EXIT, VOICE, AND COOPERATION: BARGAINING POWER IN INTERNATIONAL ORGANIZATIONS AND FEDERAL SYSTEMS Jonathan B. Slapin ABSTRACT Literature on international organizations points to several potential sources of bargaining power: voice, exit, and exclusion. In some circumstances, a member state may be able to effectively voice objections to a change to an organization’s institutions. In others, it may threaten to leave the organiza- tion if its demands are not met. Finally, member states may be able to force a laggard member state to accept unwanted change by threatening to exclude the laggard from the organization. Under what circumstances do these strate- gies provide bargaining leverage? Are these options available simultaneously or if one is available does that mean that the others are not? What implica- tions does this have for international cooperation, and more broadly, the pos- sible creation of a federal state? This article seeks to answer these questions using a formal model to examine the interaction between voice, specifically veto rights, exit, and exclusion in international organizations and federal states. The model has implications for European integration and can also help explain the conditions under which independent states give up sovereignty to form a stable federal union. Implications of the model are tested through a case study of EU integration in the 1970s and 1980s. KEY WORDS . Bargaining Models . European Union . federalism . interna- tional organization . veto power 1. Introduction Following the February 1974 British election, Harold Wilson became the first Labour prime minister since the UK joined the European Community (EC) on 1 January 1973. 1 Upon taking office, he immediately demanded the EC renegoti- ate British terms of entry, and threatened to leave the organization if his demands were not met. Labour’s election manifesto went so far as to state, ‘If I would like to thank Julia Gray, Dar Kelemer, Phillip Lipscy, Brent Nelson, Sven-Oliver Proksch, Nicole Simonelli, and George Tsebelis, along with numerous conference participants, and several anonymous reviewers for their helpful comments. All remaining errors are my own. 1. At the time the European Union was called the European Community. It adopted its current name with the 1992 Treaty on European Union. Journal of Theoretical Politics 21(2): 187–211 Copyright © 2009 SAGE Publications DOI: 10.1177/0951629808100763 Los Angeles, London, New Delhi, Singapore and Washington DC http://jtp.sagepub.com at Shanghai International Studies University on November 3, 2016 jtp.sagepub.com Downloaded from at Shanghai International Studies University on November 3, 2016 jtp.sagepub.com Downloaded from at Shanghai International Studies University on November 3, 2016 jtp.sagepub.com Downloaded from