Turkey and the European Union:
Problems and Prospects
Daedalos Institute of Geopolitics & University of Cyprus
Conference
Nicosia, 11 June 2009
***********
Credible Commitments:
An Elusive Quality in EU-Turkey Accession Negotiations
Mehmet Ugur
Jean Monnet Reader
European Political Economy
Plan
•
•
•
•
•
Open-ended accession negotiations: the
new beast
Modeling open-ended accession
negotiations: credibility matters!
Open-ended accession negotiations deliver
sub-optimal outcomes
Evidence from EU-Turkey negotiations
What is the way out?
1. Open-ended accession negotiations: the new beast
•
Open-ended accession negotiations framework: a new
commitment mechanism
•
Aims:
–
–
•
Ensure convergence between candidate country and the EU before
integration;
Reduce risks of enlargement – mainly for the EU
Instruments:
–
•
Economic and political reforms in candidate countries in return for a
membership prospect
Novelty:
–
–
•
Target time for accession is not specified
Accession may be granted with significant exemptions that restrict
membership entitlements of acceding countries
Rationale:
–
Avoid the end-game problem associated with pre-2004 accessions – i.e.,
reduce the risk of reform performance failures by candidate countries
2. Modeling open-ended accession negotiations:
credibility matters
Ingredients of the model: 3 choice variables for EU and Turkey
1.
Turkey’s choice variable: level of compliance with EU’s
reform conditionality (R)
2.
EU’s choice variable: membership prospect offered (M = 1/t
where t is number of years until possible accession)
3.
Choice variables for both parties:
–
–
Turkey’s probability of commitment to reforms (π)
EU’s probability of commitment to membership prospect (z)
2. Modeling open-ended accession negotiations:
credibility matters
The model: A stochastic (probabilistic) utility maximisation model
Both parties try to maximise the following objective functions.
UT  z ( BT ( R, M )   (1  z )CT ( R, M )
(1)
And
U EU  z ( BEU ( R, M )  z (1   )C EU ( R, M )
(2)
2. Modeling open-ended accession negotiations:
credibility matters
The model: A stochastic (probabilistic) utility maximisation model
To find utility-maximising levels of reform (R) and membership prospect
(M):
Take total differential of (1) and (2) and set equal to zero
Utility-maximisation occurs when:
zMBT   (1  z ) MC T
and
zMB EU  z (1   ) MC EU
Or
1 z
MC T
z
1

MC EU
MBT 
MB EU

(3)
Note: Marginal benefits of one
party depend on commitment
(4) probability of the opposite party!
In addition: Marginal benefits =
marginal costs only if π = z = ½
(see next slide)
(3' )
( 4' )
2. Modeling open-ended accession negotiations:
credibility matters
The model: A stochastic (probabilistic) utility maximisation model
Commitment probabilities drive a wedge between marginal benefits and
marginal costs.
Therefore, they cause deviations from optimal outcomes
MBT  MC T
if
MBT  MC T
if
MBT  MC T
if
1 z
 1 ; or
z
1 z
 1 ; or
z
1 z
 1 ; or
z
if
z  1/ 2
if
z  1/ 2
if
z  1/ 2
and
(5)
MB EU  MC EU
if
MB EU  MC EU
if
MB EU  MC EU
if
1

1

1 

 1 ; or
if
  1/ 2
 1 ; or
if
  1/ 2
 1 ; or
if
  1/ 2
3. Open-ended accession negotiations deliver suboptimal outcomes
Why sub-optimal outcomes? Because open-ended accession
negotiations generate perverse incentives such that:

Turkey sets its probability of commitment (π) at less than ½
And

EU sets its probability of commitment (z) at less than ½
Perverse incentives spelled out:
1.
2.
Perverse incentive I: an increase in own probability of
commitment has uncertain effect on own utility; but positive
effect on the opposite party’s utility (the positive externality
problem)
Perverse incentive II: an increase in own probability of
commitment reduces the incentive for the opposite party to
perform (i.e., R or M falls) (the free-riding problem)
3. Open-ended accession negotiations deliver suboptimal outcomes
Sub-optimal outcomes: a diagrammatical demonstration
Memebrship
Prospect (M = 1/t)
MBT = [(1-z)/z)] MCT
with z < 1/2
MBT = [(1-z)/z)] MCT
with z = 1/2
MBEU = [(1-π)/π)] MCEU
with π = 1/2
A
M*
MB
MC
MBEU = [(1-π)/π)] MCEU
with π < 1/2
B1
B2
π = Turkey’s probability of commitment
C
z = EU’s probability of commitment
RC RB1
RB2
R*
Reform (R)
EU and Turkey settles on Mc and Rc instead of M* and R*
4. Evidence from EU-Turkey accession negotiations

During the pre-accession period (2000-2004):




Turkish governments have undertaken 8 reforms packages,
including sensitive issues such as minority rights
Turkish public opinion support for EU membership has peaked at
71-74% in 2004
A new coalition of ownership for the integration project has
replaced the old coalition
Turkey-sceptic members (such as France, Germany, Austria)
failed to prevent the start of accession negotiations

After the start of open-ended accession negotiations in 2005:
Developments in Turkey




The level and quality of reform has fallen dramatically
AKP has taken a definite turn away from policy entrepreneurship
towards policy opportunism
New anti-democratic legislation has been introduced
Anti-democratic and corrupt government practices have
increased
4. Evidence from EU-Turkey accession negotiations

After the start of open-ended accession negotiations in 2005:
Developments in Turkey (continued …)




AKP government failed to extend the Additional Protocol to
Cyprus
Public opinion support for EU membership fell to 44% in 2006
and 42% in 2008
Turkish public opinion trust in EU institutions is the lowest
among EU-27 + other candidates
Governance quality in Turkey has deteriorated or remained
stagnant (and below income group average)
4. Evidence from EU-Turkey accession negotiations

After the start of open-ended accession negotiations in 2005:
Developments in the EU






Turkey’s membership prospect has deteriorated dramatically
So far, only 9 chapters have been opened – but none of these
can be closed
In contrast, 13 chapters have been frozen (8 related to the nonimplementation of the additional protocol and 5 related to
membership)
France, Germany and Austria have become more vocal and
influential vis-a-vis the majority view in the EU
European public opinion support for Turkish membership is very
low – only 39% of respondents to a 2006 Eurobarometer survey
think Turkey should become a member even if it complies with
all EU conditions
Pro-Turkish membership members have become less vocal in
their support
5. Is there a way out?
Open-ended accession negotiations create such an environment that:

Turkey’s reform performance becomes a function of EU’s
commitment probability

Membership prospect offered by the EU becomes a function of
Turkey’s commitment probability

Unilateral action by either party (unilateral increase in Reform or in
Membership Prospect) does not lead to movement towards optimal
equilibrium – hence it is neither feasible nor sustainable.

Therefore both parties must coordinate their commitment
probabilities (π and z).

This can be done through periodic summits

Then, any deviation from optimal reform (R*) and membership
prospect (M*) can be rectified by adjustment of commitment
probabilities.