It is often supposed that the European Union (EU) can be legitimated as a Pareto-improving bargain between its member states. This paper explores the assumptions of social choice and political philosophy that lie behind that claim. Starting out from a republican view that a polity needs to satisfy standards of non-arbitrariness if it is to be legitimate, the paper begins by explaining why ‘Coasian’ assumptions of Pareto improvement are so important to arguments for the continued indirect legitimacy of the EU by its member states. The paper then identifies four reasons from the social choice literature why attempts to follow a ‘Coasian’ pathway to Pareto improvement may fail to deliver forms of collective choice at the European level that are non-arbitrary from the point of view of all member state governments: non-neutral starting points, preference drift, indivisibilities, and multiple equilibria. These problems are, in turn, used to identify difficulties that mechanisms of indirect legitimation are likely to encounter in meeting two key conditions political philosophers specify for the non-arbitrary exercise of political power, namely, political justice and ‘democratic self-legislation’.
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