REF] Persson | Do Electoral Cycles Differ across Political Systems?[END_REF] report statistically significant tax decreases before elections in a sample of 60 democracies over the period 1960-98. [START_REF] Brender | Where Does the Political Business Cycle Really Come From?[END_REF] suggest, however, that the results of these studies are driven by the experience of so-called 'new democracies', where fiscal manipulation may be effective because of a lack of experience with electoral politics in these countries. They argue that, once the 'new democracies' are removed from the sample, the PBC disappears. Nonetheless, some recent studies focusing on 'established democracies' find evidence for the existence of a PBC. For instance, [START_REF] Alt | Transparency, Political Polarization, and Political Budget Cycles in OECD Countries[END_REF] argue that among advanced democracies significant opportunistic electoral cycles are conditional on the transparency of budget institutions. In countries with less transparent institutions the electoral cycle in fiscal policy appears, whereas no such election-related fiscal policy movements show up in higher-transparency countries. However, [START_REF] Tujula | What Determines Fiscal Balances? An Empirical Investigation in Determinants of Changes in OECD Budget Balances[END_REF] find support for a PBC independently of fiscal institutions in their sample of OECD countries for the period 1970-2002. Likewise, [START_REF] Buti | Discretionary Fiscal Policy and Elections: The Experience of the Early Years of EMU[END_REF] and Von [START_REF] Hagen | Fiscal Discipline and Growth in Euroland. Experiences with the Stability and Growth Pact[END_REF] claim that fiscal policy in EU member countries turns expansionary before elections despite the introduction of the SGP. In the following sections we will examine whether there are indeed political budget cycles in the euro area.

Empirical model and data

In the PBC literature, several indicators of fiscal policy have been suggested. The three measures most often used are net lending, cyclically adjusted net lending, and the primary budget balance. As part of the sensitivity analysis presented below we have employed all these measures, but in reporting our main findings we primarily focus on net lending. The cyclically adjusted budget balance suffers from the fact that there is no consensus on how it should be computed; figures provided by various international organizations often show large differences. Furthermore, De [START_REF] De Haan | Why Did the Stability and Growth Pact Fail?[END_REF] demonstrate that OECD figures on cyclically adjusted balances are subject to large revisions for a rather long time after their initial publication. Because we are focusing on a very recent time period, we therefore prefer to use unadjusted figures. The primary balance has the advantage that it excludes interest payments, which are not controlled by the government. However, although interest payments are more or less exogenous, policy-makers can cut other expenditures if interest payments rise; a reluctance to do so during an election year should certainly be considered relevant from a PBC perspective.

Some indicative evidence for the existence of a PBC in the euro area is shown in Table 1, which presents an overview of the budget balances for all countries in the currency union for the period 1999-2004. Figures for the 20 election years are in bold. It immediately becomes clear that all countries, with the exception of Portugal, had on average lower budget balances during election years than during years without a parliamentary election. The (unweighted) average budget balance for all election years in the sample equals -1.4%, whereas for election years it is -0.5%. The t-statistic for the difference between the two values is 1.42, which is significant at the 10% level. However, in order to draw more compelling conclusions regarding PBCs in the euro area, a model is required that takes into account other potentially relevant determinants of the budget balance.

Apart from electoral influences, our empirical model accounts for two factors that are not directly controlled by policy-makers but that affect fiscal policy outcomes. First, to filter automatic stabilization effects from our fiscal policy measure, we include the output gap as a proxy for the business cycle. An economic upswing will lead to an increase in the budget balance, whereas in the downward phase of the business cycle the balance usually deteriorates. Because there is no consensus in the literature on how to construct the output gap, we use output gaps based on potential GDP as well as on trend GDP, both calculated by the European Commission.

Second, since unforeseen economic developments may affect fiscal policy outcomes, we include the difference between actual and expected real GDP growth. The expected growth rates are the GDP growth forecasts available at the time the government budget was decided upon. A higher than expected growth rate will lead to an increase in the budget balance owing to, amongst other things, unexpected increases in tax receipts. Likewise, unexpected inflation may have an effect on the budget balance. As pointed out by [START_REF] Tujula | What Determines Fiscal Balances? An Empirical Investigation in Determinants of Changes in OECD Budget Balances[END_REF], inflation may affect government receipts and expenditures through nominal progression in tax rates and tax brackets, and via price indexation of receipts and expenditures. On the other hand, unexpected inflation erodes the real value of nominal government debt so that the overall effect of inflation on the budget balance is not clear a priori.

After accounting for the effects of business cycle fluctuations and forecasting errors in GDP growth and inflation, all remaining changes in the budget balance are considered to be the result of discretionary fiscal policy. These considerations suggest estimating the following equation:

, ( 1
)
where ∆BB it is the change in country is overall budget balance as measured by the change in net lending; y it -y it f stands for the difference between actual real GDP growth at time t and real growth as forecast at the time fiscal policy for year t was determined; π it -π it f represents the difference between actual inflation at time t and inflation as forecast at the time fiscal policy for year t was determined; ∆GAP it measures the change in the output gap in year t as a percentage of GDP. In order to take account of potential election effects, two alternative indicators are considered. The first involves adding a dummy to the equation that indicates whether a year is an election year or not (D Election year ). A similar dummy is used to account for pre-election years. Because fiscal policy decisions may take some time to have an effect, election-induced fiscal measures could be taken in the year prior to the actual election.

∆ ∆ BB y y GAP it it it it it it = + - - + β β β β 0 1 2 3 f f ( ) + ( ) π π ( ( )+ ) β ε 4 ( + Election
The second indicator takes the timing of an election in the course of the year into account. It has been developed by [START_REF] Franzese | Electoral and Partisan Manipulation of Public Debt in Developed Democracies, 1956-1990[END_REF] and is calculated as:

ELE = [(M -1) + d/D]/12, ( 2
)
where M is the month of the election, d is the day of the election and D is the number of days in that month. For the year prior to the election year, the indicator is calculated as:

ELE = [12 -(M -1) -d/D]/12. ( 3
)
In all other years its value is set to zero. For reasons that will become clear later, we want to be able to interpret the values of the election indicator in terms of actual election dates. This means that an indicator value of, for instance, 7/12 in an election year as well as a value of 5/12 in a pre-election year implies that elections take place at the end of July. In general, this requires that snap elections are ignored because the length of the period during which election-driven policy manipulations can occur -that is, the period between a government crisis and the early election -does not say anything at all about the actual election date because it usually does not amount to exactly 365 days. As a result of these considerations, 19 observations for election years and 12 observations for pre-election years can be used in calculating the election indicator.

The macroeconomic data necessary to estimate the model have been obtained from stability programmes of the EU countries and official publications of the European Commission. Data on general election dates are mainly taken from political data yearbooks [START_REF] Katz | Political Data Yearbook 1999[END_REF], 2000[START_REF] Drazen | The Political Business Cycle after 25 Years[END_REF], 2002[START_REF] Brender | The Effect of Fiscal Performance on Local Government Election Results in Israel: 1989-1998[END_REF][START_REF] Van Biezen | Political Data Yearbook 2004[END_REF]. The sample contains observations for all 12 countries in the euro area -Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain -over the time period 1999-2004. The appendix, which can be found on the EUP webpage, contains a detailed overview of the data sources used.

Results

Columns I and II of Table 2 present benchmark regressions that contain only the economic control variables. The difference between the regressions is the output gap variable used; in column I this variable is constructed on the basis of potential output, whereas in column II it is calculated on the basis of trend income. It follows that only the coefficients for the output gap measures are significantly different from zero. For each regressor, including the constant, an F-test was performed to test whether common coefficients could be assumed over all cross-sections in the sample. In all cases, the test failed to reject the null hypothesis of poolability.

In columns III and IV, a pre-election year dummy is added to the model. In both specifications the election coefficients have a negative sign but are not very significant. Moreover, the fit of the model does not improve substantially compared with the benchmark regressions. However, this changes when the pre-election year dummy is replaced by an election year dummy (columns V and VI). Now the adjusted R 2 rises to about .46 and the election effect is highly significant. Also an unexpected increase in GDP growth has a positive and significant effect on the budget balance. However, the coefficient of unexpected inflation remains insignificant. Finally, columns VII and VIII of Table 2 present specifications in which pre-election as well as election year dummies are included. The pre-election year dummy becomes somewhat more significant than before, but the fit of the model decreases slightly compared with the specification in which only an election year dummy is taken into account.

Table 3 presents the results that are obtained when possible election effects are modelled more accurately, that is, by means of the election indicator as suggested by [START_REF] Franzese | Electoral and Partisan Manipulation of Public Debt in Developed Democracies, 1956-1990[END_REF]. In columns I and II an indicator is added with the superscript 'standard', which comprises both pre-election and election years. The coefficients of the output gap and unexpected GDP growth are significantly different from zero. There is also a highly significant election effect. If the election variable is decomposed into separate effects for preelection and election years, the same pattern as in Table 2 becomes visible. Columns III and IV of Table 3 show that there is no effect in the pre-election year, while columns V and VI indicate the existence of a highly significant effect during the election year. This is underlined by the high adjusted R 2 . Columns VII and VIII of Table 3 show that including the two indicators simultaneously does not lead to a significant effect during pre-election years.

Hence, our results suggest that only during the election year does the budget deficit increase. This increase amounts to 0.96% of GDP according to the model with the election year dummy and 0.83% of GDP according to the model with the election year indicator. 6 The latter figure is obtained by multiplying the coefficient estimate for the election year indicator obtained in column VI of Table 3 by the average value of the indicator over all election years (which is 0.38 in our sample). At first sight it seems rather peculiar that there exists such a large difference between the effects of pre-election and election years. This is especially surprising since the average value for all pre-election year indicators in the sample is 0.65, indicating that in general a large fraction of the 365-day period prior to elections in our sample was part of the pre-election year. However, there is a plausible explanation for this phenomenon that can be derived from the third-generation PBC models as outlined above. In these models, it is assumed that the government uses short-term excess borrowing as a hidden effort -that is, as a policy instrument unobservable to the electorate -in order to increase its performance index. Borrowing extra money during a preelection year is less easy to hide in comparison with borrowing during an election year because information on the pre-election year's budget deficit is likely to be published prior to the election date. As a result, the policy instrument is no longer unobservable since all excess government borrowing will be noticed by the electorate. Consequently, the increase in the government's performance index will not take place. In fact, the index might even decline if the electorate strongly prefers budgetary discipline. 7 The mechanism described above also implies that the relationship between the timing of an election during the year and electorally induced fiscal policy manipulations is non-monotonic. There is a trade-off between two effects: a higher value of the election year measure indicates that during that year there is ample time for the government to increase its performance index, but a higher value of the election year variable also indicates that it will be more difficult for the government adequately to hide its efforts from the electorate since more reliable statistics on the size of the budget balance are available to the public.

------------------------------------------------------
------------------------------------------------------
To test this further, we transform the election year indicator into two dummy variables. The first dummy (D Election in Q1/Q4 ) is given a value of 1 if an election took place during the first or last quarter of the year; in all other cases its value is set to 0. The second dummy variable is constructed in the same way, but indicates whether an election took place during the second or third quarter. If the hypothesized trade-off indeed exists, the election effect should be strongest for observations covered by the second dummy variable. Columns I and II of Table 4 present the results. Clearly, both models fit the data substantially better than the models estimated before, and the coefficient estimates for both dummy variables suggest that the relationship between the change in net lending and the value of the election year indicator is non-linear. This is further supported by the results from columns III and IV, which account for a non-linear election effect by using a squared election year indicator in addition to the original one. The model fit is quite good, and the coefficients for the election year variables are highly significant. 8 The pattern that can be derived from the coefficient estimates for the election effect (based on column III of Table 4) is depicted in Figure 1. The graph shows that fiscal policy becomes more expansionary when the election date is closer to the middle of the year.

Sensitivity analysis

In order to test the robustness of our results with respect to sample composition, we estimated equations III and IV of Table 4 12 times, each time excluding one country from the sample. Although the exclusion of France results in an insignificant coefficient for the unexpected growth variable, 9 the election effect is always highly significant (results available on request).

In addition, we estimated specifications III and IV using alternative indicators of fiscal policy that have been suggested in the literature as the dependent variable. First, while excluding the output gap as a regressor, we used cyclically adjusted changes in net lending. Second, we employed the level of net lending while adopting the output gap level instead of the change therein as a regressor. And, third, we used changes in the primary balance. In all cases, the outcomes were highly comparable to the ones originally obtained, the election year effect being slightly weaker in the first case, somewhat stronger in the second, and virtually unchanged in the third (results are available on request). Next, we examined whether our findings are influenced by the inclusion of variables reflecting political-institutional conditions that have been suggested to affect fiscal policy. Therefore, in specification III of Table 4 we included variables reflecting (i) the type of government, (ii) the fractionalization of government, and (iii) the positioning of the government on a Left-Right scale. 10 Since [START_REF] Roubini | Government Spending and Budget Deficits in the Industrialized Countries[END_REF], various studies have examined the impact of the type of government on fiscal policy outcomes. The basic idea is that coalition governments are weaker than single-party majoritarian governments and therefore will end up with higher deficits if the country concerned is hit by a negative economic shock. [START_REF] Roubini | Government Spending and Budget Deficits in the Industrialized Countries[END_REF] present evidence in support of this view, but other studies reject the hypothesis (see, for example, De [START_REF] Haan | Political and Economic Determinants of OECD Budget Deficits and Government Expenditures: A Reinvestigation[END_REF]. To take the type of government into account, we constructed a dummy, which is 1 in the case of a single-party government and 0 in all other cases. It turned out that the dummy's coefficient was positive but highly insignificant, with a p-value of .54. The other results remained unchanged. [START_REF] Perotti | Fragmented Fiscal Policy[END_REF] argue that the fractionalization of government -measured by the number of political parties or the number of spending ministers in government -affects fiscal policy. The more fragmented the government, i.e. the greater the number of parties or spending ministers, the higher will be the budget deficit. There is quite a lot of support for this view (see, for instance, [START_REF] Volkerink | Fragmented Government Effects on Fiscal Policy: New Evidence[END_REF]. Therefore, the number of political parties in government and the number of spending ministers in government were separately included in the regressions. They both failed to reach significance (p-values of .18 and .91, respectively) and did not affect the election effect.

As [START_REF] Franzese | Electoral and Partisan Manipulation of Public Debt in Developed Democracies, 1956-1990[END_REF] puts it, at least since [START_REF] Hibbs | Political Parties and Macroeconomic Policy[END_REF] political economists have argued that parties of the Right and Left differ in their fiscal policy priorities. Specifically, left-wing governments favour larger public economies, greater redistribution and more Keynesian expansion, and so are expected to run greater deficits than right-wing governments. Since several empirical studies indeed suggest that the political colour of a government affects fiscal policy outcomes (see [START_REF] Franzese | Electoral and Partisan Cycles in Economic Policies and Outcomes[END_REF], for a discussion), the influence of the government's positioning on a Left-Right scale was also taken into account. This was done by constructing the variable GCOL, which uses a scaling from 1 for ultra-left to 20 for ultra-right governments. Data on party colour were obtained from Benoit and Laver (2005). The estimation results are presented in columns V and VI of Table 4. The political composition of the government does indeed have a significant influence on the change in net lending. However, this influence is rather small. Again, adding this variable does not substantially affect the coefficient of our election variables.

Finally, some specific non-political variables were added to the model as a further robustness test. A number of previous studies have suggested that there may be asymmetries in fiscal responses to recessions and upturns. For instance, [START_REF] Mayes | Pressures on the Stability and Growth Pact from Asymmetry in Policy[END_REF] argue that during recessions governments pursue expansionary fiscal policies to combat the downturn, whereas during economic upswings the proceeds are used for cutting taxes or increasing spending rather than for additional consolidation. Therefore, a dummy is constructed that is 1 in the case of a positive change in the output gap and 0 otherwise. Because it is highly insignificant, with a p-value of .77, there is no reason to assume that fiscal policy responds differently in magnitude to positive changes in the output gap than to negative changes. Including the variable did not affect our other results.

The debt-to-GDP ratio was also added to the model because it may capture concerns about the sustainability of fiscal policy [START_REF] Tujula | What Determines Fiscal Balances? An Empirical Investigation in Determinants of Changes in OECD Budget Balances[END_REF]. From a sustainability perspective, increasing debt ratios should lead to an improvement in the budget balance. In fact, [START_REF] Melitz | Some Cross-Country Evidence about Fiscal Policy Behaviour and Consequences for EMU[END_REF] suggests the use of a quadratic formulation for the debt ratio because higher debt levels may induce more stabilizing fiscal reactions. However, a higher debt ratio also causes a rise in interest payments, resulting in a worsening fiscal balance. As a consequence, the overall effect of the debt ratio on budget balances is not a priori clear. Indeed, the coefficients of the level and the squared level of the debt-to-GDP ratio are insignificant, with p-values between .15 and .22. Again, the election effect remains unchanged.

Conclusions

As [START_REF] Buti | Discretionary Fiscal Policy and Elections: The Experience of the Early Years of EMU[END_REF] point out, in the run-up to the monetary union the incentives for national policy-makers to stick to the announced consolidation path were quite strong because failure to meet the convergence criteria carried the penalty of exclusion from the euro area. This was considered too harsh a political sanction. However, things may be different once a country has been admitted to the monetary union. That is, unlike the Maastricht convergence criteria, sticking to the rules of the SGP may not pay politically. This holds true especially for large countries (see De [START_REF] De Haan | Why Did the Stability and Growth Pact Fail?[END_REF]. Moreover, the adoption of fiscal consolidation policies during the runup to the monetary union might have actually created the room for manoeuvre for politically motivated fiscal actions.

This article has examined whether there is a PBC in EU member countries in the euro area despite the adoption of the Stability and Growth Pact. We have concentrated on EU members that have adopted the euro because the rules of the SGP are less strict for member countries that are not part of the currency union. We use a more sophisticated approach than previous studies that focused on the recent fiscal policy experience of EU member countries. Using data for the period 1999-2004, we have found strong evidence that the SGP did not withold policy-makers from pursuing expansionary fiscal policies before elections. In an election year -but not in the year prior to the election -the budget deficit increases. This result is in line with third-generation PBC models, which are based on moral hazard. We have also concluded that fiscal policy is somewhat more expansionary under left-wing policy-makers.

Finally, two important caveats are in order. First, since the currency union started only six years ago, our analysis is based on a short sample period. Nonetheless, given the relatively large number of elections in the period 1999-2004 -all countries had general elections as part of the regular electoral cycle -our evidence clearly indicates the existence of electorally motivated fiscal policies. Second, our analysis is based on aggregate measures of discretionary fiscal policy and may therefore not fully capture PBCs. Governments may lower taxes or give extra subsidies to special interest groups in order to maximize the probability of being re-elected, and such changes may not show up in aggregated data. A suggestion for future research is therefore to use more disaggregated measures of discretionary fiscal policies.

Notes

We would like to thank the participants in the SOM workshop (19-20 May 2005, Groningen, the Netherlands) and four anonymous referees for their helpful suggestions regarding previous versions of the article.

1 A political budget cycle is a periodic fluctuation in a government's fiscal policies, which is induced by the cyclicality of elections. [START_REF] Shi | Political Budget Cycles: A Review of Recent Developments[END_REF] review some recent developments in the theory and evidence of these cycles. See also [START_REF] Franzese | Electoral and Partisan Cycles in Economic Policies and Outcomes[END_REF] and [START_REF] Drazen | The Political Business Cycle after 25 Years[END_REF] for extensive reviews of the literature.

2 There are exceptions, however. For instance, [START_REF] Alesina | Political Cycles and the Macroeconomy[END_REF], who perform cross-section time series regressions on a panel of 13 OECD countries for the period 1961-93, find that the government budget deficit is 0.6% of GDP higher in election years. Also [START_REF] Franzese | Electoral and Partisan Manipulation of Public Debt in Developed Democracies, 1956-1990[END_REF] reports evidence for electoral manipulation of fiscal policy in his sample of 20 OECD countries. 3 However, the evidence of Von Hagen is not very convincing. For instance, he takes both presidential and parliamentary elections into account even though presidents in some countries have hardly any influence on policy-making. De Haan et al. (2003) could not replicate his findings. 4 See [START_REF] Amtenbrink | Economic Governance in the European Union -Fiscal Policy Discipline versus Flexibility[END_REF] for an extensive discussion of the SGP.

De [START_REF] De Haan | Why Did the Stability and Growth Pact Fail?[END_REF] examine the weaknesses of the SGP. See also [START_REF] Schuknecht | EU Fiscal Rules: Issues and Lessons from Political Economy[END_REF]. 5 The first part of this section heavily draws on [START_REF] Andrikopoulos | Fiscal Policy and Political Business Cycles in the EU[END_REF] and [START_REF] Shi | Political Budget Cycles: A Review of Recent Developments[END_REF]. See [START_REF] Lohmann | Rationalizing the Political Business Cycle: A Workhorse Model[END_REF] for an analysis of monetary policy. 6 This conclusion is not affected by the exclusion of snap elections in calculating the election indicators (results available on request). 7 There is some evidence (see, for instance, [START_REF] Brender | The Effect of Fiscal Performance on Local Government Election Results in Israel: 1989-1998[END_REF] suggesting that a deterioration in the financial position of the government harms the incumbent's chances of re-election. [START_REF] Brender | The Effect of Fiscal Performance on Local Government Election Results in Israel: 1989-1998[END_REF] argues that this should be the case in all 'well developed democracies' where voters can monitor the evolution of public finances. [START_REF] Drazen | Reconciling Fiscal Conservatism and Political Fiscal Cycles[END_REF] try to reconcile this fiscal conservativeness and the PBC. 8 A caveat is in order here since the sample contains only three observations for which the election year indicator has a value greater than .5. However, the squared election indicator becomes insignificant only when all three of these observations are removed, making it unlikely that it is based on an outlier. Hence, even though all other results also suggest a non-linear election effect, further research into the non-linear effect is warranted once more data are available. 9 This could be the result of collinearity between forecasting errors in growth rates and changes in the output gap since the correlation between both variables is .75. However, this does not affect our main conclusions because both regressors are used only as control variables meant to pick up the impact of non-discretion fiscal policy on the budget balance. 10 We did not include an indicator of budgetary institutions because figures are not available for all countries over our estimation period. See, for instance, [START_REF] Hallerberg | Domestic Budgets in a United Europe: Fiscal Governance from the End of Bretton Woods to EMU[END_REF] for a discussion.

Figure 1

 1 Figure 1Graphical representation of the election year effect.

Measure it Mink and de Haan Are there Political Budget Cycles in the Euro Area? 1 9 7 Table 1

  Net lending (% GDP) in EMU member states: 1999-2004

									Non-
								Election election All
		1999 2000 2001 2002 2003 2004 years	years	years
	Austria	-2.3 -1.5	0.3 -0.2 -1.1 -1.3 -1.3	-0.9	-1.0
	Belgium	-0.4	0.2	0.6	0.1	0.4	0.1	0.0	0.3	0.2
	Finland	2.2	7.1	5.2	4.3	2.5	2.1	2.4	4.7	3.9
	France	-1.8 -1.4 -1.5 -3.2 -4.2 -3.7 -3.2	-2.5	-2.6
	Germany	-1.5	1.3 -2.8 -3.7 -3.8 -3.7 -3.7	-2.1	-2.4
	Greece	-3.4 -4.1 -3.6 -4.1 -5.2 -6.1 -5.1	-4.1	-4.4
	Ireland	2.6	4.4	0.9 -0.4	0.2	1.3 -0.4	1.9	1.5
	Italy	-1.7 -0.6 -3.0 -2.6 -2.9 -3.0 -3.0	-2.2	-2.3
	Luxembourg	3.4	6.2	6.2	2.3	0.5 -1.1	1.2	3.8	2.9
	Netherlands	0.7	2.2 -0.1 -1.9 -3.2 -2.5 -2.6	0.1	-0.8
	Portugal	-2.8 -2.8 -4.4 -2.7 -2.9 -2.9 -2.8	-3.3	-3.1
	Spain	-1.2 -0.9 -0.5 -0.3	0.3 -0.3 -0.6	-0.4	-0.5
	Average
	(unweighted) -0.5	0.8 -0.2 -1.0 -1.6 -1.8 -1.4	-0.5	-0.7

Sources: see appendix on the EUP webpage.

Table 2

 2 Estimation results: Election dummy

	Dependent variable	⌬BB

Table 3

 3 Estimation results: Election indicator

	Dependent variable	⌬BB

European Union Politics 7(2)

0 3

Dependent variable

⌬BB ------------------------------------------------------


Han Dorussen

Kyriaki Nanou

European Integration, Intergovernmental Bargaining, and Convergence of Party Programmes

Over the past 50 years, the European Union (EU) has dramatically increased its policy-making power. However, there remains considerable variation over time as well as across policy areas in the relative power of the EU and the member states. The variation is likely to influence EU-wide bargaining. Following the logic of bargaining games with domestically constrained actors, or two-level games, the changes in the bargaining environment may also influence party competition within the member states of the European Union. Using manifesto data for 1951-2001, this article examines convergence of party programmes across Western Europe. It is shown that European integration has increasingly constrained the range of policy platforms. Moreover, we generally find a stronger effect if and when countries are actually members of the EU. European integration bolsters programmatic convergence of Euro-friendly as well as Eurosceptic parties. However, European integration particularly influences the convergence of Eurosceptic parties in EU member states.

Although the process has not always been a smooth one, it is undeniable that the institutions of the European Union (EU) have increased dramatically in importance over the past 50 years. Throughout this period, a defining feature of the European Union has remained its system of multilevel governance in which the competencies of the various levels of authority are not clearly separated. The EU is still a prime example of power-sharing between national and supranational authorities. Decision-making power for nearly all policy issues falls between the national and the EU level. Consequently, it is appropriate to view European integration as a process by which bargaining power is shifting from national political institutions to the European supranational institutions. So far, this has particularly affected the legislative and executive branches of government, where national governments and parliaments find themselves weakened relative to the European Commission and, less obviously, the European Parliament. However, the increasing importance of the European Court of Justice indicates that a similar shift of power now also affects the judiciary.

The leading research question of this article is how, if at all, national polities react to the structural loss of bargaining power relative to EU institutions. Based on the logic of two-level games, we examine empirically whether European integration has led to programmatic convergence. The logic of two-level games suggests that changes in the bargaining environment may lead to a 'rallying-around-the-flag' effect in the member states, in particular when policies coming from Europe are perceived as a threat to the domestic status quo. [START_REF] Schelling | The Strategy of Conflict[END_REF] argued that, in international negotiations, governments can benefit from the perception of being politically vulnerable at home, the so-called 'paradox of weakness'. This conjecture has been applied to analyse the importance of domestic veto players, as well as the size of the domestic 'win-set', defined as the area of possible outcomes that can win majority support to change the status quo [START_REF] Shepsle | The Institutional Foundations of Committee Power[END_REF]. Closely related, [START_REF] Putnam | Diplomacy and Domestic Politics. The Logic of Twolevel Games[END_REF] thesis states that a smaller domestic 'win-set' increases the bargaining power of negotiators in intergovernmental bargaining (see also, [START_REF] Iida | When and How Do Domestic Constraints Matter? Two-Level Games with Uncertainty[END_REF][START_REF] Milner | A Model of the Two-Level Game[END_REF]. [START_REF] Tsebelis | Decision Making in Political Systems: Veto Players in Presidentialism, Parliamentarism, Multicameralism and Multipartyism[END_REF][START_REF] Tsebelis | Veto Players: How Political Institutions Work[END_REF] reasons accordingly that a unified parliament acting as a unified collective veto-player strengthens the bargaining position of its national government, because it is a more effective constraint.

Research into the Schelling or Putnam conjecture has generally evaluated the outcomes of international negotiations, and analysed whether more constrained negotiators indeed got a better deal (e.g. [START_REF] König | Ratifying Maastricht. Parliamentary Votes on International Treaties and Theoretical Solution Concepts[END_REF][START_REF] Hug | In View of Ratification. Governmental Preferences and Domestic Constraints at the Amsterdam Intergovernmental Conference[END_REF][START_REF] Bailer | Nash or Schelling: Legislative Bargaining with and without Domestic Constraints[END_REF]). 1 Only a few studies consider what would seem to be a logical consequence of the Schelling conjecture: if governments benefit from 'tying their hands', then they should have a strategic incentive to do so. [START_REF] Fearon | Signaling versus the Balance of Power and Interests: An Empirical Test of a Crisis Bargaining Model[END_REF][START_REF] Fearon | Signaling Foreign Policy Interests: Tying Hands versus Sinking Costs[END_REF], [START_REF] Tarar | International Bargaining with Two-Sided Domestic Constraints[END_REF] and Leventog ˘lu and [START_REF] Leventog ˘lu | Pre-negotiation Public Commitment in Domestic and International Bargaining[END_REF] argue that negotiators may create so-called audience costs by escalating a conflict. Most relevant, however, are the studies by [START_REF] Mo | The Logic of Two-Level Games with Endogenous Domestic Coalitions[END_REF] and [START_REF] Pahre | Endogenous Domestic Institutions in Two-Level Games and Parliamentary Oversight of the European Union[END_REF], which allow for endogenous domestic institutions.

If a unified parliament increases its government's bargaining power, then parties may have an interest in presenting a common stance. In other words, is it indeed the case that European integration has led political parties to converge to a common unified stance in order to boost national influence at the European level? Do such strategic considerations affect the policy platforms of all parties similarly? It may be necessary to distinguish between government and opposition parties, as well as parties that are generally pro-EU or anti-EU. Finally, the notion of 'win-set' suggests that it is only the policy positions of parties that are needed for a majority in parliament that matter. Consequently, we test the Putnam thesis specifically for the relevant minimum winning coalition (MWC) that can be identified in parliament for a particular policy issue [START_REF] Riker | The Theory of Political Coalition[END_REF][START_REF] Axelrod | Conflict of Interest. A Theory of Divergent Goals with Applications to Politics[END_REF].

There are some recent examples that parties may indeed exhibit such strategic behaviour. During the 2005 negotiations on the EU budget, the Labour and Conservative parties in Britain largely agreed on the need to protect the British rebate and the need for changes in the Common Agricultural Policy. Similarly, in 2004, Greek parties across the political spectrum converged on the need to protect subsidies to olive growers as well as cotton and tobacco producers during the negotiations on the reform of subsidy status for Mediterranean products. Falkner et al. (2005: 333), moreover, note that the 'world of domestic politics' does not stop once a common policy has been agreed. With regard to Great Britain they observe:

For ideological reasons, the Conservative government fought hard against the Directives at the EU level. The transposition process was then frequently used as a 'continuation of decision-making by other means,' i.e. as an opportunity to continue combating Directives that were already adopted against the will of the UK government. (Falkner et al., 2005: 333) For example, in 1986 the British Conservative government decided to opt out of the Social Protocol, whereas during the 1980s Labour had supported harmonization of social policy standards throughout the EU. However, Labour's position on this matter changed markedly in the run-up to the general election of May 1997. Although in 1997 the New Labour government agreed to sign up to the Social Protocol during the negotiations of the Amsterdam Treaty, its approach towards implementation was in line with its general stance to minimize the effects of the directives. Especially with relation to the Parental Leave Directive, the Employment Relations Act of 1999 incorrectly transposed this directive by setting lower rules than were required by the directive (Falkner et al., 2005: 147-8;Sifft, 2004: 19).

The next section reviews the emerging literature on the impact of European integration on the convergence of party programmes. The third section presents a two-level bargaining model to analyse strategic programmatic convergence. Next, we test whether there has indeed been such convergence in the various member states of the European Union: the fourth section details the research design, and section five presents the main results. We find significant effects of European integration on the issue-specific content of party programmes. European integration bolsters programmatic convergence of Euro-friendly as well as of Eurosceptic parties, although these parties still respond differently to this and other external influences. Policy positions of governing or minimum winning coalitions are less obviously affected by European integration. The conclusions briefly discuss the implications of our findings for the study and practice of European integration.

European integration and convergence of party programmes

There is a growing literature studying the EU impact on the organizational structure of political parties, in particular on the relationship between national parties and European parliamentarians and the functioning of European party families [START_REF] Hix | Political Parties in the European Union[END_REF]. A further area of consideration has become the importance of the EU and European issues in domestic electoral competition. The central research questions here are when political parties will emphasize their pro-or anti-EU stance, and what are the electoral gains and losses of such an electoral strategy [START_REF] Marks | National Political Parties and European Integration[END_REF].

Yet only very recently scholars have begun to examine the possible broader impact of European integration on party programmes. A small number of studies look for evidence in the manifesto data (Budge et al., 2001) to see whether EU membership influences the policy space in which parties compete at the national level [START_REF] Mair | The Limited Impact of Europe on National Party Systems[END_REF][START_REF] Binnema | European Integration and National Party Politics: Business as Usual?[END_REF][START_REF] Hix | The End of Democracy in Europe? How the European Union (as Currently Designed) Restricts Political Competition[END_REF][START_REF] Bernhard | The European Union's Impact on Domestic Party Competition[END_REF][START_REF] Nanou | European Integration and Domestic Policy Convergence[END_REF]Pennings, in this issue). These studies disagree, however, on the precise impact of European integration on party policy competition as well as on the mechanisms behind the process. [START_REF] Mair | The Limited Impact of Europe on National Party Systems[END_REF] argues that the process of European integration removes the political-ideological element from an increasing number of policy issues. Issues that are in effect determined at the European level eventually get omitted from the domestic debate, because voters, and by extension parties, become largely indifferent about them. Ultimately, voters care about the impact of their choice on policy outcomes, and they discount 'empty' promises. If in the end politics is more about substance than about form, EUregulated issues should eventually be left out of political manifestos. It follows that, as long as a fully democratic debate at the European level is lacking, voters' choice is in fact diminished (Mair, 2000: 48-9).

The studies by [START_REF] Hix | The End of Democracy in Europe? How the European Union (as Currently Designed) Restricts Political Competition[END_REF] and [START_REF] Bernhard | The European Union's Impact on Domestic Party Competition[END_REF] basically agree with [START_REF] Mair | The Limited Impact of Europe on National Party Systems[END_REF] de-politicization argument. Once in government, parties have to abide by policy commitments that derive from EU membership. Parties are thus unlikely to advocate policies that contradict such commitments, since they may be held accountable by their electorates. In order to avoid suffering electoral penalties, parties prefer to de-emphasize or avoid altogether EUregulated issues. Hix (2003: 9-11) argues that the constraining impact of EU membership causes domestic party competition to shift the focus from policy content to 'political beauty contests ' (2003: 10). Voters are asked to choose between the personalities and managerial abilities of the candidates rather than their policy platforms. [START_REF] Bernhard | The European Union's Impact on Domestic Party Competition[END_REF] argues that, in order to differentiate themselves, parties focus their competition on issues that do not fall under the EU decision-making framework. He suggests further that political parties emphasize their opposition to common European policies if this accords with their more Eurosceptic position in general. The de-politicization argument implies that there is an implicit convergence of party platforms, because EU-regulated issues get deleted from party manifestos.

In contrast, [START_REF] Nanou | European Integration and Domestic Policy Convergence[END_REF] argue that European integration has led to an explicit convergence of party positions since parties are increasingly aware of the constraints on domestic governance. Their research emphasizes that the competency of the EU has varied over time and across policy areas. However, voters still expect parties to take a stance, even for issues that have become largely EU regulated. Parties avoid making false promises, but want to differentiate themselves even when faced with a limited range of feasible positions. [START_REF] Nanou | European Integration and Domestic Policy Convergence[END_REF] find empirical support for the idea that EU integration has led to a convergence of party policy positions. In agreement with [START_REF] Hix | The End of Democracy in Europe? How the European Union (as Currently Designed) Restricts Political Competition[END_REF], they find that issues that fall under the traditional left-right policy space are not removed from party competition even if they are regulated at the EU level -arguably, because they remain salient for voters and constitute the central part of the political debate in terms of ideology. However, like Bernhard (2004: 4), they find that the impact of EU membership is not the same for all parties. If parties have a real chance of winning office, they are more constrained by European integration. In contrast, extreme or protest parties can gain votes by simply (and strategically) ignoring the reality of European politics.

All studies mentioned so far share the Downsian (1957) assumption that parties are vote-maximizers and care about policy only indirectly. Further, they all analyse European integration as a constraint on the feasible policy space. However, only [START_REF] Nanou | European Integration and Domestic Policy Convergence[END_REF] test the implication that, if the EU indeed limits the feasible policy space, party programmes should converge not only within but also across EU member states.

European integration: Loss of national bargaining power and strategic convergence of party programmes

Here, we explore an alternative explanation for the possible convergence of party positions. The process of European integration can also be interpreted as a shift of bargaining power from the national governments to the institutions of the European Union. How, if at all, could a loss of national bargaining power affect the (strategic) positioning of political parties? First, we need to consider the basic bargaining situation between the government of a member state (GOV) and 'Brussels' (EU). Admittedly, the key negotiations within the EU are between governments, but the assumption of negotiations between national governments and EU institutions is neither very unrealistic nor terribly restrictive. Generally, governments decide the framework for a common policy, but day-to-day political decisions are made by the Council of Ministers and implementation of policy is left to the Commission. The bargaining model does not deny that parties have an interest in influencing the common policy, but it concentrates on the remaining room for manoeuvre and on setting a national policy that differs from the common policy. 2 As [START_REF] Falkner | Complying with Europe. EU Harmonisation and Soft Law in the Member States[END_REF] observe, the world of domestic politics also applies to the transposition process. Governments still rely on parliamentary support for policies that are set under so-called 'secondary' EU legislation, namely regulations, directives, decisions, recommendations and opinions. These vary in the extent and degree of application, from regulations being binding to opinions having no binding force (Nugent, 2003: 238-40;Hix, 1999: 103).

Figure 1 illustrates that the eventual agreement or policy outcome will fall between the ideal points of the government and the common European policy. If the government could simply ignore the EU, the agreement would be identical to the GOV ideal point. If the EU had complete power, the governments of the individual member states would have no choice but to implement the common European policy as interpreted by 'Brussels'. Further, as long as the member states retain veto power, a government concedes only up to the point (GOV M ) that makes it indifferent between the status quo (SQ) and the eventually accepted position. 3 The Nash Bargaining Solution (NBS) determines the bargaining outcome more precisely. The NBS has several desirable properties: it provides a unique solution, which does not discriminate against any of the negotiators, and it is Pareto optimal. Assuming equal bargaining power, the NBS splits the difference between the reservation values of all negotiators within the Paretooptimal bargaining space. For example, in Figure 1, the NBS is halfway between GOV and GOV M (EU). Finally, the solution of its main alternative, the Stahl-Rubinstein alternative offers game, converges to the NBS when the time between the offers is reduced (Muthoo, 1999: 52-3). Lacking specific information about the bargaining protocol -as is common in most international negotiations -the NBS is thus definitely reasonable. The asymmetric NBS allows for differences in bargaining power, where more powerful players obtain more. In Figure 1, if the bargaining power of the EU increases, the asymmetric NBS predicts an agreement closer to the GOV M . Similar, a stronger government pushes the outcome closer to its ideal point (GOV).

The need for legislative support or ratification of the agreement creates a domestic constraint on the international negotiations. In effect, two-level bargaining games introduce the legislative body as a veto player (VP) and provide the government with an outside option, which depends on majority support in parliament and often includes the opposition [START_REF] Pahre | Endogenous Domestic Institutions in Two-Level Games and Parliamentary Oversight of the European Union[END_REF]. By construction, the NBS depends on the reservation value of the negotiators. The reservation value is the utility of the outcome that results if the bargaining fails or 'breaks down'. Typically, the bargaining failure outcome is a reversal to the status quo ex ante. More specifically in the context of the politics of the European Union, bargaining failure implies further delay in determining or implementing a common European policy. Figure 2 how the domestic constraints created by a veto player can benefit the government in negotiations with the EU.

By relying on a veto player, the government is able to constrain the bargaining space to the range VP-VPM, where VPM is the most the veto player is willing to concede. Given the specific bargaining strength of the veto player relative to the EU, it is straightforward to determine when a government prefers to delegate bargaining. As shown in Figure 2, the government prefers to invoke a veto player if the (a)symmetric NBS of the government and the EU falls within X. If so, the threat with delegating bargaining to a veto player is credible. Put differently, given a particular bargaining outcome x, which falls within the Pareto-optimal bargaining space of the government and the EU, it is possible to identify a veto player located between the status quo (SQ) and the government's ideal point (GOV) that would generate a more preferred outcome. Figure 2 thus provides a straightforward illustration of [START_REF] Schelling | The Strategy of Conflict[END_REF] and [START_REF] Putnam | Diplomacy and Domestic Politics. The Logic of Twolevel Games[END_REF] conjecture that greater domestic constraints can provide a bargaining advantage in international negotiations.

Figure 2 provides further insights into the role of domestic constraints in international negotiations. Domestic constraints are more valuable to a government if it has less bargaining power. If the NBS is closer to GOV M , the government is more likely to rely on a veto player. In this case, the government will accept a veto player that is further away from its ideal point. When a government has more bargaining power, domestic constraints become less valuable, and the government is more likely to avoid veto players that are close to the status quo.

However, some additional assumptions are required before we can link

NBS GOV-EU NBS VP-EU SQ VP GOV EU GOV M VP M U GOV X Figure 2
Bargaining and invoking veto players.

these insights to the strategic incentives of political parties. First, political parties position themselves in the same policy space as the government and the institutions of the EU. Secondly, a government has to find a simple majority in parliament to support any agreement. Thirdly, the ideal point of the government (GOV) does not necessarily reflect the ideal point of a majority in parliament, but there is some faction in parliament with an identical ideal point. Finally, a majority in parliament prefers the ideal point of the government (GOV) to the common EU policy as well as to the status quo (SQ). It is helpful to distinguish two further 'positions' in the space: parties located to the 'left' of the government's ideal point (GOV) are more Eurosceptic and potential veto players, whereas parties located to the 'right' of the government are more Euro-friendly. To find a majority in parliament, the government thus has to rely on the support of either Eurosceptic or Eurofriendly parties.

Eurosceptic parties are potential veto players, but from the perspective of the government the constraint is desirable only if it provides a better bargaining outcome. In Figure 3, based on a given (a)symmetric NBS solution, VP defines the ideal position of the most Eurosceptic party that is a feasible veto player. In contrast, Euro-friendly parties do not obviously improve the bargaining position of the government. By definition, these parties are located further from the status quo than the government and are consequently willing to accept any bargaining outcome that the government finds acceptable. However, Euro-friendly parties are willing to support agreements that are unacceptable to Eurosceptic parties. In effect, they enable the government to delegate veto power to a party that can reach an agreement close to the government's ideal point. Figure 3 depicts the strategic incentives of the political parties.

Political parties thus vary in their incentive to move their policy platform, depending on the initial location of their ideal point and their reservation value. Figure 3 considers these incentives separately. Political parties with an ideal point in A prefer the outcome of any bargain between the veto player (VP) and the EU (symmetric NBS) to the outcome of bargaining between the government and the EU (asymmetric NBS) as well as the SQ. Political parties located in B prefer the asymmetric NBS between the government and the EU to the symmetric NBS between the veto player and the EU. However, they still prefer the outcome of symmetric Nash bargaining between the government and the EU to the asymmetric NBS.

Parties in A face a trade-off between their optimal outcome, the symmetric NBS based on their role as veto player, and not being invoked. This tradeoff pushes them towards the ideal position of the government if not being invoked leads to a less desirable outcome. In contrast, parties in B face a tradeoff between their optimal bargain, the symmetric NBS between the government and the EU, and the prospect of veto player bargaining or even bargaining failure. Again, this trade-off pushes them towards the government's position. The trade-off is only very minor for parties with ideal points in the overlap of A and B, and we expect them largely to stay put. Finally, parties with ideal points close to the SQ or the EU ideal point have no incentive to alter their policy positions, since they are not interested in strengthening the hands of their government. Ultimately, these results depend on the necessity of the government to find a majority in parliament for any of the possible outcomes, but also on its choice between using parties in A or B.

To summarize, policy convergence may result from a 'rallying around the flag' effect, in particular when the policies coming from the EU level are perceived as a threat to the domestic status quo. Political parties may then converge to a common unified stance in order to boost national influence at the European level. The bargaining model thus not only illustrates [START_REF] Tsebelis | Decision Making in Political Systems: Veto Players in Presidentialism, Parliamentarism, Multicameralism and Multipartyism[END_REF][START_REF] Tsebelis | Veto Players: How Political Institutions Work[END_REF] argument about the importance of a unified parliament within the context of European politics, but also extends the argument to show that this provides parties with an incentive to position themselves strategically. Finally, the analysis shows that not all parties are willing to position themselves strategically closer to the government's ideal point; to be precise, extremist parties are more likely to stay put.

In the bargaining model, political parties care only about policy and their manifestos reflect their policy preferences. Clearly, parties have other interests as well. They want to gain as many votes as possible and get into office.

The discussion so far has largely ignored the impact of these motives on party platforms. The empirical analysis controls for these alternative explanations of programmatic convergences. Moreover, it is not unreasonable to treat party manifestos as primarily reflecting policy intentions. Arguably, party manifestos are intended as much for party members and other political insiders, such as journalists and fellow politicians, as for the general public, who tend to remain largely uninformed about and uninterested in their specific content.

Political manifestos may thus very well reflect underlying strategic considerations, including the need to build coalitions to achieve particular policy outcomes.

The implications of the convergence argument are relatively straightforward. Comparing party manifestos within EU member countries, we should find a convergence of policy positions on issues that are (mainly) regulated at the EU level. Interestingly, the bargaining argument suggests various ways in which this convergence may take place: between all (mainstream) parties, between the parties that generally support the government, and between parties that form a potential minimum winning coalition (MWC). The next section elaborates on these distinctions and their operationalization. The bargaining model, however, does not suggest that parties will generally converge around the common European policy. Quite to the contrary, parties are expected to converge on a national policy stance that is as distinct as possible.

Measuring programmatic convergence

Data from the Comparative Manifesto Project (CMP) form the basis for our analysis of programmatic convergence (Budge et al., 2001). The policy position data are based on party programmes of approximately 172 political parties in the 15 West European EU member states, covering the period from 1951 to 2001. As a control, we also include party programmes of countries before they became a member of the EU as well as party programmes from three European countries -Iceland, Norway and Switzerland -that have not joined the EU. The models include a dummy variable to test for the effect of EU membership on programmatic convergence. There are no observations for Greece prior to 1974, for Portugal prior to 1975 or for Spain prior to 1977, since, for obvious reasons, we included countries only when they held democratic elections. In total, the period covers 226 national elections and yields 8844 observations. The CMP data allowed us to code party positions for 11 policy areas. In the manifesto data the units of analysis are (quasi) sentences, and the raw issue scores measure the salience of a particular issue in a party's platform. Salience is converted into policy position by means of scaling. 4 For each policy issue, the party position is the result of subtracting negative from positive references. Further, the party position data required a transposition of the original CMP data such that each entry represents the policy platforms of all parties on a specific policy domain. [START_REF] Hooghe | Types of Multi-Level Governance[END_REF], continuing work initiated by [START_REF] Schmitter | Imagining the Future of the Euro-Polity with the Help of New Concepts[END_REF], provide the information on the level of EU competency differentiated for 11 policy domains. 5 The distance between party positions is measured by the range of policy alternatives. A smaller distance or range indicates a convergence of policy positions (see also [START_REF] Hix | The End of Democracy in Europe? How the European Union (as Currently Designed) Restricts Political Competition[END_REF]. The dependent variables of the party policy data (Range, Range_GOV, Range_MWC, Range_proEU, Range_antiEU) are all indicators of the compactness of the policy space, measured as the range of the party scores on a given issue dimension for a specific country and electoral confrontation. The data are interpolated for the years in between election campaigns. A smaller range indicates that parties are more unified on the specific policy issue. The variables, however, differ in the subset of parties used in the calculations.

Range is an indicator of convergence of the positions of all mainstream political parties. It followed from the bargaining model that convergence should mainly apply to mainstream parties. Consequently, we control for the impact of protest or extreme parties by excluding parties that attained less than 5% of the popular vote. Arguably, Range may still include parties that are largely irrelevant for finding a majority in parliament. Therefore, we also include measures of the range of party positions that should have direct relevance. Range_GOV is an indicator of convergence among the positions of the parties that are in the governing coalition. This measure can, however, be criticized for ignoring that (part of) the government may look for parliamentary support on a particular issue outside the incumbent parties. The implications of the bargaining model presented above clearly rely on such strategic behaviour. Range_MWC indicates the range of positions of the parties that are members of the most compact minimum winning coalition (MWC).

To the best of our knowledge, nobody so far has considered the range of the minimum winning coalition. The basic idea is that European integration leads to more compact MWCs. Operationally, we have to address several issues. First of all, compactness needs to be defined relative to a particular party. We use the party that represents the median voter. 6 Second, we need to determine the most compact subset of the party policy space that encompasses more than 50% of the votes. A minimum winning coalition has less than 50% if one party is excluded. Table 1 illustrates how we can identify the most compact MWC.

In the example of Table 1, Party C represents the median voter, and there are several MWCs that include C, namely {ABC}, {BCD}, and {CE}. Range_MWC is the range of the MWC with the smallest distance between its extreme members. Considering the distances of all relevant MWCs, dist{ABC} = 10, dist{BCD} = 4, and dist{CE} = 6. So, the MWC that we are looking for is {BCD} with Range_MWC = 4. 7 Range_proEU and Range_antiEU rely on the general attitude towards European integration as measured in the CMP. Pro-EU (anti-EU) parties have more positive (negative) than negative (positive) references to European integration in their political manifestos. Parties without any positive references are included in Range_antiEU.

The extent of European integration is the main independent variable. The variable measures whether policy competency has shifted from the national to the EU level. Data are based on expert evaluations of the level of European integration for the various policy domains based on existing treaty obligations and obligations undertaken subsequently. The original data code the extent of EU authority from 2 (absent) to 5 (exclusively EU). However, observations are only rarely coded at the highest levels. European integration is a dummy variable measuring the existence of any European constraints on national policy-making (i.e. the levels 2 and above). The interaction term EU member x European integration picks up whether the impact of increased EU policy competency is unique to EU member states. The models also include a trend variable (Years of EU constraints) measuring the number of years since the introduction of EU constraints. The prediction is a negative relation between European integration and policy divergence.

The main control variables are characteristics of political systems and external (non-EU) constraints. If the number of parties increases, one is more likely to find divergence of party positions. Therefore, the specification includes two institution-specific controls. First, a Three-party dummy distinguishes between party systems with two or three parties (1) and those with more than three parties (0). This roughly separates between majoritarian (generally with only two or three parties) and proportional party systems (generally with more than three parties). Further, the effective number of parties (Effective no. of parties) is used as an institution-specific control. This variable takes into account the number of parties as well as their relative size (Laakso and Taagepera, 1979: 4). European integration is, however, not the only external factor that has been suggested as a cause of party policy convergence. [START_REF] Schmidt | Europeanization and the Mechanics of Economic Policy Adjustment[END_REF] and [START_REF] Kitschelt | Convergence and Divergence in Advanced Capitalist Democracies[END_REF], among others, argue that globalization also affects the national political context. Globalization has put common pressures on all states, particularly when located in a specific geographical region. Consequently, European states may converge on similar best-response strategies, and one of the functions of the EU is to formulate a common response to the external pressures of globalization. In contemporary capitalist economies, globalization may thus also explain the convergence of party positions with respect to socioeconomic issues.

Globalization arguments suggest that convergence will be strongest in small and open economies. We include Population and Openness, the size of a country's exports and imports relative to its GDP, from the Penn World Tables 6.1 [START_REF] Gleditsch | Expanded Trade and GDP Data[END_REF]. We also control for the possible effect of economic development (GDP). The control variables are lagged to precede national elections (and thus the formulation of party programmes). The Trend variable controls for any convergence of party programmes over time. Since the estimation relies on panel data, it needs to be corrected for any correlation of group-specific measurement errors with the dependent variable. Fixed-effects generalized least squares (GLS) models provide the appropriate correction in our case (Greene, 2003: 283-338).

Findings

The main finding is that, as expected, European integration reduces the range of party policy positions, and the constraining effect increases with the number of years the EU has gained policy competency in a given issue area. Moreover, we generally find a stronger effect if and when countries are actually a member of the EU.

Model 1 in Table 2 presents the results of the fixed-effects models applied to the range of party positions for all (main) parties. European integration is negatively related to the range of policy positions, but the coefficient is insignificant. The coefficient for EU membership is positive but not statistically significant either; in other words, there is no clear difference in the range of party positions between EU and non-EU members. However, the negative and significant coefficient of the interaction term (EU member x European integration) shows that EU-level competency reduces the range of policy positions, particularly in EU member states. 8 The coefficient for Years of EU constraints is also negative and significant at the 10% level, indicating that the range of policy platforms reduces if more years have passed since the EU (or one of its predecessors) obtained policy authority in a particular issue area.

The findings for the control variables are largely as expected. The range of policy positions is smaller in party systems with only two or three parties. If the (effective) number of parties increases, the range of policy positions also increases. There is weak support for the idea that party positions diverge more in larger countries. Party positions also seem more alike in richer and more open economies. Finally, there is a trend towards divergence of party programmes over time. These findings corroborate the convergence observed by [START_REF] Hix | The End of Democracy in Europe? How the European Union (as Currently Designed) Restricts Political Competition[END_REF], [START_REF] Nanou | European Integration and Domestic Policy Convergence[END_REF] and [START_REF] Bernhard | The European Union's Impact on Domestic Party Competition[END_REF]. Given that the results presented here are based on a time-and policy-specific evaluation of European integration, they provide strong and precise evidence for an EU effect on party policy positions.

A possible critique of the first model is that it fails to demonstrate that policy convergence is the result of the logic of bargaining models. The bargaining model suggests that the unifying effect of European integration should not be similar for different subsets of parties. Models 2 and 3 examine the policy convergence of coalitions of parties that would be actually or potentially involved in sanctioning any agreement between their government and the EU. Further, Models 4 and 5 contrast the effect of European integration on Euro-friendly rather than Eurosceptic parties.

Model 2 considers the range of policy positions of parties that are actually in government. Among parties in government, we find that European integration correlates only weakly with policy convergence. The coefficients for European integration and the interaction term between EU member and European integration, although still negative, are no longer significant. Excluding the interaction term, however, the effect of European integration is negative and significant (see the Appendix 9 ). Controlling for all other variables, governments in EU member countries tend to have more divergent policy positions. The actual governing coalition may matter less than the existence of any winning coalition willing to ratify an agreement. However, the findings for the minimum winning coalitions provide no clear support for this idea. In model 3, the coefficients of European integration and EU member, as well as the interaction term, are negative but generally not significant. Even excluding the interaction term, the effect of European integration on the Range_MWC is significant only at the 10% level. The only clear finding is that, if more years have passed since the increase in EU competence, the range of MWCs is significantly reduced. Regardless, in models 2 and 3, we cannot distinguish EU and non-EU members concerning the effect of European integration. In model 2, the effects of the controls are not immediately obvious. Large countries have less policy divergence among government parties, and economic conditions (GDP and Openness) are not significant. A possible reason is that coalition governments are particularly common in small, open economies. In the Range_MWC model (model 3), the effects for the institutional and economic control variables are more commonsensical. There is more divergence in proportional systems, but less in more open economies.

Model 4 considers the range of policy positions of parties that are pro-EU, and the final model (model 5) evaluates the policy range of neutral and anti-EU parties (excluding Euro-friendly parties). The bargaining model suggests that convergence should be stronger in the second case, because Euro-friendly parties are less able (or even willing) to improve national bargaining power. Eurosceptic parties, however, can function as credible constraints. We indeed find a more significant effect of European integration if we exclude Euro-friendly parties. The effect of European integration on the party position of Euro-friendly parties inside and outside the EU cannot be distinguished. In model 4, the negative coefficient of European integration is strong and significant, but the effect of the interaction term is insignificant. A reasonable explanation is that parties with a positive attitude towards European integration find themselves generally in agreement on common European policies.

The dynamics among Eurosceptic parties is quite different, as shown in model 5. Here, the effects of European integration on Eurosceptic parties in and outside the EU can easily be distinguished (as shown by the significant coefficient of the interaction between EU member and European integration). By itself, however, European integration is not significant (regardless of whether the interaction term is included or not). With respect to the other control variables, too, Eurosceptic parties are quite different from Euro-friendly parties. Eurosceptic parties resist the converging influence of globalization (as shown by the strong positive coefficient for openness in model 5), whereas openness leads to convergence of the positions of Euro-friendly parties.

In summary, there is consistent support for the idea that European integration leads to a convergence of party policy positions. The effect is generally, but not always, unique to actual members of the EU (or one of its predecessors). Moreover, European integration particularly influences the convergence of Eurosceptic parties in EU member states. This finding is particularly interesting from the perspective of bargaining models, because these parties are especially valuable as constraints. The policy positions of governing and minimum winning coalitions, in contrast, are less obviously affected by European integration. In particular, the lack of a strong finding for minimum winning coalitions is disappointing from the perspective of bargaining models.

Conclusions

There is little doubt that, over the past 50 years, the process of European integration has increasingly affected politics in Europe. The governments of all European countries -and quite a few non-European countries as well -now have to deal with powerful European institutions on a broad variety of issues. In many respects, the interaction between the governments of European countries and the institutions of the European Union follows the logic of bargaining with domestic constraints. The logic of two-level games applies where governments have to seek domestic support for any agreement reached at the international level. [START_REF] Schelling | The Strategy of Conflict[END_REF] and [START_REF] Putnam | Diplomacy and Domestic Politics. The Logic of Twolevel Games[END_REF] derive the main conclusions of such models, namely the so-called 'paradox of weakness' or the bargaining advantages of a smaller domestic 'win-set'. We have argued that two-level bargaining models may also be used to explain strategic positioning by political parties.

In our opinion, the empirical analysis convincingly demonstrates that European integration has reduced the range of policy positions in Europe. Further, the results suggest that it is possible to attribute such convergence, at least partly, to the logic of bargaining models. These findings add to the emerging body of literature that demonstrates that the process of European integration influences the policy options that political parties advocate in the various European countries. So far, the evidence clearly points towards less divergence of policy options, with obvious implications for the quality of democratic debate in Europe. The bargaining model suggests that national parliaments may well unify to bolster a national position that differs from a common European policy. Not only may governments take an opposing position during the negotiation process, but subsequently they can also decline to implement any agreement properly (Falkner et al., 2005: 278). In both instances, they may find themselves strengthened in their 'obstinacy' by a unified parliament. The literature on two-level games in international relations generally argues that domestic constraints help countries to achieve a better deal in international negotiations. Writing specifically about the politics in the EU area, the argument is occasionally turned around. [START_REF] Moravcsik | Why the European Union Strengthens the State: Domestic Politics and International Cooperation[END_REF] and [START_REF] Hosli | The Creation of the European Economic and Monetary Union (EMU): Intergovernmental Negotiations and Two-level Games[END_REF], for example, argue that constraints set by the EU provide national government with more bargaining power relative to their national parliaments. Both arguments suggest that parliaments have a strategic interest in a unified position, but the implications for the behaviour of particular parties may be quite different. Here, we follow the former set-up. 2

Notes

The assumption is not very restrictive, because the common EU policy can also be interpreted as the intergovernmental bargaining outcome were the other EU members able to ignore the preferences of a particular government with an ideal point relatively close to the status quo. [START_REF] Schneider | The Change of Tide in Political Cooperation: A Limited Information Model of European Integration[END_REF] analyse an intergovernmental bargaining model with a 'laggard' government. 3

In Figure 1, the maximum the government is willing to concede (GOV M ) is put at the common EU policy (EU). In Figure 3, the asymmetric NBS is also set at GOV M to keep the graph as simple as possible. It is straightforward to relax these assumptions without significantly altering the conclusions. All figures assume symmetric, single-peaked preferences that are separable across issue domains. 4 [START_REF] Pelizzo | Party Positions or Party Direction? An Analysis of Party Manifesto Data[END_REF] criticizes the use of the manifesto data to determine policy positions. Budge et al. (2001) and Laver and Budge (1992) defend the practice.

We have to admit, however, that there is a risk that our data combine information on salience and direction of policy programmes. We have been careful to avoid apparent convergence on zero values. Moreover, we excluded issue domains for which we could not construct a scale, for example environmental politics. 5

The Appendix, which can be found on the EUP webpage, provides precise information on the correspondence between issue dimensions in the CMP and the [START_REF] Hooghe | Types of Multi-Level Governance[END_REF] data. The Appendix further contains descriptive statistics. 6

Ordering all voters from 'left' to 'right' on a particular issue, the median voter has half or more of all voters on each side. The median voter theorem holds that the party that takes the position of the median voter cannot lose in a majority contest (Enelow and Hinich, 1984: 12). Listing all parties from 'left' to 'right' on a particular issue, the party that represents the median voter has 50% or more of the voters to its left or right, including the percentage of votes for the median party. 7 [START_REF] Riker | The Theory of Political Coalition[END_REF] introduced the idea of minimum winning coalitions (MWCs). [START_REF] Axelrod | Conflict of Interest. A Theory of Divergent Goals with Applications to Politics[END_REF] elaborated the notion of MWCs by focusing on connected minimum winning coalitions. A connected MWC includes all parties that are located between parties that are members of an MWC; even excluding them would leave the coalition with more than 50% of the vote. Since we focus on the range of positions of the most extreme parties of the MWC, the distinction is inconsequential for our research purposes.

8

The correlations between European integration, EU member and the interaction terms are relatively modest, namely 0.13, 0.68 and 0.55, respectively. Further, the correlation between the Trend variable and Years of EU constraints is 0.5, and between Three-party and Effective no. of parties is -0.48. The Appendix, which can be found on the EUP webpage, also contains the coefficients of the models excluding the interaction term. Most importantly, excluding the interaction term, the effect of European integration is negative and significant in all five models. 9

The Appendix can be found on the EUP webpage.

Figure 1

 1 Figure 1European integration and bargaining.

Figure 3

 3 Figure 3Bargaining and party policy positions.

  This paper has equal authorship and contains work in progress for Nanou's PhD (ESRC funded: PTA-030-2004-00215). Earlier versions of this paper were presented at the Political Economy seminar of the Departments of Government and Economics at the University of Essex, 7 February 2005, and at the Groningen workshop on Partisan Politics, Political Autonomy and Policy Harmonization across Europe, 19-20 May 2005. We would like to thank the participants at both seminars, with special thanks to Richard Berthoud, Jakob de Haan, Abhinay Muthoo, Thomas Plümper, Marian de Vooght and Hugh Ward.

  1

Table 1

 1 Range of minimum winning coalitions: an example

	Party	Vote (%)	Cumulative vote (%)	Position
	A	10	10	-10
	B	2 0	3 0	-3
	C	2 5	5 5	0
	D	1 0	6 5	1
	E	35	100	6

Table 2

 2 European integration and party policy convergence: GLS fixed-effects estimators

		(1)	(2)	(3)	(4)	(5)
		Range	Range_GOV	Range_MWC	Range_proEU	Range_antiEU
	Constant	4.9803	2.5490	1.4838	3.1878	3.0385
		(0.4432)***	(0.3992)***	(0.1993)***	(0.4772)***	(0.5875)***
	European integration	-0.3888	-0.3130	-0.0811	-0.9496	-0.1021
		(0.2648)	(0.1951)	(0.1454)	(0.2291)**	(0.3505)
	EU member	0.3809	1.0611	-0.2066	1.1395	-0.6238
		(0.2692)	(0.2000)***	(0.1232)*	(0.2250)***	(0.3307)*
	(EU member ϫ European integration)	-0.9329	-0.3165	-0.1890	-0.0549	-1.0923
		(0.2786)***	(0.2177)	(0.1450)	(0.2634)	(0.3721)***
	Years of EU constraints	-0.0177	-0.0142	-0.0103	-0.0296	-0.0019
		(0.0094)*	(0.0076)*	(0.0048)**	(0.0085)***	(0.0128)
	Three-party	-0.7610	-1.0054	-0.0748	0.1949	-0.7588
		(0.1648)***	(0.1290)***	(0.0829)	(0.1805)	(0.2143)***
	Effective no. of parties	0.4971	0.3638	0.2195	0.3751	0.4826
		(0.0616)***	(0.0545)***	(0.0296)***	(0.0540)***	(0.0924)***
	Population/1000	0.0426	-0.0561	-0.0000	-0.0684	0.0485
		(0.0154)***	(0.0157)***	(0.0061)	(0.0170)***	(0.0255)*
	GDP/1000	-0.1018	-0.0018	-0.0580	-0.0725	0.0548
		(0.0410)**	(0.0306)	(0.0159)***	(0.0337)**	(0.0470)
	Openness	-2.4436	0.2862	-0.4782	-0.8936	1.7596
		(0.3857)***	(0.3095)	(0.1884)**	(0.4073)**	(0.5070)***
	Trend	0.0596	-0.0061	0.0268	0.0953	-0.0548
		(0.0165)***	(0.0124)	(0.0070)***	(0.0151)**	(0.0207)***
	N (number of groups)	8559 (198)	8548 (198)	6544 (196)	7217 (198)	6993 (198)
	Wald x 2	19.12***	18.90***	9.95***	31.12***	13.49***
	Note: Robust standard errors in parentheses, * significant at 10%; ** significant at 5%; *** significant at 1%

European Union Politics 7(2)

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