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Why do the wealthier European Union (EU) member states agree to make financial transfers to poorer members states? The traditional claim is that these transfers are a function of economic need (e g., regional poverty or weak agricultural sectors). Here I argue that they are actually a device to smooth the market integration process. That is, the more prointegrationist governments provide transfers as a side-payment in exchange for agreement to deeper levels of integration from the less integrationist governments To test this claim, I generate three propositions that relate the level of transfers to measures of how a chosen level of integration will affect a government's chances of reelection These propositions are tested empirically, controlling for the economic need argument The statistical results strongly support the claim that domestic political conditions influence transfer levels Thus, this result implies that the transfers do serve as side-payments to further the integration process
Clifford J. Carrubba (Thu,) studied this question.