Exchanging and voting in the Council:: endogenizing the spatial model of legislative politics

We present a new model of Council decision-making which attempts to reflect the political processes inside the Council more accurately. For the analysis of EU legislative decision-making we propose a two-stage exchange model assuming that actors know the outcome of the spatial model in which the Commission makes a proposal requiring the support of a qualified majority of member states in the consultation procedure. Our model assumes that member states consider this outcome as the reference point for making exchange efforts to find a more acceptable solution. The model suggests that member states can exclude the Commission and exchange resources which control the outcome of the proposal's issues, as long as the exchange solution promises a more beneficial outcome than the spatial model does. The empirical analysis applies the spatial model in the two-dimensional policy of the Honey directive and illustrates the differences to our two-stage exchange model. In addition to taking a closer look at decision-making inside the Council, we believe that our two-stage model can provide further insight into the process by determining the value of the issues, the power of the actors and their demand and supply in the control of issue outcomes. The analysis reveals that all member states profit from the exchange solution which is also located close to the outcome.