4
European Governance
Governing with or without the State?
Tanja A. Börzel*
i. introduction
The European Union (EU) used to be considered a unique system of multi-level
governance that cannot be compared to any other form of political order at the
national or international level.1
There is broad agreement that the EU is and has
always been more than an international organisation of states, but it is not and probably
never will be a state of its own right.2
Political scientists have shown a remarkable
creativity in developing new concepts to capture the allegedly sui generis nature of
the EU, describing it as a ‘new, post-Hobbesian order’,3
‘a post-modern state’,4
or ‘a
network of pooling and sharing sovereignty’.5
In recent years, students of the EU have
started to adopt a more comparative approach. The governance literature appears to
be particularly attractive for studying the political institutions and policy processes in
*
I wish to thank Fritz Scharpf for his very helpful comments on a previous version of this
chapter.
1
D. J. Puchala, ‘Of Blind Men, Elephants and International Integration’ (1972) 10 Journal of
Common Market Studies 267–84; J. A. Caparaso, ‘The European Union and Forms of State:
Westphalian, Regulatory or Post-modern?’ (1996) 34 Journal of Common Market Studies 29–52.
2
W. Wallace, ‘Less than a Federation, More than a Regime: The Community as a Political
System’, in H. Wallace, W. Wallace, and C. Webb (eds), Policy-Making in the European
Community (John Wiley: Chichester, 1983), 43–80; see also Puntscher Rieckmann in this
volume.
3
P. C. Schmitter, The European Community as an Emergent and Novel Form of Political
Domination. Working Paper No. 26 (Madrid: Juan March Institute, 1991).
4
J. G. Ruggie, ‘Territoriality and Beyond: Problematizing Modernity in International
Relations’ (1993) 47 International Organization 139–74; J. A. Caporaso, ‘The European Union
and Forms of the State: Westphalia, Regulatory or Post-Modern?’ (1996) 34 Journal of
Common Market Studies 29–52.
5
R. O. Keohane and S. Hoffmann (eds), The New European Community: Decisionmaking and
Institutional Change (Boulder, Col.: Westview Press, 1991).
European Governance. Tanja A. Börzel.
© Oxford University Press 2010. Published 2010 by Oxford University Press.
74 Tanja A. Börzel
the EU by offering concepts that can be equally applied to interstate institutions and
national states. Thus, the EU has been frequently portrayed as a system of ‘network
governance’,6
where the authoritative allocation of values is negotiated between state
and societal actors,7
which have also been invoked in reference to the ‘negotiating
state’8
and international politics as ‘governance without government’.9
This chapter, by contrast, argues that the EU’s ‘nature of the beast’10
is not to be
captured by one particular type of governance. Rather, the EU combines forms of
governance, which involve the member states to different degrees and are best characterised
as ‘governance with the state’. First, governance without the state, where
state and non-state actors cooperate on a non-hierarchical basis or non-state actors
coordinate among themselves to make public policies, is hard to find in the EU. EU
policies are largely formulated and implemented by state actors. Secondly, the EU
seems to have the power to govern without the state. Its supranational institutions
allow the adoption and enforcement of legally binding decisions without the consent
of (individual) member states. While this is often overlooked in the literature, the
EU still lacks coercive power—otherwise it would be a state. Being able to adopt
decisions against the will of the member states, the EU still relies on their voluntary
compliance and the willingness of their courts and enforcement authorities to make
EU decisions effective. Thus, the EU is first of all governance with the state rather
than without it. This has serious implications for the constitutional structure of the
EU, both with regard to its effectiveness and its legitimacy.
The chapter starts with conceptualising the relationship between state and
governance. It draws on the distinction between government or governance by the
state and governance without the state. The second part uses this typology to study
European governance. The analysis will show that EU policies are largely formulated
and implemented in multiple overlapping negotiation systems that mostly involve
supranational and state actors and give little room for business and civil society.
While forms of private self-regulation or public–private co-regulation abound in the
member states as well as in global politics, we hardly find such forms of governance
without the state at the EU level. Thus, the EU is best described as governance with
the state, whereby the role of the state varies significantly across policy areas. The
6
B. Kohler-Koch, ‘Catching up with Change: The Transformation of Governance in the
European Union’ (1996) 3 Journal of European Public Policy 359–80.
7
Cf B. Kohler-Koch and R. Eising (eds), The Transformation of Governance in Europe (London:
Routledge, 1999); C. Ansell, ‘The Networked Polity: Regional Development in Western
Europe’ (2000) 13 Governance 303–33; A. Schout and A. Jordan, ‘Coordinated European
Governance: Self-Organizing or Centrally Steered?’ (2005) 83 Public Administration 201–20.
8
F. W. Scharpf, Games Real Actors Play: Actor-Centered Institutionalism in Policy Research
(Boulder, Col.: Westview Press, 1997).
9
J. N. Rosenau and E.-O. Czempiel (eds), Governance without Government: Order and Change in
World Politics (Cambridge: Cambridge University Press, 1992).
10
T. Risse-Kappen, ‘Exploring the Nature of the Beast: International Relations Theory and
Comparative Policy Analysis Meet the European Union’ (1996) 34 Journal of Common Market
Studies 53–80.
European Governance 75
chapter concludes by discussing some implications of this governance constellation
for the European constitutional structure. Since questions of legitimacy are covered
by the contributions of Scharpf and Puntscher Rieckmann, the focus will be placed
on the ‘problem-solving gap’ caused by the lack of governance by the state and the
challenges it poses for the constitutional design of the EU.
ii. governance and the state
The governance concept has made quite a career in European Studies. It would go
beyond the scope of this chapter to provide an overview of the European governance
literature.11
This section builds on existing concepts and develops a governance
typology which allows for a classification of European governance and its
systematic comparison with state and interstate systems.
Following the work of Renate Mayntz and Fritz W. Scharpf, this chapter understands
governance as institutionalised modes of coordination through which
collectively binding decisions are adopted and implemented.12
Governance consists
of both structure and process.13
In terms of structure, governance relates to institutions
and actor constellations. Here, the literature usually distinguishes between
hierarchy, market (competition systems),14
and networks (negotiation systems).15
These are ideal types, which differ with regard to the type of actors involved and
the degree of coupling between them. Governance as process, in turn, points to the
11
Cf I. Bache and M. Flinders (eds), Multi-level Governance (Oxford: Oxford University Press,
2004); B. Kohler-Koch and B. Rittberger, ‘The “Governance Turn” in EU Studies’ (2006) 44
Journal of Common Market Studies 27–49; L. Hooghe and G. Marks, Multi-Level Governance and
European Integration (Lanham: Rowman & Littlefield, 2001).
12
R. Mayntz and F. W. Scharpf, ‘Steuerung und Selbstorganisation in staatsnahen Sektoren’,
in R. Mayntz and F. W. Scharpf (eds), Gesellschaftliche Selbstregulierung und politische Steuerung
(Frankfurt: Campus, 1995), 9–38; R. Mayntz, ‘Governance im modernen Staat’, in
A. Benz (ed), Regieren in komplexen Regelsystemen: Eine Einführung (Wiesbaden: VS Verlag für
Sozialwissenschaften, 2004), 65–75.
13
Scharpf, above n 8; Mayntz and Scharpf, above n 12.
14
In the political science literature, markets are not regarded as governance since they are a
‘spontaneous order’ (Hayek) that leaves ‘no place for “conscious, deliberate and purposeful”
effort to craft formal structures’ (O. E. Williamson, The Mechanisms of Governance (Oxford:
Oxford University Press, 1996), at 31). Yet, market mechanisms can be institutionalised to
coordinate actors behaviour through competition (A. Benz, ‘Politischer Wettbewerb’, in
A. Benz et al (eds), Handbuch Governance Theoretische Grundlagen und empirische
Anwendungsfelder (Wiesbaden: VS Verlag für Sozialwissenschaften, 2007), 54–67). This
chapter uses the concept of competition systems to describe the institutionalisation of
market-based modes of political coordination.
15
The governance literature has identified other forms of social order, such as clans
(W. G. Ouchi, ‘Market, Bureaucracies, and Clans’ (1980) 25 Administrative Science Quarterly
129–41) and associations (P. C. Schmitter and G. Lehmbruch (eds), Trends towards Corporatist
Intermediation (London: Sage, 1979); W. Streeck and P. C. Schmitter (eds), Private Interest
Government: Beyond Market and State (London: Sage, 1985). Like networks, this chapter
conceptualises them as negotiation systems (see below).
76 Tanja A. Börzel
modes of social coordination by which actors seek to achieve changes in (mutual)
behaviour. Hierarchical coordination usually takes the form of authoritative decisions
(eg administrative ordinances, court decisions). Actors must obey. Nonhierarchical
coordination, by contrast, is based on voluntary compliance. Conflicts
of interests are solved by negotiations. Voluntary agreement is either achieved by
negotiating a compromise and granting mutual concessions (side-payments and
issue-linkage) on the basis of fixed preferences (bargaining), or actors engage in
processes of non-manipulative persuasion (arguing), through which they develop
common interests and change their preferences accordingly.16
Institutions are crucial in shaping both governance structures and governance
processes. On the one hand, they determine the degree of coupling between actors by
defining their relationships and allocating resources to them. On the other hand, institutions
set the framework for the modes of coordination on which actors draw.17
In
hierarchical structures, for instance, hierarchical and non-hierarchical modes of coordination
can be used. Institutions bestow upon state actors the power to unilaterally
impose decisions, but they can refrain from invoking their hierarchical authority
when they bargain or argue with others. Negotiation and competition systems, by
contrast, can only rely on bargaining and arguing. Which mode of coordination
actors choose within their institutional limits, is, again, influenced by institutions,
which render certain modes more appropriate or socially acceptable than others.
A comprehensive concept of governance as structure and process helps us delineate
governance by, with, and without the state.18
The essence of governance by the state is hierarchy.19
Hierarchies are based on an
institutionalised relationship of domination and subordination, which significantly
constrains the autonomy of subordinate actors (tight coupling) and allows for hierarchical
coordination. Hierarchy can force actors to act against their self-interest.20
They may be either physically coerced by the use of force or legally obliged by legitimate
institutions (law). Hierarchical coordination does not leave actors either the
possibility of exit or voice.21
Unlike arguing and bargaining, hierarchical coordination
does not seek to influence actors’ choices but to unilaterally constrain or nullify
them. Thus, hierarchy is based on coercion. While the state has many attributes, the
16
A. Benz, Kooperative Verwaltung: Funktionen, Voraussetzungen, Folgen (Baden-Baden: Nomos,
1994), at 118–27; T. Risse, ‘“Let’s Argue!” Communicative Action in International Relations’
(2000) 54 International Organization 1–39.
17
Scharpf, above n 8.
18
The distinction draws on the work of Michael Zürn, who refers to governance by, with,
and without government (M. Zürn, Regieren jenseits des Nationalstaates (Frankfurt am Main:
Suhrkamp, 1998)).
19
R. A. W. Rhodes, Governing without Governance: Order and Change in British Politics
(Cambridge: Cambridge University Press, 1996); Scharpf, above n 8.
20
Scharpf, above n 8, at 171.
21
A. O. Hirschman, Exit, Voice, and Loyalty: Responses to the Decline in Firms, Organizations,
and States (Cambridge, Mass.: Harvard University Press, 1970).
European Governance 77
monopoly of coercive public power ultimately distinguishes it from other forms of
political organisations.
Governance without the state, by contrast, is based on equal relations between
actors and the absence of coercion. They may differ with regard to their bargaining
power, but no actor is subject to the will of the other.22
The institutions of
competition systems do not provide for any structural coupling. Actors have full
autonomy to coordinate themselves through the mutual adjustment of their
actions. Negotiation systems, finally, are characterised by loose coupling. Social
coordination is based on mutual agreement. Unlike in formalised negotiation
systems, the symmetrical relations of networks are not defined by formal institutions,
but constituted by mutual resource dependencies and/or informal norms
of equality.23
In sum, governance without the state refers to the involvement of non-state
actors (companies, civil society) in the provision of collective goods through nonhierarchical
coordination. It ranges from consultation and co-optation, delegation,
and co-regulation/co-production to private self-regulation in and outside the
control of the state. Governance with and without the state, hence, can involve
state actors as long as they refrain from using their coercive powers. In order to
avoid conceptual overstretch, however, certain forms remain outside this definition
(Fig 4.1). Governance without the state does not cover lobbying and mere advocacy
activities of economic and social actors aimed at state actors or supranational
and international organisations.24
Non-state actors who are not active participants
in negotiating or competition systems pose few challenges to existing concepts and
theories in political science and international relations. Also excluded are those
arrangements among non-state actors that
• are based on self-coordination and do not aim at the provision of common
goods and services (markets);
22
Heavy power asymmetries can, however, reduce the choices of actors (by imposing
prohibitive costs) so much so that coordination becomes largely hierarchical.
23
Networks are then informal, ie non-formalised negotiation systems (cf B. Marin and
R. Mayntz (eds), Policy Network: Empirical Evidence and Theoretical Considerations (Frankfurt
am Main: Campus, 1991)). The literature discusses other characteristics of networks,
including actor constellations that equally involve public and private actors (R. Mayntz,
‘Modernization and the Logic of Interorganizational Networks’, in J. Child, M. Crozier,
and R. Mayntz (eds), Societal Change between Market and Organization (Aldershot: Avebury,
1993), 3–18) or relations based on trust, which favour problem solving over bargaining as
the dominant action orientation (Scharpf, above n 8, at 137–8; A. Benz, Der moderne Staat:
Grundlagen der politologischen Analyse (Munich: Oldenbourg, 2001), at 171). However, such a
narrow concept of network governance is flawed both in theoretical and empirical terms (cf
T. A. Börzel, ‘Organising Babylon: On the Different Conceptions of Policy Networks’ (1998)
76 Public Administration 253–73).
24
Cf T. A. Börzel and T. Risse, ‘Public-Private Partnerships: Effective and Legitimate Tools
of Transnational Governance?’ in E. Grande and L. W. Pauly (eds), Complex Sovereignty: On
the Reconstitution of Political Authority in the 21st Century (Toronto: University of Toronto
Press, 2005), 195–216.
78 Tanja A. Börzel
• produce public goods and services as unintended consequences (for example
rating agencies) or provide public ‘bads’ (mafia, drug cartels, transnational
terrorism).
This chapter argues that the EU hardly features any forms of governance without
the state. Nor do we find much governance by the state. Rather, the EU mostly
constitutes forms of governance with the state.
iii. european governance: governance with rather
than without the state
The following analysis draws on some of my previous work in which I attempt to
map the governance in the EU.25
For the purpose of this chapter, I have simplified my
original typology collapsing the different forms of EU governance into governance
by, with, and without the state.
25
T. A. Börzel, ‘European Governance: Markt, Hierarchie oder Netzwerk?’ in
G. F. Schuppert, I. Pernice, and U. Haltern (eds), Europawissenschaft (Baden-Baden: Nomos,
Source: based on Börzel and Risse, above n 24.
Public regulation
no involvement of private actors
Lobbying of public actors by private actors
private actors seeking to influence public actors
Consultation/Cooptation of private actors
participation of private actors in public decision-making
(for example private actors as members of state
delegation; outsourcing)
Co-Regulation/Co-production of public and private actors
Joint decision-making of public and private actors,
(for example social partners in tripartite concertation;
public–private partnerships)
Delegation to private actors
participation of public actors
(for example contracting-out; standard-setting)
Private self-regulation in the shadow of hierarchy
involvement of public actors
(for example voluntary agreements)
Public adoption of private regulation
output control by public actors
(for example erga omnes effect given to collective agreements of social partners)
Private self-regulation
no public involvement
(for example private regimes; social partner autonomy)
governance by the state
governance without the state
Figure 4.1
Governance with(out) the state: the non-hierarchical involvement of non-state
actors.
European Governance 79
Governance without the state
The EU is often treated as the prototype of governance without the state. Yet, if
at all, we only find very weak forms of the non-hierarchical involvement of nonstate
actors in EU policy making. Consultation and co-optation of economic and social
actors certainly abound in the EU, particularly in the committees and working
groups of the Commission and the Council.26
Yet, while non-state actors have some
say in the formulation and implementation of EU policies, the member states and
the Commission maintain a firm grip on the policy process and its outcomes.
Co-regulation is thus almost impossible to find. While non-state actors are regularly
involved in EU policy-making, they are hardly engaged on ‘a more equal footing’.27
A rare exception is the partnership principle in structural policy, which explicitly
requires the involvement of social partners in inter and transgovernmental negotiation
systems. Their representatives are members of the management committee
for the European Social Fund, in which the member states are represented as well
and which is chaired by the European Commission.28
There are also several EU
regulations providing for the participation of the social and economic partners at
the various stages of programming under the Social and the Regional Development
Funds.29
Moreover, a recent regulation extends the partnership principle to include
civil society.30
The extent to which business and civil society are actually involved,
however, is contested in the literature and varies significantly across the member
states. Overall, it seems that they still have a marginal role compared to national,
regional, and local governments.31
Non-state actors are equally marginalised in the Open Method of Coordination
(OMC), the epitome of so-called ‘new’ non-hierarchical modes of governance in
the EU.32
OMC was first applied in EU employment policy. It emerged as an innovative
way to implement the so-called Lisbon Strategy, which the European Council
2005), 613–41; id, ‘European Governance: Verhandlungen und Wettbewerb im Schatten von
Hierarchie’ (2007) Politische Vierteljahresschrift, Sonderheft ‘Die Europäische Union Governance
und Policy-Making’ 61–91; cf T. A. Börzel, ‘European Governance: Negotiation and
Competition in the Shadow of Hierarchy’ (forthcoming) Journal of Common Market Studies.
26
T. Christiansen and S. Piattoni (eds), Informal Governance in the European Union
(Cheltenham: Edward Elgar, 2003).
27
B. Kohler-Koch, ‘The Evolution and Transformation of European Governance’, in
B. Kohler-Koch and R. Eising (eds), The Transformation of Governance in the European Union
(London: Routledge, 1999), 14–35, at 26.
28
Treaty Establishing the European Community, Art 147.
29
Cf European Council, Regulation 1260/99, Ch IV, Art 8.
30
European Council, Regulation No 1083/2006.
31
Cf Börzel forthcoming, above n 25.
32
Cf D. Hodson and I. Maher, ‘The Open Method as a New Mode of Governance:
The Case of Soft Economic Policy Co-ordination’ (2001) 39 Journal of Common Market
Studies 719–46.
80 Tanja A. Börzel
adopted in 2000 to promote economic growth and competitiveness in the EU.33
OMC has facilitated the coordination of national policies in areas where member
states have been unwilling to grant the EU political powers and additional spending
capacity, particularly in the field of economic and social policy.34
In the meantime,
it has travelled beyond Lisbon and is applied in justice and home affairs,35
health
policy,36
environmental policy,37
and tax policy.38
OMC is in principle open for the
participation of non-state actors. Yet, in practice, they are neither involved in the
formulation of joint goals at the EU level nor in their implementation at the national
level.39
This is not surprising since it is precisely the intergovernmental and voluntaristic
nature that makes OMC an acceptable mode of policy coordination for the
member states in sensitive areas.
Delegation is more prominent in the EU, although it has been around for quite
some time, at least when it comes to technical standardisation. The setting of
EU technical standards is mostly voluntary since supranational harmonisation of
health and security standards is confined to national regulations concerning the
public interest.40
For other areas, the Council has delegated the task to develop
technical standards to three European private organisations, which are composed
of representatives from the member states. Since national standardising organisations
are mostly public, however, self-regulation is regulated by the EU and subject
to the control of the member states through comitology. It hardly involves nonstate
actors.
This also holds for other areas of risk regulation, where regulatory networks
have emerged in response to liberalisation and privatisation in the Single Market.
33
Cf K. A. Armstrong, I. Begg, and J. Zeitlin, ‘JCMS Symposium: EU Governance after
Lisbon’ (2008) 46 Journal of Common Market Studies 413–50.
34
Hodson and Maher, above n 32.
35
A. Caviedes, ‘The Open Method of Co-ordination in Immigration Policy: A Tool for
Prying Open Fortress Europe?’ (2004) 11 Journal of European Public Policy 289–310.
36
S. Smismans, ‘New Modes of Governance and the Participatory Myth’ (2006) 1 European
Governance Papers <http://www.connex-network.org/eurogov/pdf/egp-newgov-N-06-01.
pdf>.
37
A. Lenschow, ‘New Regulatory Approaches in “Greening” EU Politics’ (2002) 8 European
Law Journal 19–37.
38
C. M. Radaelli and U. S. Kraemer, ‘Governance Areas in EU Direct Tax Policy’ (2008) 46
Journal of Common Market Studies 315–36.
39
Hodson and Maher, above n 32; M. Rhodes, ‘Employment Policy’, in H. Wallace, W.
Wallace, and M. A. Pollack (eds), Policy-Making in the European Union (Oxford: Oxford
University Press, 2005), 279–304, at 295–300; S. Borrás and K. Jacobsson, ‘The open
Method of Co-ordination and New Governance Patterns in the EU’ (2004) 11 Journal of
European Public Policy 185–208, at 193–4; M. Büchs, ‘How Legitimate is the Open Method of
Co-ordination?’ (2008) 46 Journal of Common Market Studies 765–86.
40
T. Gehring and M. Kerler, ‘Institutional Stimulation of Deliberative Decision-Making:
Division of Labour, Deliberative Legitimacy and Technical Regulation in the European
Single Market’ (2008) 46 Journal of Common Market Studies 1001–23.
European Governance 81
These market-making processes require some form of re-regulation at the EU and
the national level to ensure fair competition and in order to correct or compensate
undesired market outcomes. Since the member states have been reluctant to transfer
regulatory powers to supranational institutions, particularly in the area of economic
regulation, market-creating and market-correcting competencies are usually delegated
to independent regulatory agencies or ministries at the national level.41
To fill
the ‘regulatory gap’ at the EU level, national regulatory authorities have established
informal networks to exchange information and develop ‘best practice’ rules and
procedures to address common problems.42
We find these networks in an increasing
number of sectors, such as pharmaceuticals and foodstuffs, but also beyond risk
regulation, including competition, public utilities, financial services or data protection,
and law enforcement. While these regulatory and operational networks may be
open to the participation of non-state actors (eg providers and consumers), they are
transgovernmental rather than transnational in character.
The strongest form of delegation in the EU is the Social Dialogue.43
In selected
areas of social policy, the social partners have the right to conclude agreements,
which can be turned into European Law. Moreover, the EU cannot take legal action
without consulting the social partners. If the latter abstain from collective bargaining,
however, the EU is free to legislate. While this form of Euro-corporatism is
unique, the negotiation procedure under the Social Dialogue has hardly been
invoked.44
Despite qualified majority voting in the Council, member states still are
too diverse to agree on EU legal standards. In the absence of a credible shadow of
hierarchy, employers had little incentive to negotiate with the trade unions. Moreover,
the social partners themselves have faced problems in reaching agreement
among their members since industrial relations are still organised along national
lines. As a result, delegation has hardly been used in social policy.
Other forms of delegated or regulated private self-regulation in the shadow
of hierarchy are equally rare. While voluntary agreements at the national level
abound, they have been hardly used by European business organisations to prevent
EU regulation; if at all, they are found in the area of environmental and consumer
protection.45
Private self-regulation or true governance without the state, finally, is almost impossible
to find at the EU level. Non-state actors may coordinate themselves without
having a mandate from or being under the supervision of supranational institutions.
The EU is crowded with a multitude of non-state actors, representing both civil
41
D. Coen and A. Héritier (eds), Refining Regulatory Regimes in Europe: The Creation and
Correction of Markets (Cheltenham: Edward Elgar, 2006).
42
D. Coen and M. Thatcher, ‘Network Governance and Multi-level Delegation: European
Networks of Regulatory Agencies’ (2008) 28 Journal of Public Policy 49–71.
43
Treaty Establishing the European Community, Arts 138–9.
44
Rhodes, above n 39.
45
Cf A. Héritier and S. Eckert, ‘New Modes of Governance in the Shadow of Hierarchy:
Self-Regulation by Industry in Europe’ (2008) 28 Journal of Public Policy 113–38.
82 Tanja A. Börzel
society and business. They have organised themselves at the EU level in umbrella
organisations. The so-called Euro-groups have the possibility to take binding decisions
for their members, eg by adopting codes of conduct, negotiating voluntary
agreements, and monitoring compliance. But they seldom have embarked on
collective action and, if they do, the shadow of hierarchy looms. The few EU-level
voluntary agreements have been negotiated to avoid stricter EU regulation.46
Rather
than engaging in private interest government, business and civil society organisations
focus on individual and collective lobbying of decision makers, both at the
EU and the national level.47
The emergence of governance without the state is
further impaired by European peak associations and umbrella groups being organised
around and often divided along national lines, which in turn renders consensus
among its members difficult.
To conclude, governance without the state has proliferated far less in the EU than
the ever-growing literature would lead us to expect. Business and civil society do play
a role in EU policy making but political decisions are largely taken and implemented
by inter and transgovernmental actors. Delegation and private self-regulation in and
outside the shadow of hierarchy are equally rare. The dominance of state actors
distinguishes European governance from both governance within and beyond the
state. At the member state as well as at the international level, private actors play a
much more prominent role in policy making than in the EU.48
Governance with the state
While the member states are still the Masters of the Treaties and dominate EU
policy making at all levels, the EU does have the power of hierarchical coordination.
The supranational institutions of the EC-Treaty (ECT) provide ample possibility
for hierarchical coordination where supranational actors have the power to take
legally binding decisions without requiring the consent of the member states. The
most prominent case is the European Central Bank (ECB), which authoritatively
determines EU monetary policy.49
The presidents of the national central banks are
represented in the ECB Council. However, they are not subject to any mandate by
the member states.50
Likewise, the Commission can conduct investigations into cases
of suspected distortion of competition caused by member states (eg by state aid) and
anti-competitive practices of private actors (eg cartel formation), impose sanctions,
and take legal recourse to the European Court of Justice (ECJ).51
The Commission
can enforce competition rules set by Articles 81, 87 ECT, and a series of directives
46
Ibid.
47
D. Coen and J. Richardson (eds), Lobbying the European Union: Institutions, Actors, and Issues
(Oxford: Oxford University Press, 2009).
48
Cf Börzel forthcoming, above n 25.
49
Treaty Establishing the European Community, Art 105 ECT.
50
Ibid, Art 108.
51
Ibid, Art 82 ECT; Art 88 ECT.
European Governance 83
and regulations, which have been adopted by qualified majority in the Council (since
the Amsterdam Treaty). In the case of public undertakings, it can also adopt legally
binding regulations without the consent of the member states, if privileges of public
undertakings constitute a major obstacle to the completion of the Single Market.52
Finally, the European Court of Justice (ECJ) can bind the member states against
their will through their interpretation of European law—a power that extends
beyond market-making policies. Through dynamic interpretation of the Treaties,
the ECJ has expanded European regulation beyond negative integration. For
instance, the ECJ empowered the EC to enact social and environmental regulations
at a time when the member states had not yet bestowed the EC with the necessary
competencies.53
In a similar vein, the ECJ established the principle of state and
damages liability for violations of European Law that requires the member states to
provide financial compensation for damages caused by breaches of European law.54
In sum, the EU entails institutionalised rule structures which offer the Commission,
the European Court of Justice, and the European Central Bank ample opportunities
for hierarchical coordination. Yet, although the EU can legally bind the
member states against their will, it lacks the coercive power to bring them into
compliance. Unlike modern states, the EU does not have a legitimate monopoly
of force.55
Ultimately, the effectiveness of EU Law rests on the voluntary compliance
of the member states. Member state governments can be held responsible by
the Commission and the ECJ for any breaches of EU Law. And domestic courts
and enforcement authorities have to execute ECJ judgments. This is particularly
the case under the preliminary ruling procedures,56
where domestic courts refer
cases of conflict between national and European law to the ECJ to settle the issue.
Yet member states and their enforcement authorities can openly or tacitly defy
the rulings of the ECJ or the authoritative decisions of the Commission. This may
entail material (eg loss of structural funds) and reputational costs. But if member
states are willing to bear such costs, there is nothing the EU can do, particularly
when dealing with the more powerful member states which are more likely to resist
compliance with EU law.57
Even where the EU has exclusive hierarchical powers of decision, it must rely
on member states for their enforcement. The role of the latter increases under the
so-called Community Method, where the Commission holds the exclusive right of
52
Ibid, Art 86, para 3.
53
J. McCormick, Environmental Policy in the European Union (Basingstoke: Palgrave, 2001).
54
P. P. Craig, ‘Once More unto the Breach: The Community, the State and Damages
Liability’ (1997) 113 Law Quarterly Review 67–94.
55
Cf J. A. Caporaso and J. Wittenbrinck, ‘The New Modes of Governance and Political
Authority in Europe’ (2006) 13 Journal of European Public Policy 471–80.
56
Treaty Establishing the European Community, Art 234.
57
T. A. Börzel et al, Recalcitrance, Inefficiency, and Support for European Integration: Why
Member States Do (Not) Comply with European Law (CES Working Paper 148; Cambridge,
Mass.: Harvard University, 2007).
84 Tanja A. Börzel
legal initiative but the Council decides by qualified majority. This applies to almost
all policies under the First Pillar but also to the framework decisions under the Third
Pillar.58
Since majority voting entails an element of hierarchy by binding a minority of
member states against their will, the core areas of EU policy making are embedded
in hierarchical structures. At the same time, the member states retain a prominent
role in the policy process. While the Community Method grants the Commission
and the European Parliament a significant say, EU decision making is still dominated
by the Council. The Committee of Permanent Representatives, numerous Council
working groups, as well as the expert committees of the Commission prepare legal
proposals and execute Council decisions (comitology). While the ECJ has the power
of judicial review, it is again the member states which have to implement and enforce
EU law.
The role of the member states is the strongest under the Second and Third Pillars.
The (European) Council usually decides by unanimity and shares the right of initiative
with the Commission. The Parliament is at best consulted and the ECJ has
only limited power of judicial review.59
The areas of inter and transgovernmental
cooperation, which the member states explicitly sealed against even the shadow of
supranational hierarchy, largely correspond to the ideal type of interstate negotiation
systems. European decisions rest on the voluntary coordination of the member
states (unanimity or consent) and often do not have legally binding character (ie they
constitute ‘soft law’). They are prepared and accompanied by inter and transgovernmental
networks, which act free from the shadow of hierarchy cast by supranational
institutions. This is not only true for the Second and parts of the Third Pillar, but
also for selected areas under the First Pillar (parts of social policy, macroeconomic
and employment policy, research and development, culture, education, taxation),
in which the EU has no or only very limited competencies and the influence of
the supranational troika (Commission, Parliament, and Court) is severely restricted.
Moreover, a new form of transgovernmental negotiation system or ‘state-centred
multi-level governance’60
has emerged, again under the First Pillar, in which member
state authorities coordinate their regulatory activities, although they are not necessarily
directly controlled by their governments.
iv. too much or too little state?
Governance in the EU is governance with rather than without or by the state. On the
one hand, the role of non-state actors is much more limited than often suggested by
the literature on the EU as the prototype of network or new modes of governance.
On the other hand, the EU can draw on substantial forms of hierarchical governance,
58
Treaty on European Union, Art 35, para 1.
59
Ibid, Art 35, para 6.
60
D. Levi-Faur, ‘The Governance of Competition: The Interplay of Technology, Economics,
and Politics in European Union Electricity and Telecom Regimes’ (1999) 19 Journal of Public
Policy 175–207, at 201.
European Governance 85
which cast a strong shadow of hierarchy on both negotiations and competition in
the First and parts of the Third Pillar.61
Yet, the EU lacks (the monopoly of) coercive
force and must rely on member states for the enforcement of its authoritative
allocation of values. While the member states have increasingly shared powers with
the European Commission, the European Parliament or (trans)national regulatory
authorities, they remain the central decision makers and implementers of EU
policies.
Conceptualising the EU as governance with the state not only allows for a more
nuanced analysis of its nature focusing on the different degrees of state involvement;
it also makes the EU look less unique and facilitates comparison with other governance
systems within and beyond the state. Finally, it points to some severe limitations
regarding the effectiveness of EU governance. The decline of governance by the
state at the national level resulted in the search for more effective solutions at the EU
level, creating serious problems for the legitimacy of both the EU and the member
states.62
The lack of governance by the state at the EU level, in turn, impairs the
effectiveness of EU governance in those areas where societal problems have become
more prominent and the problem-solving capacity of the member states appears to
be increasingly wanting.
The EU governs the largest market in the world. The various forms of governance
with the state have produced a comprehensive regulatory framework that has
successfully prevented and corrected market failures. Even without coercive power,
compliance with EU law appears to be generally sufficient to make the Common
Policies work. Member states do not always comply, and some comply better than
others.63
Yet, a polity seeking to integrate twenty-seven and more states, which are
ever more diverse, may need a certain amount of non-compliance or ‘institutional
hypocrisy’.64
And sooner or later all member states comply with all EU laws, even
though in some cases this has taken up to eighteen years.65
The problem-solving capacity of the EU is not challenged by a lack of power
directly to enforce its policies. Rather, it is the incapacity to adopt new policies
addressing economic and social problems that concern EU citizens most. Particularly
in (re)distributive policy areas, member states have not been willing to yield
decision-making powers to the EU in order to counteract politically undesirable
outcomes of the Single Market. At the same time, EU market integration impedes
61
Cf Börzel forthcoming, above n 25.
62
Cf F. W. Scharpf, Governing Europe: Effective and Legitimate? (Oxford: Oxford University
Press, 1999); Scharpf in this volume.
63
Börzel et al, above n 57.
64
E. A. Iankova and P. J. Katzenstein, ‘European Enlargement and Institutional Hypocrisy’,
in T. A. Börzel and R. A. Cichowski (eds), The State of the European Union, vol.6: Law, Politics,
and Society (Oxford: Oxford University Press, 2003), 269–90.
65
Börzel et al, above n 57.
86 Tanja A. Börzel
member states in maintaining such functions.66
The Single Currency largely deprives
the member states of their major instruments for national macroeconomic stabilisation,
while the Maastricht convergence criteria place serious constraints on state
expenditures. Softer modes of governance with a strong role of the member states
are unlikely to respond to this ‘European problem-solving gap’.67
Attempts to use the
OMC for institutionalising member state coordination in areas such as taxation of
mobile capital, employment, or social policy, where the heterogeneity and political
salience of member state preferences prohibits more hierarchical forms of governance,
pale in light of the redistributive effects of the EU’s hierarchical powers in
monetary policy on the one hand and member state competition with regard to taxes
and labour costs on the other. Redistributive or normative conflicts are hard to solve
without the possibility of resorting to authoritative decision making.68
The dilemma
of European governance may be that ‘soft’ forms appear to require a shadow of
supranational hierarchy to address policy problems, which the member states refuse
to make subject to ‘hard’ hierarchical forms of EU governance in the first place. Due
to the high legitimacy requirements for imposing policies with redistributive and
normative consequences, on the one hand, and the already existing legitimacy crisis
of the EU, on the other, granting the EU more powers is hardly a solution to closing
the problem-solving gap. The dilemma remains and is exacerbated by the current
financial and economic crisis, which neither the EU (even with the new powers of
the Lisbon Treaty) nor the member states have so far been able effectively to address.
It remains to be seen how the loss of savings and investments, rising unemployment,
and cuts in social benefits will affect the legitimacy of the state. This time, it will be
hard for national policy makers to blame Brussels, which for once may emerge in the
public perception as the solution rather than the problem.
v. the constitutional challenge
The EU as a form of governance with the state closely resembles a system of cooperative
federalism of which Germany is considered to be a prototype.69
While the
central level makes the laws, the constituent units are responsible for implementing
them. The vast majority of competencies are ‘concurrent’ or ‘shared’. This
66
F. W. Scharpf, ‘Negative and Positive Integration in the Political Economy of European
Welfare States’, in G. Marks et al (eds), Governance in the European Union (London: Sage,
1996), 15–39; M. Ferrera, ‘European Integration and National Social Citizenship: Changing
Boundaries’ (2003) 36 Comparative Political Studies 611–52.
67
F. W. Scharpf, ‘The Joint-Decision Trap Revisited’ (2006) 44 Journal of Common Market
Studies 845–64, at 855.
68
Scharpf, above n 9.
69
Cf F. W. Scharpf, ‘The Joint-Decision Trap: Lessons from German Federalism and European
Integration’ (1988) 66 Public Administration 239–78; T. A. Börzel, ‘What Can Federalism Teach
Us about the European Union? The German Experience’ (2005) 15 Regional and Federal Studies
245–57.
European Governance 87
functional division of labour requires a strong representation of the interests of
the member states at the EU level, not only to ensure an effective implementation
and enforcement of EU policies for which the member states are responsible but
also to prevent member states from being reduced to mere ‘administrative agents’
of the EU. Their reduced capacity of self-determination is compensated by strong
participatory rights in the process of EU decision making, mainly in the framework
of the Council, which is the equivalent of a Second Chamber. The Council
as the chamber of territorial representation is organised according to the Bundesrat
(Federal Council) principle, where the member states are represented by their
governments (not by directly elected representatives or members of parliament),
and in relation to their population size, with smaller states being over-represented.
The functional interdependence of the EU and the member state levels of government
not only gives rise to ‘interlocking politics’ and ‘joint decision making’ with
a high need for consensus, but also favours the emergence of a policy-making
system in which policies are formulated and implemented by the administrations
on both levels of government (‘executive federalism’). Functional (non-territorial)
interests are only weakly represented in EU decision making and cannot even rely
on alternative forms of interest intermediation, such as the party system and/or
sectoral associations, as we find them in Germany or Austria.
All in all, governance with the state is based on a constitutional system of the
EU, where competencies are mostly shared among the EU and the member states,
where territorially defined executive interests dominate over functionally defined
societal interests, and where political decisions require a high degree of consensus.
It has resulted in the interpenetration of supranational and national constitutional
structures that have proven impossible to be disentangled. Any attempts to delineate
exclusive member state jurisdictions or re-transfer European competencies to the
member state level have fallen into the joint decision trap, from which they are
unlikely to escape.70
Even if the Constitutional Treaty has failed, a demise of the
European Constitution as it has evolved over time has been rendered impossible by
the EU-induced transmutations of the member states’ Constitutions. The transfer
of national sovereignty rights to the EU level has given rise to the creation of a
new supranational Constitution, which does not exist as an autonomous layer but is
intractably interlocked with the national Constitutions. Member states have not only
created the European Constitution; they must also implement its provisions to make
it work. Instead of trying to ‘ring-fence’ member-state responsibilities, national and
European constitutional provisions should focus on properly defining the role of
the member states and their institutions in EU policy making. Member states have
naturally lost autonomous decision-making power in the process of European
integration. Yet, some state bodies have lost more than others. While national
governments have been compensated by receiving ample co-decision rights in EU
70
Scharpf, above n 69.
88 Tanja A. Börzel
policy making, the losers are the national and regional parliaments.71
They have been
weakened in their constitutional relationship with the government and the courts.
If political decisions are increasingly made in Brussels rather than in Berlin, London,
Paris, or Warsaw, parliaments are deprived of their legislative function and seriously
constrained in holding government accountable. Moreover, the supremacy and
direct effect of European law gives national courts the power to overrule national
legislation that does not conform to European requirements. Finally, the delegation
of executive powers to independent regulatory agencies has further undermined the
possibility of controlling the execution of national and European law. Upgrading
the role of national parliaments or the European Parliament in EU policy making
will do little to compensate for this comprehensive loss of power. Even if the Lisbon
Treaty enters into force, the constitutional challenge remains: it is for member states
to redefine the balance of power between the three branches of government at the
domestic level taking into account the realities of multi-level constitutionalism in the
European Union.
71
A. Maurer and W. Wessels (eds), National Parliaments on their Ways to Europe: Losers or
Latecomers? (Baden-Baden: Nomos, 2001).