"European integration and supranational governance"

We argue that European integration is provoked and sustained by the development of causal connections between three factors: transnational exchange, supranational organization, and EC rule-making. We explain the transition in any given policy sector, from national to intergovernmental to supranational governance, in two ways. First, cross-border transactions and communications generate a social demand for EC rules and regulation, which supranational organizations work to supply. We thus expect that the Community competencies will be unevenly constructed, both across policy sectors and over time, as a function of the intensity of these demands. Second, once the EC rules are in place, a process of institutionalization ensues, and this process provokes further integration. Although we recognize the importance of intergovernmental bargaining in EC politics, our theory is not compatible with existing intergovernmental theorizing