Between control and independence: computational modelling within EC’s trade sustainability impact assessments

ABSTRACT

Sustainability Impact Assessments (SIA) are a central instrument for evidence-based policy-making in EU trade policy. Computational modelling is the main analytical tool to assess the potential economic impacts of trade agreements. While modelling has long been undertaken by external consultancies, for recent SIAs DG Trade conducts the trade modelling itself. Against the background of this shift from external to in-house modelling, the article addresses the (perceived) roles and authority of modelling in SIAs. Based on the notion of models as boundary objects and two recent SIAs, i.e. TTIP and EU-Australia, we sketch the socio-technical arrangements of models in SIAs. We then discuss the different understandings of the role of modelling by policy-makers, experts, and stakeholders. The in-house shift exposes disagreements on the character and function of models. We further reflect on the potential implications of the in-house shift for the authority of models in SIAs. Our study suggests that there are advantages to in-house modelling, such as control, flexibility, and consistency. However, these might come at the expense of the perceived independence of policy appraisals.

KEYWORDS:

• evidence-based policy
• better regulation
• modelling for policy
• trade policy
• sustainability impact assessment

Acknowledgments

We thank all interviewees for their valuable time and contributions to the research. We are grateful to our colleagues Leo Capari and Daniela Fuchs for their comments and support in the project. Furthermore, we thank two anonymous reviewers for their constructive suggestions on how to improve this article.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. For more information see https://policy.trade.ec.europa.eu/analysis-and-assessment/sustainability-impact-assessments_en (last accessed 10.07.2022)

2. Ecorys is one of the most established economic research and consulting companies in Europe. Based in Rotterdam, Ecorys has provided economic analyses for the Commission since the introduction of SIAs.

3. Energy-Environment-Economy (E3) Model at the Global Level, Cambridge Econometrics (2014).

4. For more details, see the EU Commission’s latest reports: https://ec.europa.eu/commission/presscorner/detail/en/ip_22_4158 (last accessed 10.07.2022)

5. Often the SIA Terms of Reference state that specific sectors shall be defined in coordination with the Commission within SIA Steering Committee meetings.

6. GTAP (Global Trade Analysis Project) is a global network of researchers and policy makers producing the most widely-used global economic database. See https://www.gtap.agecon.purdue.edu/default.asp (last accessed 10.07.2022)

7. Energy-Environment-Economy (E3) Model at the Global Level, Cambridge Econometrics (2014)The model ‘was originally developed through the European Commission’s research framework programme and is now widely used in Europe and beyond for policy assessment, for forecasting and for research purposes.’ (Ecorys 2017b, p. 48)

8. CGE models are supply-side models, while E3MG is demand-side, providing information for a short time horizon (see Pollitt et al. 2007).

9. The CEPR Study (Francois et al. 2013) was the first economic modelling study conducted for the ex-ante Impact Assessment (IA), prior to the TTIP SIA inception.

10. This is a reference to a study critical of the TTIP modelling published at the time by Capaldo (2014).

Additional information

Funding

This article is based on research conducted in the project ‘CoMoPA – Computational Modelling for Policy Advice’ which received funding from the Austrian Academy of Science Innovation Fund ‘Research, Science and Society’ [no. IF_2017_13];Austrian Academy of Sciences;