Reshaping european regulatory space: An evolutionary analysis

Abstract

The article examines European institutions for implementing EU regulation. It assesses their development using seven different models that have been introduced or discussed for organising implementation. It argues that the development of European regulatory space has followed an evolutionary pattern involving gradual reshaping through a series of steps, with previous stages influencing later stages and institutions being built on existing structures. Despite pressures and frequent discussions of comprehensive change, existing organisations have managed to limit and shape reforms. The result has been institutional ‘layering’ and ‘conversion’ instead of streamlining, and a gradual strengthening of networks of national independent regulatory agencies. The analysis therefore suggests that evolutionary analysis based on historical institutionalist approaches seems highly appropriate to the EU. Equally, it shows how even if there are strong demand-side pressures for centralisation of regulation, existing institutional arrangements and organisations limit and shape the supply of new institutions, so that debates about radical change coexist with a fragmented, cluttered and complex European regulatory space.

Acknowledgements

The authors wish to thank ARENA for hospitality at the ARENA conference in Oslo of March 2007; they also thank Kenneth Armstrong, Dan Kelemen, Morten Egeberg and Colin Scott for comments; an initial version this paper was presented at the conference on Policy Instruments, CEVIPOF, Paris, June 2007; the work arises out of the NewGov project CIT1-CT-2004-506392. Over the course of the project the authors are alternating name order for different publications. This does not reflect input which is equal for both authors.

Notes

1. Given general usage, we refer here to the EU, but most regulation takes place under the European Community pillar of the EU.

2. Borzel (2002), Treib (2007) and Mastenroek (2003) illustrated that 60 per cent of directives are transposed late, while Steunenberg (2006) demonstrated empirically that while high-level players decide on policy, the lower level players have wide discretion in shaping and transposing the policy.

3. Among the vast literature, see for instance Sandholtz and Stone Sweet (1998) and Moravscik (1999); for recent principal–agent analysis see Pollack (2003).

4. For approaches focusing on rational comprehensive analyses and grand bargains, see for instance Moravscik (1998) on Treaty bargaining.

5. For discussions of ‘regulatory space’, see Hancher and Moran (1989) and Scott (2001); for ‘administrative space’, see Olsen (2003), although he is mostly concerned with convergence, whereas here we focus on the institutions of such space; we omit self-regulation since this is not formally a mode of implementing EU law, although it may be a mode of regulation. For a recent discussion, see Cafaggi (2006); for a comprehensive analysis of different modes of regulation in the EU, see Scott (2005).

6. For analyses of advantages and disadvantages of different models, see Coen and Doyle (2000).

7. Indeed, we can conceive of a situation in which greater centralisation of formal powers actually led to less power for the central EU body or indeed less effective implementation.

8. For a full discussion of the role of the European Commission in coordinating infringement proceedings and ECJ oversight procedure see Borzel (2002) and Falkner et al. (2005).

9. In terms of EU governance debates Sabel and Zeitlin (2007) would argue that these new networks are an experimentalist form of governance, whereas Héritier and Knill (2008) would argue that that these networks operate under a shadow of hierarchy that constrains development.

10. Similar forces were also seen to be at work in the modernisation of European Competition Policy (see Wilks 2005).

11. Information gathering agencies, such as the European Agency for Safety at Work are excluded, see Kelemen (2002) for the division between these and regulatory agencies.

12. Majone (1997, 2005) has been a strong proponent of the single regulatory model on the grounds of political and economic efficiency.

13. See Eising and Jabko (2000) for a detailed discussion of member state bargaining and Commission compromises in the creation of the energy liberalisation directives.

14. Although degree of detail must be distinguished from coercion, EU directives remained legally binding and if anything, became more coercive as their scope was extended into new sectors such as the utilities (see Kelemen 2004).

15. For a discussion how member states played the patchwork regulation see Héritier et al. (2001), and for how NRAs and Business managed the multilevel regulatory environment see Coen and Héritier (2001).

16. In particular, the Commission was empowered to veto two types of decisions by IRAs concerning competition (definitions of relevant markets and significant market power) that affected inter-member state trade, under Article 7 of the Framework Directive (European Parliament and Council 2002).

17. For a parallel discussion in relation to ERAs, see Kelemen (2002).

18. For instance, in telecommunications, a BT official noted ‘opposition in the industry to creating a new layer of bureaucracy at a time when firms were actually calling for less regulation’ (Financial Times 16 September 2000; cf. Coen and Doyle 2000).

19. For a principal-agent analysis of the new system, see Visscher et al. (2008).

20. Bangemann pressed over a considerable period for the creation of a EU telecommunications industry watchdog (Financial Times 3 July 1996, 19 December 1997, 11 March 1999; European Voice 11 March 1999).

21. The definitions of relevant market and of significant market definition and SMP definition Article 7 of EC/2002/21; Interviews with Commission and Telecommunication Regulator 2.

22. See for instance criticisms of the ERG for being based on the ‘lowest common denominator’ by the Information Commissioner (European Voice 22 February 2007) and criticism on energy (Commission 2007a: 8–9).

23. For instance, Ofcom in telecommunications argued that ‘the balance of powers between the Commission and national regulators is broadly right’ (Financial Times 17 November 2006); the ERG opposed ‘uniformity’ in the application of remedies (see ERG 2006a,b).