Institutional Innovations in the Common Agricultural Policy: A Theoretical Approach based on Legitimacy

Abstract

The Common Agricultural Policy (CAP) of the European Union (EU) has been highly political and social controversy, within the EU as well as at international level. However, the reforms on the institutional structure have not been frequently analysed. This paper, based on the Institutional Innovation Theory, examines the role of different exogenous and endogenous factors which have been boosted or slowed down, the five CAP reforms. According to these factors we analyse three key issues in the EU general political system, two topics in the EU domestic-economic system and the external pressures. Later, these factors are considered on a theoretical approach applying investment theory and expected utility maximization by means of the net present value model and dependency relations. The main results show that role played by the EU institutional structure is fundamental as a limited factor, and the external pressures and citizen’s acceptance of this policy are an important boost factor.