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How Brexit Came to Pass

Tim Buthe

DT: There have been many reports in recent days of British voters who supported "Brexit" having regrets, saying they voted without full knowledge of the consequence, even arguing they have been misled.  Is this more than standard buyer's remorse?

TB: It's been striking to read the reports from internet search engines about the massive increase in information searches, originating from within Britain, about the EU, how it operates, what is actually decided at the EU level and what is not -- all after the referendum.  This is consistent with the impression I had from watching the debate over "Brexit" in Britain in recent month, which seemed to leave British voters stunningly poorly informed.

Contrast this with the public debates that preceded referenda on whether or not to join the EU in the 1990s in Austria, Finland, Norway and Sweden.  I examined this closely in Austria. At that time, most political and civic leaders and the media all worked to genuinely inform the public.  They differed, of course, in their interpretation, and in how they judged the trade-offs required. But it was striking how even the tabloids, even the ones that opposed EU membership, founds ways of conveying a really good understanding of the EU institutions, the complex legislative process at the EU level, and the pros and cons of exchanging nominal national sovereignty for the "shared sovereignty" of EU membership in the issue areas where the EU member states decide jointly. 

Such information was stunningly marginal, if not altogether absent, from the UK debate in recent months, which mostly consisted of trading assertions about the ostensible horrors of current EU membership and the imagined horrors of an existence outside the EU, many of which seemed clearly exaggerated on both sides and thus lacked credibility.

So it is, sadly, not surprising that many UK voters are waking up to having voted to leave the EU without feeling that they really understood how it worked.  But it seems highly unlikely that there will be a reconsideration of the referendum result.


DT: The British Prime Minister, David Cameron, has announced he will step down, because of the result of the vote.  Why?

TB: Prime Minister Cameron made the holding this referendum part of this election platform.  He had two goals in doing so, and he spectacularly failed to achieve either one.

Mr. Cameron's first goal in holding a referendum was that he thought the prospect of the referendum would give him leverage for negotiating a "better deal" with the EU in the run-up to the referendum.  Britain for a long time has enjoyed the full benefits of EU membership but paid less of the full costs that a country of its size and wealth normally would.  But Mr. Cameron claimed that he could get the other member states to agree to Britain contributing even less to the EU. 

He also wanted to change the terms of the UK membership such that, in many policy areas, joint decisions of the EU member-states would only apply to the UK if its government or legislature liked them.  But the other member governments only agreed to very marginal changes in the British terms of membership.  So Mr. Cameron, after having for tactical reasons effectively claimed that EU membership on the old terms wasn't worth it anymore, had to go back to the voters to ask them to vote for remaining in the EU on largely unchanged terms.  His use of the referendum as a tactical ploy for political leverage vis-à-vis the other European countries clearly failed.

His second goal in holding the referendum was to get such a strong, clear result -- something like 70 percent or more, presumably in favor of his successfully renegotiated UK membership -- that it would finally stop the bickering over EU membership, including within his own party, the Conservatives, of whom a large minority had never really come to terms with having joined the EU in the 1970s.  The sniping from the sidelines by those "Euroskeptics" (some of which a few years ago founded the "UK Independence party" that has also been threatening the Conservatives at the ballot box) had been a constant irritant to Mr. Cameron.  And he expected the referendum would show that all the talk of wanting to leave the EU was mostly just cheap talk, and when asked to actually make a decision, British voters would overwhelmingly vote in favor of staying in the EU, allowing Cameron to get on with policymaking in other issue areas.

Here, Mr. Cameron failed even more spectacularly.  The outcome of the referendum for the country as a whole was 52 percent for leaving versus 48 percent for staying.  That was actually a clearer result than had seemed likely from the polls in recent week, and in a majoritarian democratic system, it's of course entirely sufficient for making a decision.  But a 52-48 majority is hardly overwhelming and provides no incentive for the losing side to just "accept" the will of the democratic majority.

But that's not all.  The referendum didn't just produce an indecisive result, it actually forced into the open deep divisions within the British electorate.  One of those divisions is across age groups.  Support for leaving came predominantly from older voters; younger voters favored remaining in the EU by a substantial margin.  That is really problematic for democratic governance, since it will be the younger voters who have to live with the consequences of this referendum for much longer.  In fact, as soon as 15-20 years from now, the great majority of UK voters who participated in the referendum and are going to be still alive by then, probably will have voted to remain in the EU.

Even more immediately momentous consequences are likely to arise from the division across the four regions that make up the United Kingdom:  England, Scotland, Wales and Northern Ireland.  The national referendum results are representative only of Wales, the smallest of the four regions, where a slim majority of voters supported leaving the EU.  England, at least outside London itself, indeed voted overwhelmingly in favor of leaving, whereas strong majorities in Scotland and Northern Ireland voted for staying.  In many parts of Scotland, those majorities were well above 70 percent, so -- as predicted -- Scottish political leaders are now considering leaving the UK to remain in the EU as an independent country.  And once Scotland goes, it's hard to imagine Northern Ireland is going to be easily content with being ruled by London.

This may be the most important reason for Mr. Cameron to go.  If these developments come to pass -- and Mr. Cameron has little leverage to prevent it -- he may well go down in the history books as the prime minister who destroyed the UK after centuries, through the cynical attempt to use a referendum as a tactical ploy.


DT: So why then didn't the EU leaders agree to a "better deal" for the UK to allow Cameron to make a strong pitch for continued EU membership?

TB: UK governments have been insisting on getting a special or "better" deal ever since the early years of Margaret Thatcher, who became prime minister in 1979.  So part of it was that the other member governments were simply not willing to give the UK yet another special deal.  There was a feeling that Mr. Cameron wanted something (in fact, almost everything) for nothing.  But in part it also was a conscious rejection of his tactics, which many perceived as blackmail.  Now, it's perfectly common for governments, for example in international trade negotiations, to claim that other governments must agree to certain terms or concession, otherwise the legislature back home won't ratify the treaty.  But what Mr. Cameron tried here was different.

Mr. Cameron's tactics were perceived by European leaders something like this:  Imagine you negotiate with someone in your professional or private life.  You come to an agreement, and you even sign a contract, so that it's clear what your shared understanding was at the time.  Let's say it's an agreement with a neighbor to work together on repairing the wall that's on the property line, belongs to you both, and serves you both.  So you start, jointly and separately, dismantling the old, damaged wall.  But then, suddenly, your neighbor tells you he needs to re-negotiate the existing contract. The wall is supposed to remain common property, but it is to be moved entirely to your side of the property line, enlarging his yard while making yours smaller.  And if you don't agree, he'll just not help re-building the wall anymore.

Politically, what Mr. Cameron asked for is sort of like a state in the United States demanding to keep its two senators (with filibuster rights etc.), its representatives and all other means of exerting influence over federal legislation, while at the same insisting that federal legislation only applies in the state if the state legislature gives its separate approval of the federal legislation.  Such a system would render federal legislation meaningless and the federal political process a mess, and it surely would not be palatable to the other 49 states.


DT: Are there larger lessons to be learned from the British EU referendum?

TB: I draw two larger lessons.

First, the turmoil in financial markets should serve as a reminder just how important the political context is for economic well-being.  That politics and policy matter for economic actors and transactions is not an entirely new insight, but it's awfully easy to take political stability for granted and to remember it only when things go wrong.

Second, for decades the EU has been terribly useful to its member state governments (as have been international institutions generally, but the EU even more so) to shift blame for unpopular policies.  When governments across Europe have needed to implement painful reforms, they have, quite often, agreed on the need for such policies at the EU level; then gone home and told their voters: "The EU made me do it."  Of course, when taking popular decision -- or when painful reforms turned out to have highly beneficial consequences -- national political leaders are always quick to claim the credit for themselves. 

Coordination at the EU level, which often has been in fact crucial to making reforms successful, is almost never credited.  It is no wonder then that voters across Europe have increasingly over time gotten the impression that the EU primarily imposes political and economic costs and yields little gain.  That's been the precise —false -- narrative of the Brexit campaign. 

Political leaders in continental Europe, if they want to maintain the EU in a more democratic age, need to be prepared to make a stronger case for it, including sharing the credit in ways that lets the voters see just how critical and beneficial the European Union is.