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Introduction The aim of this thesis is to improve the theoretical understanding of the decision making in the European Union (EU), focusing on the reform processes that shape one of the Union’s most controversial policies—European Common Agricultural Policy (CAP). A better understanding of the CAP decision making is important, not only because it accounts for just over a third of 1 the EU’s budget. Most of the CAP’s budget supports farmers’ incomes . The political economy that has let wealth flows from consumers, taxpayers, and foreign producers to farmers is worthy of being closely investigated because farmers might not, on the first glance, look like a strong 2 vested interest group that is able to extract rents from the rest of the society. After all, only 5.2% of the EU population is employed in agriculture (Wozowczyk and Massarelli 2010, 4) and the agricultural sector contributes only 1.2% to the overall GDP (The Commission 2013). CAP is controversial because, among other reasons, “the case for the CAP’s income support is difficult to make in a market economy where economic agents in other sectors also face the risk of gradual or sudden income decline” (Pelkmans 2006, 218-219). Furthermore, trade-distortive production persists for many agricultural products (Baldwin and Wyplosz 2009, 374) and causes many trade disputes with the EU’s international trade partners. Sophie Meunier and Kalypso Nicolaïdis (2005) have even raised the question whether the EU can “genuinely pretend to defend the developing countries in view of the amount of subsidies poured into its protectionist agricultural policy?” (259). In addition, careful empirical analysis 1 The precise figure of €43.8 billion (33.8% of the EU budget in 2011) excludes other support measures for architecture, such as tariff protection and payments by member‐states. This figure also excludes the Rural Development pillar of CAP, which made up 9.5% of the EU budget in 2011 (The Commission 2012). 2 Broadly, economic rent is defined as “a return in excess of a resource owner’s opportunity cost” (Tollison 1982, 575). Excess rates of return can be obtained by individuals or groups (in this case the farmers’ lobbies) if they are successful in ‘rent‐seeking,’ which can be understood as “the act of trying to seize an income flow rather than create an income flow” (Hindriks and Myles 2006, 335). 8