Agencies between two worlds: information asymmetry in multilevel policy-making

ABSTRACT

European co-ordination is pivotal for an effective regulation of the common market, and European administrative networks are currently mushrooming. Recent quantitative empirical research reveals that national agencies are gaining policy autonomy from their parent ministries when they become involved in European networks. However, the quantitative approach has only partially elucidated the causal mechanisms of this effect. To close this gap, this article examines two fields with dense European administrative networks: financial market regulation and energy regulation. It demonstrates that involvement in European networks exacerbates information asymmetries (particularly those regarding so-called negotiation knowledge) between agencies and their parent ministries. These information asymmetries aggravate ministries’ control problems and can even be strategically exploited by agencies, which has far-reaching consequences for the process of multilevel co-ordination.

KEY WORDS:

• Administrative networks
• agencies
• energy
• finance
• two-level game

ACKNOWLEDGEMENTS

It would like to thank Tobias Bach, Fabrizio DeFrancesco, Marian Döhler and Miriam Hartlapp as well the journal editors and three anonymous reviewers for their very constructive and helpful comments on earlier versions of this article.

Notes

1 Comparative Public Organization Data Base for Research and Analysis, see http://soc.kuleuven.be/io/cost/.

2 Other approaches, such as organization theory, argue that agencies are involved in a more complex net of actor relationships, which is why no comprehensive picture of de facto autonomy can be drawn using P–A, since P–A focusses only on a bilateral relationship (e.g., Olsen 2009). However, since this article aims to explain the changing of such a bilateral relationship – the one between ministry and agency – it focuses on P–A approaches.

3 A questionnaire was sent to all officials working in energy units of the international department, with a majority of respondents reporting an increase either in their independence or in their influence in policy-making (n = 16, response rate 44 per cent).

4 http://www.bafin.de/SharedDocs/Aufsichtsrecht/EN/Satzung/aufsicht_bmf_bafin_en.html?nn=2692286 (accessed 14 August 2014).

Additional information

Biographical note

Eva Ruffing is senior researcher at the University of Hannover.