Czech Economic Review 6 (2012) 107–124 Acta Universitatis Carolinae Oeconomica Received 4 December 2011; Accepted 30 March 2012 Negotiating the Lisbon Treaty: Redistribution, Efficiency and Power Indices Diego Varela * , Javier Prado-Dominguez ** Abstract In this paper, we try to explain the intergovernmental negotiation of the Lisbon treaty from a rational choice perspective with the aid of power index analysis. There are two aspects of the reform of qualified majority voting (QMV) in the Council that we find puzzling. The first one is that, according to Shapley-Shubik index based on the notion of power as the distribution of a fixed prize, small and medium-sized member states have lost power as compared to the Nice treaty, which conflicts with the unanimity requirement for treaty reform. The second one is that, according to the Banzhaf measure based on the notion of power as influence, the Lisbon treaty leaves all member states worse off in absolute terms as compared to the Convention’s draft. We propose the measure developed by Steunenberg et al. (1999) as a possible solution to these paradoxes, and draw some conclusions about the nature of EU policy making and power index analysis. Keywords Council, European Union, Lisbon treaty, negotiation, power index, voting JEL classification D78, F55, H77 * ** 1. Introduction Agreeing to new rules for a qualified majority in the Council has proven to be one of the main hurdles in the reform of the Nice Treaty that envisaged the establishment of a Constitution for Europe and ended up in the current Lisbon Treaty. The new voting rules substituted the triple majority requirement of Nice (72% of weighted votes, 50% of member states and 62% of the population) with a double majority system (55% of member states and 65% of the population). In between was the Convention’s draft treaty that contained a less stringent double majority rule (50% of member states and 60% of the population). In this paper, we analyze the intergovernmental negotiation of the Lisbon treaty from a rational choice perspective. Other studies have focused on the efficiency or the fairness of the new rules from a normative perspective (Laruelle and Widgr´ en 1998; Leech 2002). But in this paper, we analyze the negotiation process from a positive perspective, trying to understand the negotiating positions of the individual member state governments that made the final outcome possible. This is an instance of how * University of A Coru˜ na, Faculty of Economics and Business, Campus de Elvi ˜ na, 15071 A Coru ˜ na, Spain. Phone: +34 981167000, E-mail: dvarela@udc.es. ** University of A Coru˜ na, Faculty of Economics and Business, Campus de Elvi ˜ na, 15071 A Coru ˜ na, Spain. Phone: +34 981167000, E-mail: ajaprado@udc.es. Czech Economic Review, vol. 6, no. 2 107