Salience and sanctions: a principal-agent analysis of domestic win-sets in two-level games—the case of British European policy under the Blair government

Abstract

The two-level approach is often criticized for its failure to provide thorough theoretical guidance to the empirical task of establishing the boundaries of governmental win-sets. Addressing this deficit, the article builds upon principal-agent theory to deduce two determinants of win-sets: the salience of a foreign policy issue for a government's domestic principals and the credibility of these principals' threats to sanction their governmental agent for its policy on this issue. To illustrate the analytic utility of the framework, the article puts forward a case study on British European policy under the Blair government. It is argued that the major patterns of New Labour's policy on Europe can be accounted for by shifts in the domestic salience of the European issue and in the ability of principals to credibly sanction their agent's European policy making.