State Formation and Nation-Building Versus the Segmented Polity

A crucial element in Rokkan’s scheme that Bartolini adopts is the relationship between boundary control and internal polity structuring. Bartolini presents this as follows:

State formation and nation-building take place within a two-dimensional – territorial–functional – space, where the territorial dimension unfolds along center-periphery lines and the functional along the dimensions of force, law, culture, and economy. The core idea is that a complete instance of state formation and nation-building would be one where the political center that is formed is capable of controlling the territory (the peripheries) along all four functional dimensions: force, law, culture, and economy. Rokkan’s scheme was devised to show that this was rarely the case; Europe was marked by significant variations in central control.Footnote ⁷

The key stages in state formation and nation-building are penetration, standardization, participation, and redistribution (Flora et al., Reference Flora, Kuhnle and Urwin1999: 83):

1. 1. Penetration: state formation strictu sensu involves the rise of institutions for the extraction of resources for common defence, for the maintenance of internal order, and the adjudication of disputes; political, economic, and cultural unification at the elite level.

2. 2. Standardization: nation-building involves the rise of conscript armies, compulsory schools, mass media, creating channels for direct contact between the central elite and parochial populations of the peripheries.

3. 3. Equalization of rights of participation and the establishment of political citizenship involves the establishment of privileges of opposition, extension of the electorates for organs of representation, formation of organized parties, bringing subject masses into active participation.

4. 4. Redistribution of resources/benefits and the establishment of social citizenship includes the growth of public welfare services, development of nation-wide policies for the equalization of economic conditions through transfers and progressive taxation.

A modern segmented polity as depicted in this Element differs from a modern type of territorially sovereign state along all four of Rokkan’s stages. That is clearly reflected in Table 1. First, with regard to penetration, it is marked by a weak political center only capable of partial and functionally delimited territorial control. The segmented polity is by its member states structurally barred from the resources that a sovereign state has over its territory. Its involvement in so-called core state powers such as military, police, and taxing power (Genschel and Jachtenfuchs, Reference Genschel and Jachtenfuchs2014) would be confined to coordination, because the segmented polity would not be granted exclusive power to control territory across all functional realms, as is a hallmark of the sovereign state. A segmented polity is de jure and de facto barred from effectively claiming monopoly on the legitimate use of force within a territory.

Table 1Comparing Nation-States and Segmented Polities

Table 1 long description.

Table 1 Long description

The table has been constructed on the basis of Rokkan’s (1970) different stages of state formation and nation-building, and it compares each with what we expect from a segmented polity.

Second, a segmented polity standardizes a territory less than a fully-fledged state. In the context of nation-building, this refers to the incorporation of citizens and subject regions into the political system and through that process the forging of a unified nation and national identity. In contrast, a segmented polity intervenes in and activates only select portions of the societies of the member states and defines them in terms of the prevailing segmental logic (in a marketized polity as market actors or market citizens). It follows that a segmented polity’s ability to enforce standardization will be patchy and mainly confined to the core sector(s) that constitute the polity.

Third, a segmented polity grants fewer rights than a fully-fledged modern territorial state. In the state formation and nation-building context, equalization of rights of participation and the establishment of political citizenship refer to the development and entrenching of a civil society of rights-holders. The segmented polity also reaches into society and has a social constituency, but this is far looser, less institutionalized and more horizontal (across subunits) than in a state-based civil society. In this Element, we associate civil society with the nation-state and social constituency with a segmented polity. Segmented polities may confer rights on citizens and organizations, but these will be function-specific in contrast to the nation-state that issues rights along all basic realms: civil, political, social, economic, and cultural.

Finally, a segmented polity has far fewer resources and therefore more limited ability to redistribute them than a full-fledged state. Whereas the modern nation-state is based on redistribution, social citizenship and public welfare systems, the segmented polity’s limited autonomous access to resources means that its ability to ensure any form of redistribution is constrained and contained.

The System of States Versus the Segmented Polity

Rokkan’s focus was on the development of the nation-state and patterns and processes of democratization across Europe. His endeavor was aimed at understanding patterns of difference and divergence from Talcott Parsons’ (Reference Parsons1951) theory of differentiation, with Rokkan’s adaptation particularly stressing territorial and functional dimensions. Rokkan’s approach has been labeled as one of encompassing comparison, which “places different instances at various locations within the same system, on the way to explaining their characteristics as a function of their varying relationships to the system as a whole” (Tilly, Reference Tilly1984: 83; see also Fossum, Reference Fossum2006). The large structure is Europe’s political, cultural, and socioeconomic development, with emphasis on the nation-state and its democratization. Rokkan did not study state formation and nation-building as a set of distinct and isolated cases but tried to establish and map these processes within a single interdependent system, which was Europe. State formation and nation-building as seen earlier were disaggregated into territorial and functional dimensions and understood as unfolding along four distinct stages.

In the depiction of Europe, Rokkan mapped structures and conditions on certain key dimensions and variables. Since the mapping covered long periods of time, it was difficult to incorporate how the states as entities interacted at various points in time. How the state system constrained and conditioned states was also affected by the approach to disaggregate states. Since Rokkan was particularly interested in mapping the diversity of Europe (Flora et al., Reference Flora, Kuhnle and Urwin1999), his state-disaggregating approach did not (or perhaps could not) include a reaggregating thrust. The implication was a lack of attention to the isomorphic pressures that are embedded in the system of states.

We approach state systemic isomorphic pressures from blending sociological institutionalism and liberal theories of IR, notably the English School with reference to Hedley Bull’s notion of international society as a society of states. Bull (Reference Bull1977) underlined that modern states regarded themselves as bound by a shared set of rules and norms, including respecting each other’s independence. Robert Jackson (Reference Jackson2000: 6) introduces the notion of the global covenant of states, outlines its core principles centered around the core tenet of state sovereignty and notes that “(w)orld politics is constitutively normative: it incorporates its own distinctive ethics which have been worked out over time by statespeople.” This ethics and the principles of statecraft that are shared among statespeople (those responsible for operating and running states and their staffs) are together with a distinct statist vocabulary and state institutions powerful sources of isomorphic pressures and dynamics – along coercive, mimetic, and normative lines (DiMaggio and Powell, Reference Dimaggio and Powell1983; Powell and DiMaggio, Reference Powell and DiMaggio1991). Isomorphic pressures operate on state-internal, as well as inter-state dynamics.

State sovereignty is the key constitutive principle for the modern society of states (Jackson, Reference Jackson2000). It gives normative bridging-power to the significant variations in stateness (Nettl, Reference Nettl1968) that mark the state system. This implies that the different isomorphic pressures may vary in strength and intensity. Thus, despite significant variations in coercive and mimetic pressures, actors have resort to a coherent conceptual vocabulary associated with the sovereign state to fill in the empirical gaps they observe between formal sovereignty and actual state power and autonomy. Bridging-power emanates from the principle of state sovereignty being encoded in the law of the peoples, which provides criteria for recognizing what constitutes a state and the rights and obligations that accompany this status. The system of states has long exerted a powerful isomorphic pressure on would-be contenders (Spruyt, Reference Spruyt1994), but as current developments show, these pressures are geographically uneven, and alternatives coexist (Osiander, 2001; Fossum, Reference Fossum2006; Olsen, Reference Olsen2010; Bátora and Hynek, Reference Bátora and Hynek2014). The rise of alternatives such as the EU contributes to transform the statist building-blocks. Nevertheless, rather than neat and clear patterns, complex patchworks may emerge.

From these observations we posit that the nature and scope of polity formation above the states depends on at least three sets of factors. The first is a distinct state systemic opening to polity formation beyond the state, which occurs when there is a serious weakening or even suspension of state systemic isomorphic pressures during temporally specific critical junctures. Second, actors that are willing and able to forge a new entity. These are typically supranational entrepreneurs (Haas, Reference 83Haas1958[2004]) but can also include state officials who see the merits in cooperative arrangements above the states (Lindberg, Reference Lindberg1963), or that lack resort to state sovereignty as a viable way forward. Integration includes societal actors as well as external benevolent hegemonic states (the US in the EU case). Third is when pressing policy problems undermine state capacity to address them internally, generating need for binding collaboration. The mix of these helps account for the scope of new polity formation: The greater the systemic opening, the more powerful the entrepreneurs, and the more pressing the policy problems, the more comprehensive supranational polity formation is likely to evolve. This set of factors underline that segmentation is a process, and it is only under certain more specific conditions that segmented polities will emerge.

To sum up thus far, compared to a full-fledged political system such as a sovereign nation-state, a segmented polity is a supranational entity equipped with binding authority in a limited policy area; thus, partial in functional terms, and constrained by the members. As a supranational aberration from the state form, it is normatively and politically contested. Some of this will rhyme with premodern heteronomy. But whereas in the premodern world, segmented polities prevailed, there was no clear distinction between polity and political order since political systems were commingled and overlapping. That is not the case in today’s world because segmented polities are mere partial escapes from the world of states. As an entity, a segmented polity is not only different from a state but also from an IO. The latter derives from and has been entirely adapted to the modern system of states. By contrast, segmented polities deviate from states by unbundling territoriality (Ruggie, Reference Ruggie1993) or unbundling established state-based patterns of authority by “new forms of authority being created beyond the state” (Ansell and Di Palma, Reference Ansell and Di Palma2004: 7). As a process, segmentation differs from state formation seen as a process of (functionally differentiated) integration along all functional domains across a specific territory (territorial closure) run from a political center. Segmented polity formation represents the establishment of a poly-centric system of governing through functionally selective integration under normative and material constraints. Segmentation occurs foremostly as a distinct form of stymied, biased, or partial integration that solidifies within legally binding institutional arrangements in particular policy domains, or sectors.

The development of a segmented polity cannot draw on the same dynamic processes and amassing of power and capabilities that are involved in state formation. Whereas some of the elements – in a partial and incomplete manner – are involved, there is no reason to assume a similar sequence of developments as those four stages depicted by Rokkan or that functional dynamics will reinforce each other over time, as is associated with state formation and nation-building.

Neofunctionalism

The most prominent theory that has been associated with European integration is neofunctionalism, which is heavily influenced by pluralism and functionalism (Hooghe and Marks, Reference Hooghe and Marks2019: 1114) and is notably associated with the works of Ernst Haas (Reference 83Haas1958[2004], Reference Haas1961), Leon Lindberg and Stuart Scheingold (Reference Lindberg and Scheingold1971), Arne Niemann et al. (Reference Niemann, Lefkofridi, Schmitter, Wiener, Börzel and Risse2019), and Phillippe Schmitter (Reference Schmitter1969, Reference Schmitter1970, Reference Schmitter2002). Integration can be defined as “the process whereby political actors in several distinct national settings are persuaded to shift their loyalties, expectations, and activities toward a new and larger political center, whose institutions demand jurisdiction over the pre-existing national states” (Haas, Reference Haas1961: 366–367). Haas’ notion of integration is focused on polity formation and how such a process fosters unity and reduces subunit distinctness. Neofunctionalism “developed the idea that government could be disaggregated into its component group actors. Instead of making assumptions about the interests of states, as classical realists had done, neofunctionalists conceptualize the state as an arena in which societal actors operate to realize their interests” (Hooghe and Marks, Reference Hooghe and Marks2019: 1114). Neofunctionalism is heavily skewed toward process and posits that the establishment of supranational institutions can develop its own integrationist dynamics, not only in functional but also political and social terms. The process of integration is intended to foster a new political community, which is defined as follows, where: “(p)olitical community … is a condition in which specific groups and individuals show more loyalty to their central political institutions than to any other political authority, in a specific period of time and in a definable geographic space” (Haas, Reference 83Haas1958[2004]: 5, italics in original).

A key dynamic that drives integration in this theory is “spillover,” which is depicted as

The presumption is that the process starts with functional and moves on to political integration, which constitutes political spillover. This is supported by supranational institution-building, and supranational organizations mobilizing societal actors to challenge and sideline the member states (Haas, Reference 83Haas1958[2004]); thus, including political spillover and eventual regime change. The underlying assumption is that actors are self-interested and (boundedly) rational, albeit capable of learning and changing their preferences, but this takes place in a context akin to integrationist path dependence.

Segmented polity formation benefits from functional dynamics but underlines their limited reach and conditional nature. That is in line with Haas’ later work (Reference Haas1975) and that of his collaborators (Lindberg and Scheingold, Reference Lindberg and Scheingold1971) who came to recognize that functional integration is not automatic, and that various obstacles are preventing a moving to full-scale political integration. A theory of segmented polity formation underlines that political center formation is limited in scope, so that the supranational entity is not only functionally biased and confined but also marked by a distinct sectoral logic (for the EU this has been marketization). The theory of segmented polity formation underlines that supranational polity formation only occurs when state system isomorphic forces are profoundly weakened so that narrow windows of opportunity for supranational polity formation open up. Such windows are typically not wide-open but are likely to occur when systemic forces exert least consistent pressure.

Supranational polity formation is thus lop-sided and biased from the outset. Constraints instituted by member states reinforce built-in biases, especially as the state system is restored as has happened in Europe. Supranational polity formation creates loyalty through socialization dynamics within the governing system albeit with limited social reference. To put it differently, loyalty and socialization patterns are stronger within the governing system than within the subject populations. This relates to how the segmented polity reaches into the societies of the member states: selectively and foremostly within the functional realm(s) that are constitutive for the supranational polity. For the EU that means that European identity has stronger affinities with Laura Cram’s notion of banal Europeanism than with national identity. Banal Europeanism rests on four key tenets:

Cram’s notion underlines the distinct dynamics that occur when functional integration is polity constitutive: It shapes people’s values and affinities not through a clear institutional shift from functional to political integration but more subtly and less auspiciously – through lived practice. Neofunctionalism’s reliance on soft rational choice (Haas, Reference 83Haas1958[2004]) renders it largely inattentive to the subtle identitarian implications of the EU’s lopsided institutional arrangement.

Intergovernmentalism

Intergovernmentalism is steeped in political realism, which understands the state as the core political unit; states are power seekers whose relations are structured by power balancing under conditions of international anarchy (understood not as lawlessness but as absence of organized and binding supranational power) (Morgenthau, Reference Morgenthau1978). Within the EU context, we find several versions of intergovernmentalism, with Stanley Hoffmann’s (Reference Hoffmann and Hoffmann1966) the closest to traditional realism, and Andrew Moravcsik’s (Reference Moravcsik1998) liberal intergovernmentalism as an attempt to blend realism and liberal IR theory. Moravcsik argues that “EU integration can best be understood as a series of rational choices made by national leaders. These choices responded to constraints and opportunities stemming from the issue-specific societal … interests of powerful domestic constituents, the relative power of states stemming from asymmetrical interdependence, and the role of institutions in bolstering the credibility of interstate commitments” (Moravcsik, Reference Moravcsik1998: 18). Institutions emanate as responses to cooperation problems, and “the level of integration that entails will vary with the nature of the cooperation problem” (Hooghe and Marks, Reference Hooghe and Marks2019: 1116).

Classical realist intergovernmentalism associated with Hoffmann (Reference Hoffmann and Hoffmann1966) distinguishes between high and low politics, so that integration proceeds and stabilizes in low politics areas but not in high politics areas. This insight resonates with new intergovernmentalism’s integration paradox: The EU’s realm of action has expanded but this has taken place in the absence of a commensurate transfer of powers and competences to the EU’s supranational institutions (Bickerton et al., Reference Bickerton, Hodson and Puetter2015; Puetter, Reference Puetter2014).

Liberal intergovernmentalism is steeped in rational choice theorizing, seeing actors as cognizant of and pursuing their interests, and institutions reflecting actors’ intentions and/or compromises between contending interests. The theory of segmented polity formation is highly attentive to the constraints on integration that intergovernmentalism points to but understands these differently from how liberal intergovernmentalism presents them because it has a different conception of the EU qua polity. Even if liberal intergovernmentalism acknowledges that EU institutions are not mere creatures of the member states, it does not pay sufficient heed to how the EU institutions are embedded in the member states, which Wolfgang Wessels (Reference Wessels1997) refers to as fusion. Egeberg and Trondal (Reference Egeberg and Trondal2009) point to similar dynamics of interweaving of levels of governing through their notion of two-hatted agencies (catering to the EU and to their respective nation-states), although their argument is based on organization theory. This inter-imbrication of levels is suggestive of how a segmented polity is a form of supranationalism subverted, and the special effects we get from the fact that the internal market is polity constitutive.

That the market is polity constitutive has bearings on the distinction between high and low politics that figures so centrally in intergovernmental thought. Moravcsik (Reference Moravcsik2002) posits that EU internal market integration is a matter of low salience integration, because it takes place foremostly in areas of legislative and regulatory activity that are farthest away from the minds of the voters. But when the internal market is constitutive for the polity then market integrity is not an economic, functional, or low salience issue; it is of vital importance for EU sustenance. We saw that clearly exhibited during Brexit, with the EU insisting that the four freedoms sustaining the internal market were indivisible (Laffan, Reference Laffan2022).Footnote ⁹ The broader point is that the political salience that the high–low distinction is based on is difficult to pin down, since policy areas wax and wane in salience. An obvious case is energy: In the 1970s, after the initial Organization of Arabic Oil Producing Countries (OAPEC) launched the oil embargo, oil became considered a high politics issue, since states became concerned with security of supply. From the early 1980s and up until recently oil policy has been depoliticized and considered a low salience matter for the market to regulate (Fossum, Reference 82Fossum1997). When Russia invaded Ukraine in 2022, oil again became politicized and considered an issue of high political salience. This suggests that issues or policy areas change salience insofar as they become politically important and linked to core state concerns such as security of supply. In today’s world security is becoming a more overarching concern that works its way across policy sectors, as is reflected in rising concerns with economic security.Footnote ¹⁰ There is no doubt that policy areas vary in terms of how central they are to polity sustenance, but this is not static and varies with type of polity and domestic and global contexts.

A further question is whether high vs. low policy salience effectively distinguishes policy domains. Even among those policy domains that (liberal) intergovernmentalists label as having low salience there are different sectoral logics, and their contents may be ideologically driven. Economic or market issues have mostly been considered as having low salience, but socially dis-embedding markets can spur politicization, and the same can a move toward mercantilism. In these two cases, the sociopolitical dynamics are very different, and the same applies to political and polity dynamics and their implications.

Multilevel Governance

This notion was introduced by Gary Marks (Reference Marks and Sbragia1992) and represented a plea to shift attention from neofunctionalism’s and intergovernmentalism’s focus on the conditions for and dynamics of integration to the nature of European governing and those involved in it not only at the EU and national levels, but also at the subnational (regional and local) level (for a brief selection, see Börzel, Reference Börzel, Benz, Broschek and Lederer2021; Hooghe and Marks, Reference Hooghe and Marks2016; Marks et al., Reference Marks, Nielsen and Ray1996; Marks et al., Reference Marks, Hooghe and Schekel2008). This turn to MLG also marks an important disciplinary shift in the analysis of the EU, from a debate mainly conducted within rationalism-inspired IR subdisciplines to comparative and domestic politics perspectives with a stronger institutionalist and constructivist orientation.

Simona Piattoni (Reference Piattoni2010) identifies three core elements of this shift to MLG, which she labels political mobilization by the involvement of regional officials and nongovernmental organizations in EU policy and decision-making, policymaking, or how the EU actually governs, and polity structuring, with emphasis on multilevel and state-society dynamics.

A key point of MLG is to show how polities have transformed from the hierarchical and territorially based nation-state to more complex and less hierarchical systems composed of multiple levels with overlapping competencies and political interaction across levels, across the public–private, and across the national–international divide (Bache and Flinders, Reference Bache and Flinders2004; Enderlein et al., Reference Enderlein, Wälti and Zürn2010; Marks et al., Reference Marks, Nielsen and Ray1996; Piattoni, Reference Piattoni2010). These traits of MLG systems appear to resonate with a theory of segmented polity precisely because both are marked by interactions across levels of governance, including relations among political principals, coordination among public administrators, and public–private interactions.

Our notion of segmented polity, however, places more emphasis on state systemic resilience due to various isomorphic pressures. Having said that, our constructivism makes us acknowledge important differences in the forms of isomorphism at play. We posit that normative isomorphism is likely to exert stronger systemic pressures than for instance mimetic. That helps to account for the magnitude of state transformation that MLG points to and why this is not uniformly recognized. Epistemology and ontology are out of synch, not least due to the continued embrace of state sovereignty and how that in turn influences the debate on democracy. Normative isomorphism also accounts for the way in which a supranational polity such as the EU turns to state-centered language to legitimate itself (parliament, court, European (aka national) anthem, European (aka national) hymn) even if these terms are applied to EU arrangements that in important ways deviate from their namesakes in states.

There are two approaches to MLG in the extant literature. Lisbeth Hooghe and Marks (Reference Hooghe and Marks2003) distinguish between MLG I, which consists in general-purpose jurisdictions, and MLG II, which consists in limited-purpose jurisdictions. The former is generally associated with federal states, whereas the latter is indicative of state transformation dynamics. The distinction also appears to map onto the EU as a composite of two governing modes (supranational and intergovernmental, for more on this, see Section 4). Whereas the supranational component appears similar to a general-purpose jurisdiction, it is significantly constrained in capacity and resource terms and is therefore a supranationalism constrained. In addition, the segmented polity is marked by a distinct logic (in the EU case marketization), and as such is imbued with built-in policy, decision-making, and learning biases. Further, a hallmark of segmented polities is that they are contested. The MLG literature does not theorize polity contestation as a hallmark of multilevel systems of governing. That may also be because this body of literature is focused on policy processes and actor-level dynamics, and is not as attuned to issues of power, political order, and legitimacy (Keating, Reference Keating2017), as are essential elements in a theory of segmented polity. In Section 3, we underline the democratic and legitimacy defects of the segmented polity.

Thus, many features that are highlighted by the MLG literature are also reflected in the segmented polity, but the segmented polity is a more precise and narrowly cut rendition than is MLG. It can serve as both a theory and a research program. A hallmark of the segmented polity is its uneven constitution – only one broadly based policy area is constitutive of the polity at the supranational level.

Post-functionalism

Post-functionalism was initially formulated by Hooghe and Marks (Reference Hooghe and Marks2009) and can be said to have some of its roots in MLG as well as in studies of public opinion, political parties, and elections. Post-functionalism thus has more in common with Rokkan’s and Bartolini’s comparative politics approach and concern with democracy than with neofunctionalism and intergovernmentalism, both of which are steeped in the field of IR. Post-functionalism stresses the important role of identities and ideologies in shaping politics and is particularly concerned with how these issues play out within the EU’s member states. It underlines how a largely functionally driven integration logic challenges the societal cohesion that mark societies with exclusive identities (Hooghe and Marks, Reference Hooghe and Marks2019). The authors importantly observed the transition Europe underwent from permissive consensus to constraining dissensus (Hooghe and Marks, Reference Hooghe and Marks2009). We can detect a certain recursiveness in how post-functionalism underlines how European integration shapes and conditions domestic societies and that the societal reactions in turn profoundly affect the way the EU works. The upshot is that post-functionalism is more of a theory of the constraints on integration than an integration theory as such.

Post-functionalism’s emphasis on domestic constraints on integration sit well with the notion of segmented polity one of whose hallmarks is built-in constraints on integration. Post-functionalism underlines the need to understand how the segmented polity intervenes in and inveigles into the societies of the member states.

One possible difference is the role and status of constraints. Post-functionalism underlines popular consent and cleavage structures, whereas the notion of segmented polity sees built-in constraints as part of the “original sin” or as intrinsic to the genetic soup from which the EU emanated. In that sense, the theory of segmented polity would underline the inherent tension in an essentially political project that is compelled to draw overly heavily on law and functional logics. This tension has taken different manifestations over time, and post-functionalism offers important contributions to Europe’s current malaise.

Post-functionalism is the theory that is most explicit on the social support and legitimacy dimension of the European integration process. Since the financial crisis struck and raised the question of the EU’s continued survival a body of literature on EU disintegration has emerged (see for instance Jones, Reference Jones2018; Vollaard, Reference 89Vollaard2014, Reference Vollaard2018; Webber, Reference Webber2014, Reference Webber2018; Zielonka, Reference Zielonka2014). Douglas Webber, for instance, sides with post-functionalism in that the main IR-based theories do not take sufficient heed of the domestic societies of the member states. Further,

German reorientation would seriously weaken or even undermine the EU. We have underlined the role of weakened state systemic isomorphism as a condition for supranational polity formation. Strong states such as Germany are far more important determinants for state systemic isomorphism than small states; hence what Germany does can have systemic implications for Europe.

Segments and Segmentation Dynamics in the Modern World

The concept of segment in the modern world of states is typically understood and analyzed as a meso-level phenomenon. It has been depicted as a durable configuration of linkages among policy participants who share common interpretive frameworks regarding policy problems, solutions, consequences, and decision-making arenas (Christensen and Egeberg, Reference Christensen and Egeberg1979). This conceptualization builds on earlier theoretical models of decision-making under conditions of ambiguity – most notably the “garbage can” model of organized anarchies (Cohen et al., Reference Cohen, March and Olsen1972) – where decisions emerge from loosely coupled streams of problems, solutions, and decision opportunities. Segments do not simply emerge and develop in loosely coupled systems. Segments can become institutionalized and pattern and routinize these streams, producing recurrent and replicable configurations of engagement; hence being part of more tightly coupled systems. They then give rise to relatively coherent actor constellations within specific policy domains, comprised of governmental, private, and civil society actors who mobilize particular, often path-dependent, problem frames and policy instruments. These formations facilitate policy efficiency within the segment by reducing uncertainty and complexity in decision-making and by mobilizing attention and resources toward within-segment problems, solutions, and consequences. However, they also engender epistemic closure and path dependency, narrowing the policy discourse and foreclosing alternative courses of action (Bátora and Fossum, Reference Bátora and Fossum2020; Fossum, Reference Fossum, Bátora and Fossum2020).

Analogous to segments within nation-states are iron triangles, where for instance in the context of defense contracting, defense firms, legislative committees, and executive agencies form stable and mutually reinforcing policy subsystems (Adams, Reference Adams1981). These formations often include mechanisms for interest aggregation and mobilization, such as cultivating supportive constituencies to reinforce specific policy trajectories. But whatever their affinity to segment, they operate at the meso level and are therefore distinct from segmented polities.

Hugh Heclo (Reference Heclo and King1978) identified similar patterns as those observed in iron triangles in his notion of “issue networks” or “intermediary issue-conscious groups” that mediate state–society relations in complex policy environments. While related, the concept of segment emphasizes the cognitive and institutional structuring of the policy process – highlighting how specific configurations of problems, solutions, and decision venues become sedimented and reproduced over time.

From Meso to Macro Level: The Segmented Polity

Within the modern state context, segments, iron triangles, and issue networks are typically phenomena at the meso level. Segmented polity formation – moving from meso level to macro level –implies either moving back in time to premodern times when heteronomy enabled segmented polities to exist or somehow moving beyond the modern state. In today’s world of complex interdependence there is considerable state transformation but there is no indication of wholescale transition away from the system of states. Segmented polity formation therefore takes place within the broader ambit of the state system. Special conditions must exist for such a process to take place. That was the case in Europe in the post-war period, as will be spelled out in Section 4.

The Element underlines that the only real example of segmented polity formation in today’s world is the EU. The EU has sufficient institutional and legal clout to issue authoritative decisions at the supranational level but lacks the coercive capabilities that we associate with the modern sovereign state. Comparing the EU with a state of comparable population size, we see that the EU is on a par in economic terms but not in terms of political or military clout.

A segmented polity emerges when one functional subsystem solidifies and becomes defining for the new polity. This may appear an awkward duality: A segment that we normally associate with a networked policy area becomes a defining feature of the new political system. Such a move from meso to macro is only possible through significant institutionalization. The segmented polity emerges through a process of polity formation, in other words the establishment of a legally based institutional system. Haas defined integration (in Section 2) as “the process whereby political actors in several distinct national settings are persuaded to shift their loyalties, expectations, and activities toward a new and larger political center, whose institutions demand jurisdiction over the pre-existing national states” (Haas, Reference Haas1961: 366–367). Such a process entails center formation and consolidation, with the center developing the requisite capacities to demand jurisdiction over the preexisting national states. The segmented polity develops a political center with a set of institutions capable of effectuating binding decisions on the member states. But the center is weak in the sense that its claim to jurisdiction is limited to one major policy area, which does not unleash the capabilities we associate with the state. Further integration across other policy areas carries with it the logic of the dominant segment. In other words, when the dominant segment or the polity constitutive segment is the market, the market logic is imprinted on attempts to integrate in health, education, culture, and so on. Integration is in this context amplification of bias, not development of competence to control and govern policymaking in other policy areas that is sufficiently tailored to the prevailing logic within each other policy area.

Competencies and Constraints

A segmented polity is imbued with a set of distinct competencies normally conferred on it by its constituent member states and their citizens. This enables policy coordination and public problem-solving that the constituent entities (the member states) have accepted as binding within a limited number of functional realms. In comparison to a state, a segmented polity is normatively, structurally, and materially constrained. A further systemic constraint in comparison to a nation-state is that a segmented polity does not contain all functional areas that does a nation-state. A segmented polity is functionally speaking uneven and biased, and the policy areas are accordingly unevenly distributed and institutionalized.

A segmented polity consists of institutions that have the capacity and competence to reach authoritative decisions that are binding on the member states, their civil society organizations, and their citizens. How independent these institutions are from the member states depends on how well entrenched the segmented polity is in terms of competence, capacity, and social support. A segmented polity – in contrast to an IO – can make authoritative decisions and allocations independently of the member states (and thus fulfills a key parameter characterizing a political system in Easton’s sense). Nevertheless, when compared to a state, a segmented polity is constrained in several ways.

First, as depicted in Figure 1, a segmented polity is functionally delimited but not territorially delimited in the same way as we would expect from a sovereign state. A segmented polity is not equipped with a monopoly on the legitimate means of violence and therefore does not possess the means of coercion and exclusive territorial control that the modern territorial state possesses. Further, whereas the segmented polity can make authoritative decisions, it is also constrained by relying on subunits for policy implementation, which often is the national public administrations. That implies that a segmented polity, especially in so-called core state powers realms (Genschel and Jachtenfuchs, Reference Genschel and Jachtenfuchs2014), relies on, repurposes, and coordinates existing subunit capacities rather than develops its own.

Second, a segmented polity’s policy thrust is partial and selective by existing and operating in a pronounced manner in some issue areas only. Segmented polities will therefore exhibit significant variations in governing ability across issue areas and governing arrangements. This built-in bias has systemic implications. It means that the segmented polity’s policy thrust is particularly salient in a limited range of policy fields. Insofar as the segment extends into other realms of action these forays will bear the mark of the logic that prevails in the dominant segment. For the EU, this means a strong marketization thrust penetrating into such policy areas as for instance education, health, climate, and social welfare (Bartl, Reference Bartl2015).

Third, since a segmented polity is partial and selective this will also be reflected in its policy style (for this term, see Richardson, Reference 87Richardson1982). The fact that the system is partial and selective in functional terms and that it faces capability constraints, has bearings on the nature and range of policy instruments. We can expect policy instruments to be designed to serve the needs of specific segments rather than be multipurpose and readily adaptive across all policy fields. This does not mean that segmented polities develop distinct policy instruments but rather that they shape and condition those policy instruments that are acceptable, how policy instruments are used, and whether policy instruments are bundled together. We can expect that the type and range of policy instruments are tailored to the resources and constraints that a segmented polity faces. Given the segmented polity’s built-in resource constraints, policy instruments tailored to regulation are far more likely than policy instruments tailored to (re)distribution because the latter require far more direct access to resources embedded in states. Further, since policy instruments are devised according to segment-specific needs, there may be challenges associated with applying policy instruments designed for one segment in other segments.

The segmented polity is contested because it is a product of contending visions and worldviews that have not been reconciled. A further reason for its contested nature stems from the continued strength of normative isomorphic pressures from the state system that the segmented polity coexists with. To obtain legitimacy, it both seeks to emulate statist terminology and organizational forms and at the same time must contrast and distance itself from the nation-state so as not to appear as a competitor to it.

The Societal Dimension

A segmented polity – in contrast to an IO – reaches into the societies of the member states, and in so doing, redefines societal actors’ relations to their respective states. The basic mechanisms can be grouped under the headings of intervention, activation, and exclusion. The segmented polity intervenes in the societies of the member states and regulates their affairs. This is done in a selective fashion because it takes place within the issue area that the segment spans across and is thus particularly inclusive vis-à-vis those parts of society and those societal groups that the segment targets. If the segmented polity is foremostly embedded in the domain of marketization – for example, the EU’s single market system – then the marketization segment reaches into those portions of society that are particularly market relevant: firms, businesses and business associations, and service companies, as well as those aspects of the states directly involved in market matters (notably, designated ministries and agencies). It also addresses persons mainly in their capacity as market actors (workers, employers, consumers, and so on). It follows that a segmented polity based on marketization systematically selects some specific groups or categories of societal actors as much more relevant and to be activated than other ones. Activation can take place through incentives or through legal empowerment as market participants through rights, through fostering networks and organizations for workers’ and employers’ participation and representation directed at the segmented polity.

Those civil society actors that are not deemed to be relevant for the segment are systematically excluded, considered irrelevant and/or organized out. Thus, whereas rights are powerful tools for activation, a marketization polity offers a limited range of rights – confined to market participation. Further, a marketization polity has weak means for attaching citizens to the polity in realms other than the market. It lacks socialization mechanisms to foster a national or other strong group identity. It follows that when we observe complaints from those excluded from a segment, it may serve as a proxy for the existence of a segment. Also, excluded actors’ pleas for inclusion in a segment will likely be heeded only if formulated and framed in line with the prevalent logic and discourse in a segment (e.g. marketization logic and discourse). Another way of putting this is that patterns of conflict are likely to emerge between segment insiders and segment outsiders.

Thus far we have argued that a segmented polity reaches into society and has instruments for connecting with and mobilizing the civil societies of the member states, but in a functionally speaking partial and segment-specific manner. The state penetrates civil society across multiple functional realms. The fact that a segmented polity reaches into society and should be associated with distinct terms of sociality is a further indicator that the segmented polity is a type of political configuration that neither fits with the state nor with the IO. A hallmark of a segmented polity is that it has developed explicit measures to define and delimit its own distinct social constituency. One way of doing so is by establishing boundary closure and control vis-à-vis actors not being conceived as members. Membership by societal actors in a segmented polity is limited by both closure and control of the boundaries of the segmented polity.

A segmented polity deviates from the category of IO because it has societal roots. An IO is a functionally delimited organization with no claim to autonomy from the states that formed it and that responds, sometimes incompletely, to their wishes and demands, and that also lacks any anchorage in the societies of the states that make up the IO. The category IO is therefore no challenger to nation-states and is compatible with a state-centric notion of territorial sovereignty, and thus a statist political order. The IO enables each member state to exert influence beyond its bounds without abrogating national sovereignty and control, including over their civil societies.

A segmented polity, by contrast, intervenes in, and variously activates and excludes portions of society along both vertical and horizontal lines. Vertically by denoting ties and arrangements for fostering inclusion and incorporation of the civil societies of the member states, and horizontally through interactions that the segmented polity forges across the civil societies of the member states. A segmented polity’s weak ability to penetrate the civil societies means that vertical ties and interaction between the supranational political system and the societies of the member states are systematically weaker than the horizontal dynamics it unleashes across the different societies of the member states. That is precisely the obverse of the classical nation-state that fostered strong vertical links and excluded as outsiders those from other states’ societies.

Vertically, a segmented polity imbued with rights-granting ability will have tools to define its social constituency in terms of persons and/or organizations as members or rights holders, with distinct rights and duties that they can hold against the system. Note that a hallmark of a segmented polity is that the nature and composition of rights is limited and as such diverges from Marshallian citizenship. Marshall (Reference Marshall1950) showed how citizenship over time became tied to the state so that the state became the authorized provider of rights (and obligations) and further that the development of rights over time expanded along functional lines to include civil, political, economic, and cultural rights. As we show in Section 4, the development of European citizenship reflected the early narrow definition of persons as market actors (Olsen, Reference Olsen2014). Over time this has expanded through the introduction of the Charter of Fundamental Rights of the European Union. Nevertheless, there is still a built-in bias in that EU citizenship is transnational and tailored to mobility. In addition, member states determine who is a European citizen.

The composition of rights is intrinsic to a powerful horizontal logic where the segmented polity unleashes distinct transnational dynamics between and among its member states. A case in point is the EU’s four freedoms, which confer internal market rights and participation on the member states’ corporations and citizens (and to some extent third country nationals, TNCs). The four freedoms unleash horizontal transnational dynamics because they compel the member states to open themselves to each other, especially within the realm of the EU’s internal market. Within this dominant EU segment, there is a strong onus on a level playing field and the removal of national barriers. This transnational opening-up is therefore selective and particularly pronounced in the internal market segment.

The Democratic Dimension

With democracy we refer to citizens understanding themselves as the authors of the laws they are subject to (Habermas, Reference Habermas1996). Institutionally speaking this entails that citizens authorize and control the system of governing and are equipped with legal and institutional means for participating in the law-making process. Segmented political systems are democratically deficient because of the normative and material constraints that the segmented polity faces. As noted, a hallmark of a segmented polity is that the constituent units confer independent decision-making power but deny the segmented polity Kompetenz-Kompetenz, or the power to define its own competence. The democratic legitimacy and moral authority of a segmented political system are therefore ultimately dependent on the constituent units; hence the normative constraints built into the segmented polity.

A further source of the democratic deficiency stems from the institutional composition of the segmented polity. A fully-fledged segmented polity will either lack democratic bodies for authorization and accountability, or individual segments may contain representative bodies that are clearly democratically deficient. As a rule of thumb, we can say that the salience and strength of a representative-democratic body is inversely related to the polity’s degree of segmentation.

A third source of democratic deficiency pertains to the relationship to society that will not as the marketization example shows contain the nature, reach, and role of basic rights that we associate with democratic citizenship. Rights to ensure market participation are mainly economic (and civil), not political. The notion of market citizens – and market citizenship – is therefore qualitatively different from political citizenship that is required for citizens to understand themselves as the authors of the laws they are subject to.

There are thus features of segments that render them quite inimical to democracy. The segment’s functional closure and in-built exclusive propensity are democratically deleterious. Segments reduce and bias democratic participation and transparency. Segments can shut out representative democratic bodies. Segments can sustain autocracies or support democratic backsliding. But segments can also serve as buffers against democratic backsliding when the autocratic leadership is unable to intervene in or reprogram segments – that is particularly relevant under conditions of segments in systems composed of many states, especially when the dominant states in the segment are not autocratic.

Democratization means intervening in and reprogramming segments to serve democracy when there are limited-purpose democratic bodies in place. Democratization serving desegmentation means establishing representative-democratic bodies when such are not in place. Democratization is also closely related to transparency, so any measure that increases overall system transparency will most likely have desegmenting effects.

Desegmentation

Before concluding the section, we need to clarify what we mean by desegmentation. A segmented polity is a polity that is contested, partial, and profoundly constrained. Desegmentation can accordingly occur along any single one, or all, of these three traits and will be detectable along all the nine dimensions listed in the previous paragraph. Desegmentation may occur through a change in formal competencies either through equipping the polity with Kompetenz-Kompetenz or through stripping it of power and competence (dismantling or down-sizing to IO). The former transforms the polity from a partial to a full-fledged or complete polity in functional-territorial terms and takes place through institution-building and integration that encompasses all relevant sectors or policy fields within a given territory. Such a process entails removing built-in constraints, reconfigures policy instruments and policy style, undoes institutional, policy and cognitive biases, and opens up segment-specific discourses and forms and sources of power. Desegmentation in capacity terms means equipping the polity with own resources and ability to sustain itself as a stand-alone level or system of governing. Desegmentation in democratic legitimacy terms entails equipping citizens with the requisite rights and democratic institutions to permit citizens to understand themselves as self-legislating persons. Desegmentation thus entails transition from normatively contested to normatively and socially supported polity. That does not rule out contestation but shifts it from polity to policy contestation.

a) Formal Competences and Their Sources

The EU is formally speaking an IO embedded in a set of treaties, the EU acquis, composed as it is with several distinct and seemingly contradictory traits. The EU’s powers and competencies are anchored in the treaties, and these are conferred on the EU by the so-called masters of the treaties, the member states. This means that the EU lacks Kompetenz-Kompetenz or the ability to decide its own competence, which is a hallmark of state and constitutional sovereignty. At the same time, EU law has supremacy and direct effect in those areas where the EU has competence, and the EU treaties function as a material constitution (but not a formal or democratic one, cf. Fossum and Menéndez, Reference Fossum and Menéndez2011). This legal system is institutionally embedded and consolidates the EU as a supranational political system embedded in law.

A cursory glance at the EU treaties does not seem to correspond with the notion of the EU as a segmented polity because the current treaties cover such a wide range of policy areas. But breadth of scope does not imply equal depth across the various policy areas. The core of the EU’s competencies as reflected in the treaties is the internal market and monetary union. The EU has long and especially after the UK left insisted that the four freedoms are indivisible (Barnier, Reference Barnier2017). That has prompted analysts to argue that the EU has developed a unique functional constitution, which emphasizes “economic prosperity and technocratic competence over the democratic will of citizens” (Isiksel, Reference Isiksel2016). The notion of functional constitution sits well with our notion of the EU as a segmented polity because it highlights the manner in which the EU treaties are designed to create and consolidate an EU internal market and economic union.

The system of comprehensive and detailed regulation especially in the EU’s internal market realm has made some analysts claim that the EU might suffer from over-constitutionalization (Grimm, Reference Grimm2017). It is then also noteworthy that the EU’s system of market regulations is in many ways more comprehensive than that of a fully-fledged federation such as the United States (Matthijs and Parsons, Reference Matthijs and Parsons2022). It is easy to think of this as an overzealous approach to market integration but that would ignore the important political objective underpinning European integration from its inception: to use economic integration embedded in legal regulations to foster political integration. Over time this generates an overreliance on economic and legal means of integration.

The political objective has throughout the EU’s history run up against initial and ongoing constraints. The member states are in charge of treaty changes, and each member state has the right to veto treaty changes. This serves as a straightjacket and an important mechanism for maintaining member state constraints on the nature and direction of EU integration and institutional development.

If we look at the text of the treaties, then, those factors that speak in favor of segmentation are not the general principles, which are wide and encompassing.Footnote ¹² One aspect that reveals a marketization bias (Bátora and Fossum, Reference Bátora and Fossum2020, Reference Bátora and Fossum2024; Bartl, Reference Bartl2015) is that the EU’s core competencies are in the realm of market integration and economic union, and the provisions guiding these are detailed and linked to specific institutional arrangements and obligations. Simply put, market integration is embedded in treaty-based hard law and EU supranational institutions; broadly speaking social welfare, tax, fiscal, and security and defense coordination are matters of soft law and political bargaining with a stronger anchoring in the EU’s intergovernmental institutions. The other more telling aspect relates to the constraints on the EU, not foremost in ability to intervene, but in terms of the means (policy instruments and resources) available for intervention. It is not simply the EU’s realm of competence or ability to intervene in a policy area that determines whether it is segmented or not; it is whether there is a distinct and dominant logic permeating the various policy areas that the EU intervenes in. In other words, the issue is whether the marketization logic is extended across policy fields, and through that, programs how the EU addresses the other policy fields.

Here the introduction of mutual recognition through the Court of Justice of the European Union’s (CJEU) Cassis de Dijon ruling is instructive:

On the one hand, this example shows that the more clearly economic integration is dis-embedded from its social moorings the more pronounced the segmentation. On the other hand, as the example also shows, the social dis-embedding is one where the free movement market logic trumps the concerns of other sectors, such as labor market and social regulations. The asymmetry of monetary and economic union in the EU’s legal-institutional construct has a similar socially dis-embedding effect.

The gist of the analysis thus far is that there is a gap between the EU’s stated aims, which are general and encompassing, on the one hand, and on the other its core capabilities as reflected in the institutional setup, the nature and repertoire of policy instruments, the nature and depth of capabilities (fiscal, military, and administrative), and the instruments for socialization and inculcation of allegiance. The EU system has long fought a struggle to obtain resources that it can autonomously determine the allocation of (foster desegmentation) but has run up against constraints.

b) Segment-Constituting Institutions

The EU’s distinct institutional configuration is conducive to segmentation in a rather insidious manner. Institutionally speaking, the EU combines a horizontal separation of functional spheres with a vertical integration of levels of governance more akin to the German federation than classical bipolar federations such as Canada and the United States (Scharpf, Reference Scharpf1988; Fossum, Reference Fossum, Bátora and Fossum2020). This structure helps to entrench two segments, each of which is based in and operated by a distinct institutional arrangement: one with the center of gravity in supranational arrangements (the internal market), the other with the center of gravity in intergovernmental arrangements in foreign and security and fiscal and tax policy (Fabbrini, Reference Fabbrini2019).Footnote ¹³ More concretely this means that the EU’s institutional system can be considered bifurcated with a Community System governing one set of functions, the internal market and flanking policies, and the Union System coordinating security and defense and other core state functions. The former is structured with the European Commission (EC), the CJEU, the European Parliament (EP), and the Council as the core institutions. The latter is structured with the Council and European Council (EUCO) the leading institutions (for the distinction between these two systems, see Fabbrini, Reference Fabbrini2015, Reference Fabbrini2019; Fossum, Reference Fossum, Bátora and Fossum2020). The EC plays a supporting role but neither the EP nor the CJEU play important roles within the Union System.

This structure reflects that the EU is institutionally speaking based on a distinct form of functional division, since policy areas are not only organized in separate sectors, but sectors are differently organized at the EU level. Federations normally introduce a divide between levels of governing, the EU additionally has such an institutional divide at the EU level. This distinct structure facilitates the close incorporation of member state officials and representatives in the EU system of governing. The institutional structure also places limits on the reach of the directly elected EP, whose role in the Union system is very limited. As noted in Section 3, segmented polities are marked by constraints on democracy.

The functional division between internal market (and flanking areas) on the one hand and core state powers on the other represents a built-in constraint on EU supranational integration. That has not prevented the EU from increasingly coordinating fiscal, foreign, security, and defense policy, but as the new intergovernmentalists (Bickerton et al., Reference Bickerton, Hodson and Puetter2015; Puetter, Reference Puetter2014) rightly note, this functional-institutional separation means that it does not take place through the same treaty-based legal provisions or institutional arrangements as the development and consolidation of the EU’s internal market. Since this division subverts supranationalism and transforms intergovernmentalism, with negative democratic effects, the upshot is to give credence to the notion of segmented polity. The democratization of the Community System reflects a long string of efforts to desegment the EU through for instance bolstering the power and decisional range across functional realms of the EP, developing European citizenship (from market citizens to political citizens, cf. Olsen, Reference Olsen2014) and other forms of increasing transparency and accountability. Nevertheless, the coexistence of the Community System with the executive-led and less legally entrenched and accountable Union system means that such desegmenting efforts have all fallen short.

If we look more closely at this structure, we see that the EU’s horizontal functional separation is combined with a vertical integration of levels, in the sense that the EU institutions are embedded in and interwoven with member-states’ governing institutions (Fossum, Reference Fossum, Bátora and Fossum2020). What is important to underline is that this integration underscores that a segmented polity cuts across levels of governing in “vertical segmental pillars,” neither of which complies wholly with supranational or intergovernmental principles, respectively. The EU’s institutional architecture contributes to the segmental lock-in through socially dis-embedding the market. That, as depicted above, takes place through on the one hand, inserting institutional constraints on horizontal coordination, market correction and fiscal stabilization at EU level, and, on the other, by national government officials’ direct involvement in EU-level decision-making, thus becoming co-responsible for joint decisions (Egeberg and Trondal, Reference Egeberg and Trondal2016). This is amplified by an encompassing structural imbalance. Fully functioning democracies typically have comprehensive executive, judicial, administrative, and legislative institutions capable of prying open or preventing segmentation and ensuring an open contestation of different world views, forms of expertise, and values and ideologies.

c) Built-in Constraints: Nature and Definition of Policy Area

The EU is facing constraints in a wide range of areas. Constitutionally speaking the member states still determine the EU’s nature and range of competencies, and that connects directly to the notion of EU’s constitutionalism having taken on distinct traits of functional constitutionalism. Institutionally speaking, the distinct combination of supranational and intergovernmental arrangements in the EU contributes to dis-embedding the market, and the asymmetry between monetary and economic policy. Monetary policy is an exclusive EU competence, whereas fiscal policy is still a member state competence (but coordinated by the EU).

This institutional configuration with fiscal policy in the hands of the member states represents a major constraint on the EU’s fiscal capacity, because the EU depends on the member states for its economic resources and the EU’s share of own resources is very small. The EU’s own resources in the new multiannual financial framework are supposed to increase from 1.2 to 1.4% of GNI (EUR-Lex, n.d.–a). The US federal government in 2022 in comparison disposed of 19.6% of GDP,Footnote ¹⁴ which is fourteen times that of the EU share. A political system with low levels of “slack” and limited access to own resources is not only externally dependent, but also highly vulnerable to external contingencies (Cyert and March, Reference Cyert and March1963).

The EU also has limited administrative resources and largely depends on the member states for effectuating its decisions. This dependence can generate significant implementation deficits, as states often contain compliance through nonimplementation rather than opposing EU provisions outright.

Compared to all its member-states, the EU’s normative and material constraints foreclose options that are available to the member-states in dealing with crises and contingencies (Riddervold et al., Reference Riddervold, Trondal and Newsome2021).

The EU is also constrained in how it intervenes in and activates the societies of the member states. The EU has very limited mechanisms for socialization and inculcation of citizens as Europeans, since it lacks many of the core institutions designed to undertake such tasks such as an army. It has no real ability to socialize persons through control of the school system or through the host of cultural institutions that nation-states make use of (national museums, national art galleries, etc.).

There is also a distinct shape to how the EU intervenes in the affairs of the member states. In Section 3, we distinguished between vertical and horizontal mechanisms. As noted in Section 3, Marshallian citizenship equips citizens with rights and obligations along civil, political, economic, cultural and social lines. This has direct democratic and identitarian implications: citizens understand themselves as co-legislators and as intrinsic to the social, cultural and economic fabric of society. The EU’s four freedoms do not have a similar attachment function. They are instead geared to ensuring that member (and affiliated) states are opening themselves up to each other so that capital, goods, services and persons can travel as freely as possible. That implies that the EU’s four freedoms are more directed toward unleashing horizontal dynamics across member states than toward fostering vertical dynamics along state – citizen lines (how classical Marshallian citizenship rights were designed). This aspect of states opening themselves up to each other represents a significant reneging of the classical state form of boundary control, as we saw in Section 2. This has profound bearings on the role and status of workers. “In both theory and practice, the border for the movement of services within the EU is no longer consistent with the edges of the physical territory of the member states. Yet borders still exist. They just exist elsewhere: in unequal pay, in lack of access to collective channels of representation, or in inability to claim rights” (Wagner, Reference Wagner2018: 2). This is part of what analysts refer to as the “commodification” of the EU’s labor market (Erne et al., Reference Erne, Stan, Golden, Szabó and Maccarrone2024) The development of European citizenship was then also initially anchored in the development of the EU’s internal market, and therefore transnational (Olsen, Reference Olsen2014).

Significant constraints on the nature and realm of EU action are also increasingly emerging from the rise of Eurosceptic and Europhobe political parties and social movements (Hooghe and Marks, Reference Hooghe and Marks2019). They demand clear constraints on the EU’s access to own resources (including taxing ability). In addition, their confrontational style and dismissal of experts gives impetus to experts and professionals to hide from the public limelight and seek out ways of working out problems with as little publicity as possible, thus indirectly helping to foster forms of segmental closure.

d) Policy Instruments and Policy Style

With policy style is meant “standard operating procedures” for how states make and implement policy (Richardson, Reference 87Richardson1982). The EU’s distinct policy style has, historically speaking, been centered on politics by regulation, especially in the realm of internal market. This relates back to the need for common rules to establish and entrench a common or internal EU market, and to prevent this from being undermined or subverted by nation-specific or subregion-specific rules and regulations bent on reducing external competition. The EU’s regulatory onus is also directly linked to the EU’s weak fiscal basis.

That is not to say that the EU solely relies on regulation; it entails that regulation makes up an exceptionally large proportion of the EU’s repertoire of policy instruments. This includes regulatory instruments such as EU Single Market Acts,Footnote ¹⁵ including in flanking areas such as emission standardsFootnote ¹⁶ and market-based instruments such as environmental taxesFootnote ¹⁷ and trade defense instruments.Footnote ¹⁸ The use of these instruments in turn helps solidify a segmentation bias.

e) Participant Traits: Expertise

In Section 3, we also associated a segmented polity with a set of actors with a distinct type of expertise. EU integration has historically been driven by executives and experts. In that sense the harnessing of expertise is a central aspect of EU policymaking, and the EU’s strong role in market-making necessarily means that the accumulation of experts in all aspects of market making is an intrinsic aspect of the EU’s political-administrative make-up. Nevertheless, and in line with the EU’s expanded policy portfolio, the EU’s realm of expertise has also widened. But the EU’s institutional make-up, capability profile and distinct policy style entail that the market relevant forms of expertise are particularly privileged. This includes expertise in developing and implementing the Single Market as well as expertise supporting development of entrepreneurship in various industries.Footnote ¹⁹

f) Patterns and Processes of (Stymied) Learning

The EU’s marketization bias has cemented over long time and can be said to form an underlying structural bias. That can also be considered a form of learner lock-in and an over propensity to foster market-making as the density of market regulating rules testifies to. Such a learner lock-in occurs at the behest of market correcting or how market-making can be harmonized with market-correcting devices. Over time such a lock-in reinforces this constellation over time so that the organization or system falls out of step with a changing environment. The Euro crisis has exposed how the EU process of integration pre-crisis had become increasingly stuck in what March and Olsen (Reference 85March and Olsen1995) refer to as a “competency trap” or learner lock-in, which:

In the case of the EU, the main issue was stymied learning due to resource and capability constraints. The effect was similar to a learner lock-in, but the process was more one of material rather than cognitive constraints. A clear manifestation of this was the great gap between monetary and fiscal union. The upshot for the EU as a polity meant that it achieved significant progress and competence in market-making, whilst, at the same time, there was limited scope for allocating resources and capacities to deal with the negative effects of market-making (Scharpf, Reference Scharpf2010).

g) Segment-Specific Discourses

The EU with its broad remit of tasks suggests that it would be difficult to identify anything resembling any single one market-segment-specific discourse. Still, as Morin and Carta (Reference 86Morin and Carta2014) observe, a discourse characterizing the EU as a “competitive social market economy” has been taking hold. This is legally formalized as a formulation in the Lisbon Treaty (Art. 3(3)). With its focus on social aspects this term discursively sets the EU’s market liberalism apart from unregulated forms of market liberalism in the US or Asia (Morin and Carta, Reference 86Morin and Carta2014: 126), but this discourse is social-liberal not social democratic, since it focuses much more on market-making than on market-correcting mechanisms. The EU’s market segment thus arguably does feature a specific type of segment-wide discourse. In addition to that there are also discourses in various subfields of the market segment. EU competition policy is a key example. It is intrinsic to the EU’s marketization thrust. The most salient segment-specific discourse relates to the central role of competition law and the significant onus EU institutions place on preventing national barriers to the four freedoms, in the effort to sustain the internal market. The EU’s response to the COVID-19 pandemic and the Next Generation EU program represented significant modifications to the strong onus on a level playing field logic that permeated the competition discourse. Nevertheless, as long as the EU must contend with the current level of resource and other constraints there are limits to how much this discourse will open.

h) Segment-Specific Forms and Sources of Power

Segments can be accumulations of networked and organizational power. In the EU’s market segment, power is wielded through a constellation of actors, institutions and regulatory-, ideational-, and financial resources. This was demonstrated, for instance, in the specific policies implemented in the context of the Greek financial crisis after 2010. In this period, Greece was, in effect, made to choose austerity measures very much inspired by neoliberal and/or ordo-liberal approaches. This dominance effect was achieved through a combination of EU institutions put in place to deal with the crisis (e.g. Troika) and taken-for-granted ordo-liberal assumptions about efficient economic reforms (Chatzistavrou, Reference Chatzistavrou, Bátora and Fossum2024; Hjertaker and Tranøy, Reference Hjertaker, Tranøy, Bátora and Fossum2024).

In the global context the EU – as the sum total of the EU institutions and its member states – makes up a significant accumulation of economic power and clout, as is reflected in Bradford’s The Brussels Effect (Reference Bradford2020). The EU in line with its center of gravity being located in the internal market can be labeled an economic giant and a fiscal and military midget. That suggests that the EU’s ability to wield global power is better under fair than under foul weather conditions. This may also make the EU more vulnerable to external and internal threats and challenges than an ordinary state of comparable size.

i) Segment Structuring Events

The EU’s formation with the built-in bar against integration in security and defense can be considered a vital segment structuring event. This founding moment provided much of the genetic soup (see Section 1) that was later drawn upon in the EU’s development, which exhibits a lopsided development of the EU’s economic versus political and cultural persona. A further segment structuring event was the financial crisis from 2009 onward. It originated in the US but developed into an existential crisis for the EU due to the flaws built into the EU’s monetary union. The EU’s reactions to the financial crisis represented a case of segmental closure after a long period of desegmentation (Bátora and Fossum, Reference Bátora and Fossum2020). Also, the COVID-19 crisis and the post-COVID-19 recovery measures – including the setting up of the NextGen EU fund and the national recovery and resilience plans in all member states represents a new phase in the development of the EU’s economic governance – a phase some over-optimistically referred to as the Hamiltonian moment but also a phase introducing new forms of intra-EU reform conditionality (Bátora, Reference Bátora, Bátora and Fossum2024). This has structuring effects on the EU’s market segment in that new types of regulatory mechanisms are set up and new procedures for redistribution of resources are adopted. In fiscal terms, the EU’s COVID-19 response is the clearest example thus far of a desegmenting thrust because the measures were directed toward the green transition. For the EU a move toward a circular economy would represent a major desegmenting development, since other than narrow market-oriented criteria would determine the EU’s policy stances.

To sum up, the assessment of the EU thus far has shown that the EU’s internal market is both polity constitutive for the EU and at the same time an important source of the EU’s segmentation thrust. The segmentation thrust within the internal market realm stems largely from the constitutional, institutional and resource-based constraints on the EU’s supranational arrangement, which effectively preclude it from functioning as a fully-fledged and self-standing system of governing.

The analysis has traced elements of segmentation; less emphasis has been placed on desegmenting elements and dynamics. There are however powerful actors and factors pointing in a desegmenting direction, notably the European Parliament, national parliaments, political parties and civil society actors. The assessment has pointed to the system’s built-in constraints, factors themselves shaping and conditioning the scope for desegmentation.

a) Formal Competences and Their Sources (Law versus Politics)

Traditionally, formal competences for the coordination of the EU’s security and defense policy have been anchored, primarily, in the Council of the EU. Here, intergovernmental coordination of CSDP and CSFP have been performed. A number of EU-level agencies have been supporting the Council’s role in coordinating security and defense in the EU – most notably the European Defence Agency (EDA),Footnote ²⁰ the EU Satellite Centre (SatCen),Footnote ²¹ and the EU Institute for Security Studies (EU ISSS).Footnote ²² The European Commission has traditionally been taking a limited role in defense and security due to legal constraints in the Treaties (see c) below) and much of its coordination role has been focusing on “dual-use technologies” (Schilde, Reference Schilde2023). But, following Russia’s full-scale invasion of Ukraine in 2022, the need to coordinate defense industries as well as security aspects in the EU’s economy has become increasingly pressing. Since 2024, the European Commission thus includes the post of the Commissioner for Defence and Space.Footnote ²³ The Commission has been instrumental in coordinating a number of new defense initiatives such as ReArm Europe (White Paper 2030).Footnote ²⁴

b) Security Segment Constituting Institutions

The EU’s security segment involves, first, public governance institutions at the EU level and in the member states: the European Commission and the Council of the EU (and various agencies working under their authority) as well as bodies such as the European External Action Service and FRONTEX/EBCG; member state governments providing capabilities and resources to the EU’s crisis management operations and enforcement of security related legislation and other rules; and coordinating bodies such as OCCAR regulating defense industrial production in the EU (but not formally part of the EU’s treaty framework).Footnote ²⁵ Second, the security segment includes private enterprises involved in providing various aspects of security: private defense industries (Schilde, Reference Schilde2023; Hoeffler Reference Hoeffler2023) as well as the growing industry composed of private military- and security companies linked with the EU on various levels (Bátora and Koníková, Reference Bátora and Koníková2025). Third, the EU’s security segment features civil society organizations – think-tanks (CEPS, Bruegel, Globsec), advocacy groups, NGOs promoting various types of security agenda in the EU. The security segment thus spans the public-, the private- and the civil society dimensions.

c) Built-in Constraints: Nature and Definition of Policy Area

Since the 1950s, the domains of defense and security have been formally and legally excluded from the integration of the EU’s single market. Défense and security have been among the key markers of national sovereignty. Hence, defense industries in the EU have been developing in the respective national silos within member states – each with its own specific legal frameworks and regulations. The Treaties stipulate that defense production is to remain within the domain of the member states (article 296 TEU). This constitutes a set of serious built-in constraints – both of legal and political nature – on the development of the industrial basis and standardization of equipment in the EU’s armed forces. Indeed, two decades after the launch of the European Defence Agency in 2004 – aimed at breaking down national barriers to joint defense production and acquisitions in the EU (Bátora, Reference Bátora2009) – the member states continue to systematically use exemptions under Article 346 TFEU (Helwig and Iso-Markku, Reference Helwig and Iso-Markku2024: 16). Those exemptions allow for nonapplication of standard procurement rules in defense production if national security interests are at stake.

In parallel, there are serious constraints on the EU’s actorness as a security and defense actor – all that in a time of major external and internal security challenges to the EU requiring a well-working defense coordination on the EU level. At the time of writing, EU member states were producing at least 16 different types of tanks and armored vehicles – each based on somewhat different technological standards. The legal constraints also led to serious impediments in army logistics (e.g. moving troops across borders of member states requires lengthy administrative procedures and troops often lose days when waiting for approvals by member state authorities) and even in cases of deliveries of spare parts for defense equipment to the member states’ military forces.Footnote ²⁶

As security threats in the current global environment expand and encompass a broad spectrum of instruments in various social domains (e.g. economy, culture, mediascape, cyberspace, AI, drones), economic and other types of interconnectedness represent a growing security challenge. In this dimension of societal security and resilience, fragmentation of national regulatory capacities represents yet another serious constraint on the EU’s ability to develop an effective security policy. China’s, and other authoritarian powers’, uses of gray-zone warfare strategies (i.e. using economic- and other societal instruments for military purposes) have thus been undermining security in the EU. Here, economic security-related regulatory initiatives of the European Commission (2023,Footnote ²⁷ 2024Footnote ²⁸) have sought to bridge the gaps existing due to legal constraints in organizing industrial and other economic policies in the EU member states. This includes investment screening, import- and export control mechanisms, protection of critical communications infrastructures, and, not least, protection of access to key technologies and critical raw materials (Sverdrup, Reference Sverdrup, Fossum and Trondal2025).

The salience of constraints is very visible in terms of the lack of societal depth: the segment reaches companies or businesses much more explicitly than it reaches citizens. That can be illustrated with reference to two forms of reaching out to society that are familiar from the state context. The first relates to how persons are recruited to serve the country as soldiers and other related tasks (see Section 2 and Rokkan’s Reference Rokkan and Tilly1975 scheme). The EU’s lack of a standing army, lack of conscription and lack of an EU police force mean that the EU is barred from reaching into this important portion of society. The second is much more indirect and pertains to schooling and socialization and the various instruments states have to inculcate a national identity and sense of belonging. The EU has no such comparable instruments.

d) Policy Instruments and Policy Style

In 2025, there are several policy instruments supporting the EU’s security segment. First, the European Defence Fund (EDF)Footnote ²⁹ provides financial support for research and development in defense technologies and for joint projects in this area (Andersson and Britz, Reference Andersson and Britz2025).

Second, the European Peace Facility (EPF)Footnote ³⁰ – originally set up to support peace-building processes in Africa – has been repurposed and is used to support Ukraine with military aid, including the delivery of weapons and other lethal military aid.

Third, as a way of expanding financial investments into defense projects in light of Russia’s ongoing war on Ukraine and its potential further threats against the multilevel EU political system, the EU has also set up Security Action for Europe (SAFE). Providing up to 150 billion euro in loans for defense investments to member states, this new instrument backed by the EU budget will allow for enhancing spending on: (1) air and missile defense; (2) artillery systems; (3) missiles and ammunition; (4) drones and anti-drone systems; (5) strategic enablers and critical infrastructure protection, including space-related aspects; (6) military mobility; (7) cybersecurity, artificial intelligence, and electronic warfare (De Lemos Peixoto et al., 2025). Projects hence funded are supposed to involve at least two states – and whenever reasonable and possible involve Ukraine and/or have a focus on supporting Ukraine’s defense.

Fourth, SAFE is part of the broader initiative called ReArm Europe Plan/Readiness 2030 (European Commission, n.d.–e). This plan focuses on closing capability gaps in defense and security; developing the single defense market in the EU; and boosting European defense readiness for war scenarios including stockpiling of ammunitions and coordinating military mobility and logistics schemes across borders. To achieve these goals, ReArm Europe uses various measures including activating national escape clauses, launching initiatives such as the above mentioned SAFE, and expanding the European Investment Bank’s scope to include defense and security investment projects.

Fifth, the European Defence Industry Reinforcement through common Procurement Act (EDIRPA): This act aims to facilitate joint procurement of defense equipment (Helwig and Iso-Markku, Reference Helwig and Iso-Markku2024). This legislative and regulatory initiative is motivated by the fact that there has been little progress in integrating EU member states’ defense industries despite the seriousness of the geopolitical situation – in particular since the start of Russia’s full-scale war on Ukraine. Key defensive powers in Europe – including France, Germany, Italy and the UK – continue to develop their defense industrial complexes with national priorities and separate regulatory frameworks (Schnitzler, Reference 88Schnitzler2024).

e) Participant Traits: Expertise, Knowledge, Interaction

The development of the EU’s security segment is supported by specific types of expertise, knowledge and interaction patterns. Expertise could be defined as skills in areas like military procurement, cybersecurity, weapons systems, protection of critical infrastructure, intelligence and policing. Knowledge includes understanding of defense and security laws, relevant technologies, the political and regulatory landscape. Interaction involves stable patterns of cooperation between member states, EU institutions, defense industries, and civil society actors.

In the field of expertise, governmental participants in the EU’s security segment possess “key skills.” As an EDA-contracted study by a team at RAND Europe points out, “these include national and EU defence procurement management and legal expertise, as well as a number of technical skills areas such as military aviation and air worthiness, cybersecurity, military weapons systems, and chemical and biological warfare” (Silfversten et al., Reference Silfversten, Hall, Kepe and Flint2017: vii). Similarly, skills in investment screening, export and import control, and protection of critical infrastructures belong to the skill set (see Sverdrup, Reference Sverdrup, Fossum and Trondal2025).

When it comes to knowledge, specific knowledge on the advancements in defense technology and dual use technologies is included (European Commission, n.d.–e). Also, strategic knowledge of the political landscape and the political decision-making processes as well as legislative processes in the development of regulatory frameworks in the field of security and defense (EEAS, 2023). Finally, it also includes knowledge of the defense industries in Europe including resources, personnel, supply chains and logistics networks. In 2020, the EU’s defense industries had a turnover of 119 billion euros, about 463.000 employees and featured around 2500 small- and medium-sized enterprises (Giacomello and Preka, Reference Giacomello and Preka2023). The most significant defense industrial sectors (in terms of number of companies) were based in the UK, France, Germany, the Netherlands, the Czech Republic, Italy, closely followed by the Nordic countries and Poland (Giacomello and Preka, Reference Giacomello and Preka2023). The order is somewhat reversed when it comes to the size of the defense industries in terms of turnover and number of employees with France, the UK, Italy and Germany in the leading positions (Bátora, Reference Bátora2021). Following Russia’s full-scale invasion of Ukraine in 2022, this is likely to have grown substantially along both dimensions. Either way, there is a significant Western European clustering of defense industry in Europe (Giacomello and Preka, Reference Giacomello and Preka2023).

As for interaction patterns, those include established coordination mechanisms between various actors including EU institutions, member state governments, private security and defense enterprises as well as civil society actors. That includes formalized procedures in defense standardization, procurement and implementation of defense and security projects via organizations such as EDA and OCCAR (Bátora, Reference Bátora2021). It also includes more organic patterns of sharing information, expertise and knowledge across more or less stable networks in EU security and defense.

f) Patterns and Processes of (Stymied) Learning

The EU’s security segment is supported and continuously enhanced by a training and learning ecosystem consisting of a combination of formal training programs; informal knowledge sharing in epistemic communities and expert groups; and advocacy for specific forms of knowledge and expertise in the public domain.

Formal training is provided by EU agencies such as EU-LISA (focusing on IT systems in border protection and law enforcement), CEPOL (focusing on law enforcement, policing and other security and defense functions), and ENISA (focusing on cybersecurity and digital aspects in critical infrastructure security). Advanced types of cybersecurity and digital security training is also provided by NIS-2 (EU cybersecurity framework).

In addition to formal types of training, there are also various ways of knowledge sharing based on field-level experiences in the conduct of EU security and defense policy. This includes various types of workshops, debriefings and training sessions based on experiences collected during CSDP crisis management missions establishing what Bremberg and Hedling (Reference Bremberg, Hedling and Bremberg2022:146) refer to as “learning communities.” As these findings indicate, the security segment is not well established yet and it would be useful to explore the “learning communities” in more detail, as such structures may be the carriers of segmentation and specific – biased or stymied – forms of learning.

g) Segment-Specific Discourses

The emerging security segment in the EU is also characterized by specific types of security discourse. This encompasses a broad range of topics including military and defense capabilities, border security, counter-terrorism, cyber security, and economic resilience. Also, it includes the transposition of security terminology in various functional domains of governance – diplomacy, finance, economy, humanitarian aid, that is, a form of securitization.

The security segment discourse is characterized by segment-specific terminology. This includes terms such as “security sector reform” and “crisis management operations” that have come to signify entire clusters of doctrines, tactical guidelines, operational practices, and rule sets. Also, terms such as “strategic autonomy” and “proactive threat mitigation” have come to take on specific meanings in the practical conduct of EU’s security and defense policy.

Also, language (specific types of vocabulary and terminology) is used as a vehicle for securitizing various domains in society and economy. The domain of digital economy regulation is but one example where language is actively used for securitization purposes (Mügge, Reference Mügge2023). As Juncos and Vanhoonacker (Reference Juncos and Vanhoonacker2024) show, however, discursive securitization does not automatically succeed in every policy domain and discourses of, in this case “strategic autonomy,” need to be actively promoted. The broader point is, though, that security segmentation is carried by new types of discursive practices.

h) Segment-Specific Forms and Sources of Power

Power in the security segment is wielded though a combination of formal institutions, roles, resources, networks of participants, practices (e.g. agenda setting) and discursively constructed inter-subjectively shared meanings (or ideational power).

Formal institutions have mandates, but their power is determined also by the ability of incumbents of formal institutional positions to activate networks of influence cutting across formal institutional boundaries. As Mérand (Reference Mérand2021) has shown in his analysis of what he calls “political work” by the cabinet of one of the European Commissioners, these players overcome formal constraints on their position by activating resources, alliances and messages across a spectrum of institutions, agencies, governments, enterprises and media actors. Power wielded in this way operates often beyond formally established channels and procedures. In a similar fashion, power is wielded in the security segment by the activation of resources, alliances and messages across a constellation of actors involved in security and defense of the EU.

When it comes to ideational power, as Carstensen and Schmidt (Reference Carstensen and Schmidt2016: 327) point out, it is based on “the ability of actors – normally quite powerful also in terms of institutional position and authority – not to listen, i.e., a capacity to resist alternative ideas.” This constitutes “power over ideas” (see also Juncos and Vanhoonacker, Reference Juncos and Vanhoonacker2024). In the EU’s security segment, ideas such as “strategic autonomy” or “security sector reform” have powerful mobilizing effects in shaping perceptions and setting standards of expected actions.

i) Segment Structuring Events

Given the legal constraints in coordinating defense and security in the EU, a number of initiatives had to be introduced to coordinate member states’ policies under these constraints. Three types of segment structuring events can be recorded: first, legal events: these are key events when new legislation or new institutional structures are introduced with direct impacts on interactions in the security segment: founding of EDA in 2004; launching of PESCO and the European Defence Fund in 2017Footnote ³¹; founding of the European Peace Facility in 2020 (repurposing in 2022–2023)Footnote ³²; adoption of new guidelines for involvement of private military and security companies in EU crisis management operations in 2014; adoption of the Directive on security of network and information systems (NIS Directive) in 2020 (European Parliament Think Tank, 2020).

Second, there are segment-generating reforms. For instance, in France, in light of the ongoing invasion of Ukraine by Russia and the need to rebuild French defense capacities and stockpiles, the French defense ministry has opened up for more regulatory flexibility in exchange for the defense industry carrying out much of the building of the stockpiles and diversification, as well as carry most of the risks related to these processes (Schnitzler, Reference 88Schnitzler2024: 6). Similar processes where the state is teaming up with industries in developing its defense and security capacities are recoded in Germany, Italy and the UK (with some differences in the dynamics) (ibid.). The point in the context of the current analysis is that such geopolitical crisis-driven sharing of defense responsibilities between the State and the private defense sector is a key driver of security segmentation.

Third, there are segment supporting deliberative events: these are stakeholder forums and public consultations where key actors from the segment participate and contribute to shaping and reshaping of rules pertaining to the segment. As the White Paper for European Defence Readiness 2030 (White Paper 2025) points out, there is a need for the Commission (DG DEFIS), to organize a stakeholder forum motivated by an attempt to simplify and harmonize rules:

With this goal in mind, the Commission (DG DEFIS) organized a stakeholder consultation on the Defence Omnibus Simplification Proposal – and collected data from member states, defense industry and other actors in the first half of 2025 with the aim of simplifying procedures in defense production, joint acquisitions, and so on. This could be classified as a segment structuring event – adopting new sets of rules and principles that will then determine future defense industrial cooperation in the EU.