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Materiale didattico per il corso di Theories of Regulation della prof.ssa Laura Ammannati. Trattasi dell'articolo di David Coen e Mark Tatcher dal titolo "Network Governance and Multi-level Delegation: European Networks of Regulatory Agencies" all'interno del quale sono analizzate le reti di governance dei mercati... Vedi di più

Esame di Theories of Regulation docente Prof. L. Ammannati

Anteprima

ESTRATTO DOCUMENTO

David Coen and Mark Thatcher



for a further round of delegations of co-ordinatory functions to European

regulatory networks (ERNs). Here the creation of ERNs required a double

delegation of powers and functions: one ‘ upwards’ from the newly created

IRAs and a second ‘ downwards’ from the European Commission.

The changing patterns of delegation have been seen as part of a

broader move towards ‘ network governance’ in Europe (see Schout and

Jordan Sabel and Zeitlin Eberlein and Kerwer Héritier

; ; ;

and Lehmkuhl in this issue; Christiansen itself linked to literature

),

on policy networks (see Marsh and Rhodes Rhodes Sabatier

; ;

and recent work on new forms of ‘ international market govern-

)

ance’ (see Slaughter Coen and Thatcher In the field of

; ).

regulation, three key elements of network governance can be set out here.

One is the linkage of actors from different institutional levels – national,

EU and international – and both the public and the private sector in a

form of sectoral governance (see Héritier and Lehmkuhl in this issue;

Pierre and Peters A second is a shift of power from previously

).

well-established levels to organisations or individuals whose main role is

linking and co-ordinating actors (Schout and Jordan Jordan,

;

Wurzel and Zito Peters A third element involves a change in

; ).

the mode of governance, away from hierarchy and towards consultation,

negotiation and soft law (Sabel and Zeitlin Hudson and Maher

;

Eberlein and Grande Kaiser and Prange In the context

; ; ).

of these governance discussions, ERNs have created much excitement,

with claims that they form part of moves towards ‘ network governance’

in regulation (Eberlein Eberlein and Grande

; ).

This article examines why the European Commission, national gov-

ernments and independent regulatory agencies have accepted or indeed

driven the creation of these networks of regulators, their institutional

character and their implications for regulatory governance in Europe.

Taking a principal-agent perspective as a starting point for the formal

analysis of powers and functions delegated by the European Commission

and IRAs, the central argument is that the networks represent a new

round of double delegations. They are designed to respond to the

multiplication of regulators and their uneven development by co-

ordinating implementation of regulation by member states. But, at the

formal level, the new European networks of regulators remain highly

constrained by existing actors. In particular, the European Commission

and national regulators maintain many controls over the networks, which

lack resources and rights of initiative. Such shadows of government

potentially limit the innovative scope of ERNs (Héritier and Lehmkuhl,

in this issue) and raise important questions about their ability to evolve

into strong regulatory bodies (Sabel and Zeitlin The weakness of

).

the networks and the controls of their principals help to explain why

Network Governance and Multi-level Delegation 

double delegation was agreed to by both national and EU actors: they

transferred only limited powers and retained many controls over ERNs.

It also suggests that, since their formal institutional position is weak, if the

networks are to have an impact on regulatory governance in Europe,

they must either develop informal resources and influence after formal

delegation has taken place (Sabel and Zeitlin Coen and Doyle

; )

and/or gain new powers through new delegations in order to evolve

into more powerful regulatory bodies (Majone Thatcher and

;

Coen In formal terms, analysis of European regulatory networks

).

shows that ‘ network governance’ remains very limited in EU economic

regulation.

The article begins with traditional analyses of delegation in Europe

and then sets out the principal-agent framework that will be applied by

the empirical work on ERNs. Thereafter it examines the pressures and

problems that led to the creation of ERNs, before using principal-agent

theory to chart the double delegation to ERNs and offering a systematic

analysis of their functions, powers, resources and rivals. The conclusion

links the findings back to arguments about network governance in

Europe, as well as pointing to further research that is needed given the

limits of the principal-agent framework. The article uses detailed case

studies of the two most powerful and well-established ERNs, since they

offer the maximum degree of delegation: the European Regulators

Group for telecommunications and CESR (the Committee of European

Securities Regulators) for securities. Similar developments have been

observed in energy and data protection (Eberlein and Newman but

),

these are weaker ERNs than our two cases, which therefore offer a good

test for the position of such networks.

The logic of double delegation in European regulation

European regulation has been transformed by a series of delegations. At

the supranational level, European states have given the EU progressively

greater powers to extend its regulatory activities (Majone ;

Franchino Using these powers, EU sectoral regulatory regimes

).

have grown in major markets previously largely immune from EU action,

such as telecommunications, financial services, electricity, gas, railways,

postal services and food safety (see Humphreys and Simpson ;

Bulmer et al. EU regimes involve detailed EU regulation, notably:

).

liberalisation through ending the right of member states to maintain

‘ special and exclusive rights’ for certain suppliers; and ‘ re-regulation’, i.e.

EU rules governing competition, ranging over a vast array of matters,

such as interconnection of networks, access to infrastructure and univer-

sal service. At the national level, governments have created new IRAs,

David Coen and Mark Thatcher



both sectoral bodies and general authorities, and/or have strengthened

existing IRAs (Thatcher Coen and Héritier Gilardi

b, a; ;

Levi-Faur IRAs are legally and organisationally

, ; ).

separated from government departments and suppliers, are headed by

appointed members who cannot be easily dismissed before the end of

their terms and have their own staff, budgets and internal organisational

rules (Thatcher ).

In such a context of delegation to both the EU and IRAs, from the late

onwards a further set of double delegations has taken place to

s

European regulatory networks (ERNs). As will be described in greater

detail below, these networks straddle national and supranational levels of

regulation, since they comprise national IRAs from all EU member

states, as well as the European Commission. Established through EU law

that gives them functions, they are hybrid bodies that link the EU and

national levels, and indeed bring together two sets of agents from

previous delegations, namely IRAs and the Commission. They are given

the task of co-ordinating regulators and increasing consistency of

regulation across the EU. They appear to offer an important move

towards formal network governance, one that goes beyond pre-existing

delegations and/or the reliance on soft law in informal European

networks.

How can delegation in European governance, including to ERNs, be

analysed? One approach is to use principal-agent theories. These explain

delegation by elected politicians to non-majoritarian institutions in terms

of the advantages gained by insulating IRAs from political pressures and

their ability to perform functions for elected politicians (Thatcher

and Stone Sweet Bendor, Glazer and Hammond Weingast

; ;

and Moran Principal-agent theory has been applied to delegation

).

to regulatory bodies in Europe (Thatcher Pollack

b, ; ;

Gilardi Majone It is argued that governments have delegated

; ).

both to IRAs nationally and to the EU to enhance credible commitment,

especially in sectors such as utilities, where governments seek outside

investment or other long-term commitments but where other actors such

as investors fear that governments will renege on promises (see Levy and

Spiller Another reason has been to shift blame for unpopular or

).

difficult decisions (Egan A third factor has been to increase

).

efficiency, especially in domains that are complex and technical (Majone

All of the above have at various times been used as rationales for

).

delegation to EU agencies (Pollack Franchino and have

; )

emerged to a greater or lesser extent in the recent debates surrounding

ERNs.

However, principal-agent theory points out that delegation is a

variable. Principals choose the extent of delegation and which specific

Network Governance and Multi-level Delegation 

powers are given to their agents. Equally, they maintain controls over the

agent, such as appointments, budgetary and staffing resources and the

ability to overturn agents’ decisions. Indeed, principals will be highly

concerned to minimise ‘ agency loss’ (i.e. agents acting against the

preferences of the principal) through ‘ shirking’ and ‘ slippage’. They will

seek to design institutions to minimise such agency losses.

In light of the above, we see that principal-agent theory is a useful tool

with which to perform an initial analysis of the rise of ERNs for four

reasons. Firstly, ERNs were created explicitly by IRAs and the European

Commission. Principal-agent theory’s interest-based approach directs us

to examine why these actors have chosen to delegate and offers a range

of possible reasons to explain delegation. Secondly, the EU’s legalised

nature means that delegation of powers requires a legal basis. Since the

formal institutional position of ERNs is set out, including their powers

and the controls over them, principal-agent analysis can be used to

examine their formal independence. Thirdly, application of principal-

agent theory requires definition of principals and agents. Hence it

necessitates a careful study of who is delegating and who wields controls,

a central issue in a complex polity such as the EU, especially for ERNs,

which are children of multiple parents (governments, IRAs and the

European Commission). Finally, the principal-agent framework under-

lines the importance of institutional design since principals will be highly

concerned with post-delegation events and are expected to mould their

initial choices accordingly.

But principal-agent tools must be wielded with care, and the limita-

tions of the approach understood in analysing delegation (see Coen and

Thatcher In particular, it is based on a rational choice conception

).

of institutions, which it presents as consciously and explicitly designed;

hence it excludes non-rational strategies such as copying or the evolution

of institutions (see McNamara Secondly, and closely linked, it

).

focuses on the formal structure of delegation, leaving aside informal

resources and controls. Thirdly, it examines post-delegation behaviour

through the rather narrow prism of formal principals and agents and

agency loss. It omits other actors in the ‘ regulatory space’ who may be of

great importance in the governance structures of the ERNs (Scott )

and may fail to allow for the fact that delegating actors are also active

members of the newly created bodies. It also downplays post-delegation

behaviour that may alter the original delegation (Coen and Thatcher

One example of such behaviour is the alteration of formal

).

delegation driven by endogenous factors such as learning or the

development of expertise, or exogenous factors such as technological

and economic developments or external coercion (Sabel and Zeitlin

Finally, formal institutions are overlaid with informal linkages,

). David Coen and Mark Thatcher



such as policy or epistemic communities/networks. These may modify

behaviour within a given formal institutional framework, due to factors

such as learning or new resources, representing a form of renegotiation

of the original ‘ contract’ or formal delegation (Coen and Héritier

).

All of the above caveats are important if we are to understand the

post-delegation phase of the ERNs and potential evolutionary trajectories

of new market governance. Hence principal-agent analyses can offer a

starting point, not an end point, for analysis. However, it is difficult to

analyse post-delegation factors such as learning or the impact of

exogenous changes without a sound understanding of the initial delega-

tion. Equally, policy communities or networks operate within formal

institutional frameworks or under the ‘ shadow of hierarchy’ that sets the

allocation of powers and sanctions (Héritier and Lehmkuhl, in this issue).

Thus, understanding developments in delegation involves starting with

the reasons for institutional changes and the formal framework that is put

in place.

The spread of regulatory networks in Europe

EU regulation is implemented at the national level, not by the European

Commission which has low numbers of staff and little in the way of

financial resources. National regulatory authorities (NRAs) are respon-

sible for implementing EU legislation at the national level. NRAs can be

governments or independent sectoral regulators (the IRAs). Since much

regulation concerning liberalisation and re-regulation is based on EU

legislation (albeit transposed into national law), NRAs in practice end up

implementing and interpreting much EU regulation.

However, EU regulation has said relatively little about the institutional

framework for the implementation of regulation within member states.

It has not insisted that NRAs be IRAs and hence independent of

government, nor has it laid down rules for the institutional form or

powers of NRAs. Instead, it has confined itself to insisting that regulatory

organisations be separate from suppliers, that they follow certain

decision-making principles such as ‘ fairness’ and transparency and that

they have adequate resources to fulfil their EU-created legal duties.

This initial European regulatory regime contained two batches of

delegation. One involved national governments delegating responsibili-

ties to the EU which then delegated implementation to NRAs, notably

IRAs. The other involved national governments delegating to IRAs

(Thatcher However, IRAs now have two sources of delegated

b).

tasks – both from the EU, since they are NRAs responsible for

implementing EU legislation, and from national governments – and

Network Governance and Multi-level Delegation 

hence two principals (of Egeberg Principal-agent analysis under-

).

lines that this situation could create problems for these two principals in

controlling their common agent (IRAs). Since it emphasises the impor-

tance of institutional design for IRA behaviour, it also points to the likely

cross-national differences in implementation arising from the lack of EU

regulation on the institutional form of NRAs.

Indeed, the evidence points to the existence of such difficulties.

Co-ordination of different national regulators in implementing EU

regulation was encouraged via informal agreements and working groups

at the EU level, but the Commission struggled to establish regulatory

norms and best practice. Moreover, IRAs differed in terms of their age,

powers, autonomy, finances and staffing (Coen Thatcher

; ;

Coen and Héritier Böllhoff as their institutional design and

; ),

creation varied from one country to another. In fact, after twenty years

of deregulation and liberalisation, we still observe diverse regulatory

principles and different relationships between IRAs, elected politicians

and suppliers (Thatcher Implementation of all public

a b).

policies faces problems of agency loss, as IRAs and governments putting

policies into practice enjoy discretion and the ability to alter a policy’s

original aims, but these features were magnified in the case of the EU,

because legislation is broad and EU directives are binding on member

states as to their aims but not the means of achieving them. In addition,

the Commission’s limited resources make oversight of IRAs difficult,

indeed largely ruling out any ‘ police patrol’ strategy (McCubbins and

Schwartz ).

Given difficulties in implementing EU regulation, calls were made in

the for independent ‘ Euro-regulators’ – i.e. EU-level bodies insu-

s

lated from member states and separate from the Commission (Majone

Dehousse While arguments based on co-ordinating the

, ; ).

European single market, international competitiveness and increasing

integration encouraged many economists to call for a single European

regulator, the political reality meant that it was unlikely to occur. Firstly

and most importantly, national governments were reluctant to create

such a body, even in telecommunications, the sector with the most

advanced ‘ partnership’ between member states and the European

Commission. Their opposition was firmly rooted in questions of sover-

eignty and control of political economy issues such as universal service

and national champions. However, equally significant was the unwilling-

ness on the part of politicians to open up the single market and

Maastricht treaties – with the very real risk of the treaties unravelling.

Finally, on the practical side, and at a time of smaller government and

worries about the creeping competences of the European Commission,

member states were unwilling to fund and staff an EU regulator. Running

David Coen and Mark Thatcher



parallel with this lack of ‘ political will’ was the fear of most suppliers

about the remoteness of a Euro-regulator and about losing a local IRA

(Coen and Héritier Equally, the Commission was concerned about

).

a transfer of powers to a Euro-regulator, and the powers that it could

delegate were limited by the legal doctrine of ‘ non-delegation’ (the

‘ Meroni Doctrine’; see Majone ).

As an alternative to Euro-regulators and in line with broader moves

to encourage ‘ the open method of co-ordination’ and subsidiarity (see

European Commission European regulatory co-ordination has

b),

been encouraged and fostered through the formation of formal and

informal horizontal networks of regulators (Coen and Doyle ;

Eberlein and Newman Initially, these involved informal fora of

).

sectoral public and private actors, who met infrequently and had no

formal powers or organisation. Examples include the European Electricity

Regulation Forum (the Florence Forum, started and one year later

),

the European Gas Regulation Forum (the Madrid Forum) (see Eberlein

Thereafter, informal groups of national IRAs (NIRAs) were

).

established, such as the Independent Regulators Group (IRG) for tele-

communications in FESCO (the Forum of European Securities

,

Commissions and the CEER (Council of European Energy Regula-

)

tors Both types of network were groups set up by national IRAs

).

through memoranda of understanding; they lacked legal powers or

functions. They were added to highly intergovernmental bodies such as

the CEPT (Conference of European Postal and Telecommunications

Administrations), established in whose membership goes beyond

,

that of the EU.

However, the early saw further moves that involved greater

s

formalisation of networks and a further set of delegations through the

establishment of ERNs. The ERNs are considerably more formalised and

involve greater delegation than the other networks (many of which

continue to exist alongside them). They were set up by EU legislation

(usually decisions) in key sectors such as telecommunications, financial

services and energy. Their legal basis sets out their functions, composition

and powers. They are composed of public officials from member states,

in contrast to the fora. Equally, the Commission has a significant role,

with rights to attend meetings, unlike groups of NIRAs such as the IRG

and CEER. They are given tasks of co-ordinating national regulatory

authorities through functions such as providing ‘ technical’ advice to the

Commission, consulting the industry monitoring compliance with EU

regulation, and establishing norms and benchmarks, which are forms

of soft law. However, in pushing for the creation of the ERN, the

Commission, under pressure from the IRAs and the European Parlia-

ment, made a number of important concessions on its right of veto over

Network Governance and Multi-level Delegation 

the decisions of IRAs concerning regulatory harmonisation remedies

(Coen and Doyle ).

Figure summarises major networks in a ‘ hard’ to ‘ soft’ continuum,

where ‘ hard’ refers to greater powers and formalisation of position. As

can be seen, ERNs represent a considerable move away from inter-

governmental bodies such as the CEPT. Moreover, in the past ten years

several ERNs were created; Table summarises the key developments.

It should be noted that there are continuing debates about the

evolution of institutions for regulatory co-ordination (see Thatcher and

Coen In particular, in attempting to co-ordinate the single market,

).

ERNs have found themselves caught between the objectives of their two

principals. At the European level we have the Commission pushing for

greater consistency of interpretation, greater harmonisation and more

monitoring of regulatory activity proposals. Conversely, the IRAs, while

recognising the benefits of regulatory convergence and best practice

within the single market, have tended to look to their domestic constitu-

encies and have in the past sought to limit their involvement in the

ERNs. The above tension illustrates the risks involve in this double

F Classification of networks from ‘ hard’ to ‘ soft’

. 

T European regulatory networks

. CESR ERG ERGEG CEOPS CEBS EPRA

Name Committee of European European Regulators European Regula- Committee of Euro- Committee of European Platform David

Securities Regulators Group (for Telecom- tors Group for Elec- pean Insurance and European Bank- of Regulatory

munications) tricity and Gas Occupational Pen- ing Supervisors Authorities (broad- Coen

sions’ Supervisors casting)

Creation Created in June Created in July to Created in Novem- Created in late Created in late Created in April

  

as a ‘ less bad option’ balance the increased ber to advise after the extension after the for discussion

   and

than a European securities delegation of decision- and consult on the of the Lamfalussy extension of the between regulatory

regulator, as part of the making to NRAs, and achievement of the process to banking Lamfalussy pro- authorities especially Mark

Lamfalussy process. ensure implementation single market in and insurance. cess to banking broadcasting.

as close as possible to energy. and insurance. Thatcher

the market in the mem-

ber states.

Role To improve co-ordination To improve co- Similar to ERG but Same as CESR Same as CESR To act as a forum

among European securities ordination between for electricity and except for insurance except for bank- for regulators.

regulators, act as an advi- NRAs in electronic gas. regulators. ing regulators. mainly broadcasting;

sory group to assist the communications and to no binding powers.

Commission and work to advise the Commission

ensure better implementa- on related matters.

tion of community legis-

lation in the Members’

States; includes a role in

helping draft secondary

legislation.

Relationship with A representative of the Creation of ERG was Commission can As for CESR. As for CESR. The Commission

Commission attends meet- first time EC had for- attend meetings and and the Council are

European

Commission ings except where they are mal involvement with inform European permanent observ-

deemed confidential by NRAs’ implementation Parliament of ers; European Com-

members. of EU directives. ERGEG’s work . mission contributes

substantially to the

EPRA budget.

Network Governance and Multi-level Delegation 

delegation to ERNs. As a result, discussions of Euro-regulators or

strengthened ERNs have been revived in sectors such as telecommuni-

cations and energy. Thus, for instance, Information Commissioner

Vivien Reding stated that: ‘ For me it is clear that the most effective and

least bureaucratic way to achieve a real level playing field for telecom

operators across the EU would . . . be by an independent European

telecom authority’ (Financial Times, November Equally, the

 ).

Commission in its December green paper on energy (European



Commission put forward the idea of a Euro-regulator in the

)

context of increasing fears over energy security and a desire to promote

cross-border links and competition.

While justification for the creation of Euro-regulators continues to

focus on regulatory efficiency and greater top-down co-ordination, many

real political and economic barriers to their creation continue to exist.

Under such conditions the strengthening and altering of the ERNs’

functions and powers remains a credible governance alternative and

needs to be better understood. Thus, the focus in this paper is on ERNs

and the two most established and most important, CESR and the ERG.

Looking at these two bodies in detail helps us explain who delegated

to ERNs and why, and their significance for changes in European

regulatory governance.

ERNs in telecommunications and securities: the establishment of CESR and the

ERG

CESR arose directly from the Lamfalussy commission, which was set up

by the European Commission and national governments to aid the

creation of the single market in financial services and notably for the 

Financial Services Action Plan (European Commission The

b).

initial report suggested the creation of a ‘ regulators’ group’, which was

more palatable for respondents to the Lamfalussy consultation than a

European securities regulator. The Lamfalussy report noted the draw-

backs of the existing regulators’ committee, FESCO, which had no

official status, worked by consensus, and had non-binding recommenda-

tions. Interestingly, FESCO itself advocated the creation of a more

formal regulators’ committee that could be involved in the legislative

process, offering evidence that national IRAs were in favour of CESR

(FESCO The final Lamfalussy report proposed the establish-

: ).

ment of CESR, which would both act as an advisory committee to the

European Commission and aid in bringing together IRAs and prac-

titioners to ensure more consistent implementation of Community law.

The decision to establish a new body was taken by all the EU

institutions. Thus, an ECOFIN Council communication of November


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DESCRIZIONE DISPENSA

Materiale didattico per il corso di Theories of Regulation della prof.ssa Laura Ammannati. Trattasi dell'articolo di David Coen e Mark Tatcher dal titolo "Network Governance and Multi-level Delegation: European Networks of Regulatory Agencies" all'interno del quale sono analizzate le reti di governance dei mercati in Europa.


DETTAGLI
Corso di laurea: Corso di laurea magistrale in economics and political science
SSD:
Università: Milano - Unimi
A.A.: 2011-2012

I contenuti di questa pagina costituiscono rielaborazioni personali del Publisher Atreyu di informazioni apprese con la frequenza delle lezioni di Theories of Regulation e studio autonomo di eventuali libri di riferimento in preparazione dell'esame finale o della tesi. Non devono intendersi come materiale ufficiale dell'università Milano - Unimi o del prof Ammannati Laura.

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