Polarization in the European Parliament has mainly been attributed to the ideological dimension. The economic implications of bills have been only studied in relation to the Council. However, after the ratification of the Lisbon treaty such questions have become paramount for the Parliament. The aim of this thesis is to investigate whether legislative unity is lower for bills that would affect the budget in a way that, if passed, would change the status quo allocation of resources. I propose that the impact of such budgetary implications is dependent on the initial level of polarization within the European Parliament. In the absence of other polarizing factors, such as defections or splits within the party of the rapporteur, budgetary implications are likely to decrease legislative unity. Nonetheless, the negative effect of budgetary implications on legislative unity is mitigated by defections on behalf of the party of the rapporteur.
In order to evaluate these propositions empirically I have collected data on final votes in the 7th European Parliament. In contrast to datasets that the previous literature has relied on, this dataset contains information on the budgetary implications of the bills. Estimating a series of tobit regression models, I show that budgetary implications affect the level of cohesion in the European Parliament, but this effect is conditional upon the level of initial polarization as captured by defection from the party of the rapporteur. This finding is relatively robust, thus shedding new light on voting patterns in the European Parliament. Yet, some shortcomings remain, namely the differentiation at a theoretical level between partisan and national interests, the small magnitude of the coefficients and a potential endogenity problem. These caveats notwithstanding, it can be concluded that the behaviour of legislators is affected by economic concerns, even if to a certain extent such concerns are masked by ideological variables. It is likely that there is lower legislative unity when bills aim to alter the existing budgetary status quo. Yet, conversely, when both defection by the party of the rapporteur and budgetary implications are observed this effect is alleviated.