Theresa May has called a snap general election for June 8, claiming that divisions at Westminster risked hampering the Brexit...
The move stunned Westminster, as Mrs May and Number 10 have repeatedly insisted she would not seek a general election before the scheduled 2020 poll.
But Mrs May, who has a fragile working majority of just 17 in the Commons, said she wanted "unity" at Westminster as talks on Brexit begin in earnest with the European Union.--18 April, 2017. The Telegraph.
"Bargaining power," "bargaining strength," "bargaining skill" suggest that the advantage goes to the powerful, the strong, or the skillful. It does, of course, if those qualities are defined to mean only that negotiations are won by those who win. But if the terms imply that it is an advantage to be more intelligent or more skilled in debate, or to have more financial resources, more physical strength, more military potency, or more ability to withstand losses, then the term does a disservice. These qualities are by no means universal advantages in bargaining situations; they often have a contrary value.--Thomas Schelling (1956) "An Essay on Bargaining," The American Economic Review, p. 282. [HT: Gijs Schumacher]
Theresa May is a seasoned politician, so I hesitate to suggest she made a strategic mistake if she called a snap election in the expectation that she would increase her majority in order to strengthen her bargaining position with the EU. Let's stipulate, for the sake of argument, that indeed, the Conservatives will greatly increase their majority. While parliamentary systems tend, all things being equal (which they rarely are), be less decisive in foreign policy (compared to a Presidential systems), a large party majority creates the possibility for effective, unified foreign policy in the British parliamentary system. In a large majority, the parliamentary whips can assure the passage of just about any controversial bill, while making sure that members in unsafe seats or with constituencies that are threatened by passage are protected or paid off with other goodies or some other form of logrolling. I do not mean to deny that small majorities can be effective in government by being cohesive, which occurs as long the MPs are scared off consequence(s) of defection. But if interests are not uniform or there is no external threat this is hard to pull off.
All of this has a funny consequence in a bargaining situation where one side (the UK) needs an agreed outcome with certain features (access to the common market, EU passport for financial institutions, etc) while the other, more powerful and larger side (EU) can afford to walk away from any agreement as long as it is seen to behave morally. In fact, no agreement would suit the EU fine, even at some cost, because it makes it clear to other restless, member states that exit comes at a price.* Of course, the larger side would prefer a mutual agreement (in which military cooperation, trade and citizens' movement/rights are secured). So, for the UK almost any agreement is going to be better (economically and financially) than no agreement (which really risks disrupting its economy), while for the EU a good agreement is better than no agreement, but a good many agreements are worse than no agreement.
Prior to the snap election, May's domestic weakness translated into a strategic asset in dealing with the EU. Because of her weak position in parliament, she could not afford to make many concessions. EU negotiators would know this and would have to take this into account. If the EU felt that negotiations could secure the minimally acceptable agreement, it would have an incentive not to be tough on May and to provide her with many face-saving measures and bargaining chips at home. Each time the EU would press May on some package deal, she could say, legitimately, 'look, I would like to bargain, but my hands are tied by the small majority.' Even if she did not fully believe this, she could "reduce the scope of [her] own authority" in order to strengthen her negotiation position (Schelling 1956: 286).** She would be like a driver without a steering wheel in a game of chicken. Moreover, May was not responsible for Cameron's decision to hold a referendum (and she campaigned gingerly on remain, after all). She could count on quite a bit of sympathy in Brussels for ameliorating a bad situation.
Let's turn to May's position after she wins -- again, let's stipulate -- a large majority (of, say, 100 seats). She looks secure in her majority, and many of the Conservative MPs owe their presence in parliament to her. The EU has a clear set of incentives to deny her a victory in negotiations (in order to prevent more internal defections; etc.), and so will press for concessions from the UK in the knowledge that the UK really needs an agreement more than the EU.+ This time, when real bargaining begins, May will present herself as a strong leader. The EU will remind her that strong leaders can make concessions if they serve strategic interests.
That is to say, prime minister May may well win a smashing victory in the June election and, thereby create for herself and the UK an unfavorable strategic bargaining position with the EU. So, while in an ideal world the EU undoubtedly would prefer a victory by a pro-EU party in the UK, it would not be too displeased by (and, perhaps, subtly increase the chances of) a big win for May. But this also increases the odds that Brexit will turn out to be harmful to all parties involved.
*I think this stance is a mistake in two ways: (i) the EU would be better off if certain illiberal states (e.g., Hungary, and increasingly Poland) were asked to leave; (ii) there should be an easier right to exit from the EU in accord with democratic self-determination; such a right would also create an incentive by the EU to behave better toward its own citizens and members.
**In context Schelling is describing self-commitment by union wage negotiators. But the logic of the situation is "similar;" for Schelling, a (2005) Nobel laureate who died this past year, goes on to describe an example of trade negotiations.
+Ideally, with a hostile Russia and increasingly unpredictable USA, the EU would prefer a warm partnership with the UK for military and economics reasons. But a full German re-armament -- in collaboration with France -- is increasingly likely.
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