The current refugee and financial crises of the EU highlight that Member States' response to these challenges differs widely. The refugee crisis has demonstrated that some Member States have effectively working asylum systems and a commitment to protecting refugees while others are overwhelmed by the current inflow of asylum-seekers and respond with restrictive policies that barely are in line with international and European human rights standards. While Member States that have effectively working asylum systems have significantly shaped EU asylum policies, implementation on the ground with those Member States that have weaker asylum systems has been rather poor. Drawing on liberal intergovernmentalism and concepts of regulatory competition and misfit, this paper argues that institutional capacity can account for the dominance of some Member States over others in both intergovernmental and transgovernmental EU negotiations. Additionally, it can explain why those less influential in EU negotiations fail to implement EU policies. Member States' diversity as regards institutional capacity is hence a major challenge for European integration today, in which EU policies systematically represent the positions of some Member States while those of others are represented to a much lesser degree. While the focus of this paper is on EU asylum policies, it also provides exemplary evidence that similar dynamics are at work in other areas of EU policy-making, including the financial crisis and environmental policies.
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