CONSTRUCTING A SUPRANATIONAL CONSTITUTION - DISPUTE RESOLUTION AND GOVERNANCE IN THE EUROPEAN-COMMUNITY

We present a theory of European legal integration that relies on three causal factors: transnational exchange, triadic dispute resolution, a nd the production of legal norms. After stating the theory in abstract terms, we explain the construction of the legal system and test the r elationship among our three variables over the life of the European Co mmunity. We then examine the effect of the EC legal system on policy o utcomes at both the national and supranational levels in two policy do mains: the free movement of goods and gender equality. Our theory outp erforms its leading rival intel governmentalism. The evidence shows th at European integration has generally been driven by transnational act ivity and the efforts of EC institutions to reduce transaction costs, behavior which governments react to but do not control.