N o international organization in world history has attracted as much scholarly attention as the European Community (EC).l The reason is straightforward: The EC has evolved from a relatively traditional (albeit multifaceted) interstate system into a quasi-federal polity. In a word, Europe has integrated, as the linkages between politics on the EC level and politics on the national level have expanded in scope and deepened in intensity. Scholars working in diverse fields, including public law, international relations, and comparative politics, have been fascinated by the integration process, not least because of the challenge of understanding the reciprocal effect, over time, of international and domestic systems of governance.Current theoretical disagreements about how to understand European integration are largely disputes between intergovernmentalists, whose imagery is drawn from the international regime literature (Garrett 1992;Keohane and Hoffmann 1991;Moravcsik 1991Moravcsik , 1993Taylor 1983), and supranationalists, whose imagery is often federalist (Burley and Mattli 1993; Leibfried and Pierson, eds., 1995;Marks, Hooghe, and Blank 1996;Sandholtz 1993Sandholtz ,1996Sbragia 1993;Stone Sweet and Sandholtz 1997). Intergovernmentalists accord relative priority to member state governmentsrepresentatives of the national interest-who bargain with one another in EC fora to fix the terms and limits of integration. Supranationalists (especially the heirs of neofunctionalism), accord relative priority to EC institutions-representatives of the interests of a nascent transnational society-who work with public and priAlec Stone Sweet is Associate Professor and Thomas L. Brunell is a Ph.D. candidate, Department of Politics and Society, School of Social Sciences, University of California, Irvine, CA 92697-5100.The authors are grateful to the National Science Foundation, Grant No. SBR-9412531, the National Endowment for the Humanities, Grant No. FA-32480-94, the European Court of Justice, and the Robert Schuman Centre of the European University Institute for their support of this research. We also wish to thank James Caporaso, Lisa Conant, Russell Dalton, Harry Eckstein, Jonathon Golub, Bernard Grofman, Ronald Jepperson, Gary King, and Wayne Sandholtz for helpful comments.Although "European Union" is now commonly used to denote the European polity, we use "European Community" throughout. Formally, the EC remains distinct from the EU, and the EC is the most inclusive term for how the organization and its legal system function most of the time.vate actors at both the European and national levels to remove barriers to integration and to expand the domain of supranational governance. This paper is implicated in these disputes. One of our claims is that, on crucial points, the intergovernmentalists have gotten it wrong.More important, we propose a theory of European legal integration, the process by which Europe has constructed a transnational rule-of-law polity. The theory integrates, as interdependent causal factors, contrac...