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old_governance.docx - Princeton University - Welcome


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old_governance.docx - Princeton University - Welcome

  1. 1. 5 May 2010 New York University Workshop “Rule-Making in the EU and Global Governance” The Old Governance: Informal Institutions in the EU Andrew Moravcsik Princeton University 1 In international politics,informal governance is the norm, not the exception. Even at their most centralized and autonomous, as in the European Union (EU), international institutions aregenerally moreflexible,consensual, and open-ended than their domestic counterparts.Over the past 25 years,the EU has evolved toward even greater relianceon informal institutions.Astrengthened European Council, norms of consensus voting instead of qualified majority voting, multi-speed arrangements in money and free movement, expanded intergovernmentalism in foreign policy,and the Open Method of Coordination (OMC) are only a few examples. In many ways,this is not the new governance; it is a return to the old. This invites us to ask:What motivates governments and their constituents to selectinformal institutions? Under what conditions mightwe expect this to lead to voluntary informal policy diffusion,policy convergence,and international cooperation? Who wins or loses fromsuch processes,and is thus likely to supportor oppose them? To help answer these questions we can drawon a largeempirical literatureon the OMC and other informal mechanisms.Often this literaturepresents these mechanisms as exemplars of one or another ideal-typical theory—most often of some form of learning.Yet a number of alternativetheories might plausibly explain the nature of informal international governance.This memo considers four:regime theory, two-level games, simple learning, and democratic experimentalism. In each case, I review the theory, suggest hypotheses that might apply to the EU, and briefly sketch what the empirical literatureon OMC and other informal processes impliesaboutits validity.SinceI expect other contributors to this workshop to focus primarily on democratic experimentalism,I focus primarily on the other three. My central argument is that old governance is explained well by old theories. The extensive empirical literatureon the OMC strongly confirms rationalist,agent-based theories—here represented by regime theory and, to a lesser extent, two-level games analysis.In both models, rational state leaders and officials chooseinstitutionsand policies to maximizethe national or governmental interest. They seek to reduce cross-border negative externalities that stem from sub-optimal uncoordinated policies in a way thatsuits particular coalitions of domestic actors.The empirical evidencefor the basic predictionsof both models is strong,even if we draw on studies by those sympathetic to other approaches.Explanationsfocusingon learning—whether simplelearning or democratic experimentalism—seem to explain modest deviations fromthe predictions of this core theory of integration.It would thus be instructivefor future studies of OMC and informal governance not to be exploited as exemplars of singletheories,but to involvemore explicittests among alternativetheories and to catalyzeefforts to synthesize them creatively. Theory 1: Regime Theory – “The European Constitutional Settlement” From a regime theoretical perspective, international cooperation aims to reduce cross-border negativepolicy externalities stemming from uncoordinated national policies.Governments choosebetween formal and informal commitments based on costs and benefits. Specifically,they calculatethe potential benefits of substantivepolicy coordination and the possiblecosts thatmight accrueif they and their constituents are subjected to distributive shocks.Informal institutions,as opposed to uniform, bindingformal commitments, permit governments to retain more flexibility and autonomy to deal with distributional shocks,butat the costof less effective coordination to eliminatesub-optimal policies.Informal institutionsliketheOMC emerge where governments prefer to engage in
  2. 2. 2 sporadic and ad hocpolicy convergence becausethe incentives are insufficientto overcome concern aboutfuture distributiveshocks.Thecritical concern drivinginformality is notjustthe magnitude of distributiveshocks (which could be offset by linkages or side-payments) but uncertainty about their future magnitude and direction.2 Informal institutions govern areas where states expect cooperation to be uneven or sporadic. Throughout, the causal chain runs fromgovernment interests to the OMC policies,not(as learningmodels haveit) in the reverse direction.This regime theoretical approach generates the followinghypotheses. Hypothesis 1A: The smaller the substantivebenefits of policy coordination and the greater the potential for asymmetrical,politically salient,and distributional shocks,the more governments will favor informal institutions. Hypothesis 1B: All other things equal,governments aremore likely to accept policy transfers consistentwith their current or desired policies,whileseekingto avoid policy “misfits”that imposeadjustment costs. Hypothesis 1C: When distributional effects of bargaining and enforcement are uncertain,governments prefer informal cooperation,voluntary enforcement, and flexible“coalitionsof the willing.” When future distributional consequences of policy convergence are uneven but predictableex ante, governments favor multi-speed arrangements, vanguard groups, and opt-out clauses. Hypothesis 1D: Informal governancewill expand as the EU takes on new issues and “drains theswamp” of the most promising areas for cooperation (i.e. those with the greatest functional benefits and lowest distributiverisk). Hypothesis 1E: All other things equal, informal policy transfer is morelikely to occur in “the shadowof hierarchy,” i.e. when financial incentives,side-payments,quid pro quos, formal institutional mandates and oversight,and linkages to formal EU membership encourage adoption. This is most likely in transitional,newer or poorer member-states, and in issueareas linked to enlargement, structural funding,or participation in formal arrangements likethe Euro. Hypothesis 1F: Becausegovernments select informal institutions wherethey expect to act only sporadically or unevenly, the OMC is far more likely to trigger change in domestic discourses and agendas than in policies. The empirical literatureon informal EU institutions such as OMC offers strong empirical confirmation for these hypotheses. Governments tend to have rational reasonsto guard their sovereignty and strikea calculated balance between cooperation and control (1A).3 The issues where member states select OMC—social and employment policies,for example—havetwo distinctivecharacteristics.Firstis a relatively lowlevel of the cross-border policy externalities (1A). Citi and Rhodes note: “In the absence of a much higher levels of cross-border labour flows,or trends for countries to diminish welfarespendingin the search for competitive advantage, or greater evidence than presently exists for widespread tax competition, there are equally few incentives to compel serious national actor engagement in even the softer forms of social and employment policy coordination advanced under the EES/OMC.”4 Exceptions,such as efforts to imposebudgetary control as a flankingpolicy to the Euro, arerare, and generally inducea higher degree of formal institutional backing. The second distinctivecharacteristicof “new” areas of informal and OMC governance (national social and labor policies,in particular) is thatthey tend to be politically salient, deeply embedded in specific national political compromises and subjectto distributional shocks imposed unpredictableeconomic and social circumstances (1C). Following FritzScharp,Citi and Rhodes observe: “Regulations would be opposed by both national governments and actors,for at leastthree reasons: uniformpolicy convergence would undermine the 'social contracts' enshrined in their different welfare regimes; itwould have deleterious effects on economic growth…; and the inherent differences and political salienceof national health and pension systems render EU harmonization unrealistic.Thus,[the classic] method has been abandoned…”5 As regime theory predicts,there is scant enthusiasmfor Europe-wide legislation in theareas to which OMC has been applied,particularly thoseinvolving redistribution (1A).6 For example, there are surprisingly fewviableproposals(letalonewidely supported ones) for a European social policy,and littlesignificantpressurefor any policy outsideof current mandates (1D).7
  3. 3. 3 The limitations on cooperation in areas of informal governancearenot contingent on institutional design,lack of information,insufficientpassageof time, or domestic blockages.They are inherent. This has two further implications for the OMC. The firstis that the OMC is likely to be relatively ineffectiveat transferring policy.A consistentfindingacrossthe entire literature,even among the most positiveanalysts,is thatOMC often changes elite bureaucratic discourse,but has littleimpacton major public policy (1F).8 This is notsurprisingbecause, as micro-studies reveal,the bindingconstrainton policy transfer isnotlack of information about superior policies, but adjustment costs (“misfit”),compatibility with broader domestic social and political compromises,a nd distributional costs,based on pre-existinginterests (1B).9 In any case, governments established informal institutions in places where they intended only to transfer policy only sporadically. The second implication for OMC is that exceptional cases of successful policy transfer within informal institutions often rest ultimately on traditional EUpolicy-makinginstruments and incentives (1E).10 A disproportionatenumber successful policy transfer cases (asopposed to cases of change in discourseor agendas) involveEU enlargement, climatechange or monetary union—areas whereinformal mechanisms of policy learning areused as flanking mechanisms for explicitconditionality,concretefinancial incentives,and formal legislativemandates.11 The sad fate of the “stability pact”and macroeconomic disciplinein the Eurozone after the removal of those incentives,as exemplified by the current Greek crisis,is theexception that proves the rule. A final implication of this analysisis OMC,rather than marking—as somehave argued—a dynamic new constitutional paradigmthat will progressively expand to take over the EU or global governance, marks a return to traditional international politics.Fromthe perspective of European integration,it signalsarrival at an institutional equilibrium:the “European Constitutional Settlement.”12 This settlement broadly defines some issues (trade, business regulation,someenvironmental policies) as EUcompetences, some issues (social policy,pensions, taxation,third-country immigration,education,cultural policy,taxation) as national and local,and other marked for traditional intergovernmental treatment. Though the lines sometimes blur in specific cases,this division has remained stableover the past20 years,resultingin a stablesituation in which about90% of European policy decisions arehandled atthe national level and 10%in Brussels.Institutional flexibility has been required to achieve even this level of EU policy-making. No major EU initiativeof recent decades—not justthe nascentsocial policy, but the Euro, Schengen, Justiceand Home Affairs,immigration policy,foreign policy-making—applies to all member states uniformly. All involvede jure or de facto “coalitions of the willing”(1C).EU institutions have evolved sincethe 1970s away from the classic uniform,centralized “community method” (if it ever existed) toward a more intergovernmental system relianton informal intergovernmental mechanisms like the European Council (1D). The steeper trade-off between scope and scaleof policy-making,visiblein every aspect of the EU, suggests that the OMC, rather than a new and innovativeform of policy-making,is another step alongthe EU’s well-trodden path toward constitutional equilibrium. Theory 2: Two-Level Games – “Membership has its Privileges” The theory of “two-level games,” likeregime analysis, views the primary causal chain asrunningfromgovernment interests to the OMC policies,not(as learningmodels haveit) in the reverse direction.The critical characteristic of the OMC and other informal arrangements,in this view, lies in their ability to set domestic informational, institutional,and ideational agendas in ways thatgovernments prefer. Informal arrangements tend to bolster the domestic power of those with privileged access to information,institutional agendas,and ideas atthe international level,which they can manipulatedomestically to achievepolicy outcomes. In this view, the leading actors arenational executives—officialsbacked by the national political leadership—who can bestmanipulateand control access to the process,and it tends to benefit them atthe expense of other groups in domestic society, notably national parliaments and some broader civil society groups.13 Governments favor informal arrangements in circumstances where they are unsure, as we saw above, that they want to act, and we should not forget that they play an important rolein definingthe OMC agenda and the nature of the performance criteria.14 This general perspective suggests the followinghypotheses.
  4. 4. 4 Hypothesis 2A: The OMC and other informal procedures,and specific policy transfers,arelikely to emerge where governments seek to implement unpopular or controversial distributivepolicies,either to “shift blame” to the EU or to cover for domestic policy with contrary symbolic rhetoric. Hypothesis 2B: To strengthen domestic political supportfor and the credibility of commitment to policies, governments may approve the “uploading”of current or favored future policies to the EU level and then “download” the same policies. Hypothesis 2C: Officials,politicians,and other “gatekeepers” to the EU-level policy process will beselective in policy transfer,with their actions depending on whether they favor the goals of the policy, consider itrelevantto local circumstances,and anticipateitpolitically viable. Hypothesis 2D: Domestic actors may empower officialsto alter domestic elite discourses and agendas,but governments have no rational incentiveto delegate authority to change policy in politically salientand controversial areasunlessgovernments and powerful domestic political forces approve. Hypothesis 2E: Informal arrangements will work best in countries where “Europe” is popular,creatingsupportfor specific policy changes by linkingthem to an ideologically salientideal.In such countries,governments that favor specific policy goalshavegreater incentive to promote informal arrangements and policy transfers.Elsewhere, actors may quietly offer diplomatic supportfor cynical reasons(e.g. to undermine formal cooperation). Hypothesis 2F: Informal processes aresupported by countries that seek to implement reforms favored by a consensus of European governments, or have already implemented similarreforms.Member states with other, outlier preferences may view them with some suspicion. As the consensus changes,the policies will change. The empirical literatureon the OMC offers moderately strong empirical supportfor the “two-level games” theory. European social policy emerged in the late 1990s—a period of social democratic dominanceof the EU—in the absence of any consensus aboutviablepolicies.Social democratic parties,then as now, faced two problems. First, the EU was unpopular among their electorate. With the EU havingrecently moved forward on issues likemonetary union,it still lacked a “social dimension.” This placed pro-European parties social democratic parties in a bind Second, many of these parties had recently committed to unpopular “third way” domestic social and labor reforms, such as increased labor marketflexibility,linkingwelfareto work, and other such “market-oriented” mechanisms.These triggered strongdomestic opposition in their base. The OMC process in social and labor areas “emerged…parallel” to the prior European of “third way” reform programs, which policy documents suggest itwas designed to support (2A).15 Such policies arecandidates for informal institutionalization becausethe benefits from cooperation are relatively low,compared to the uncertainty and risk of potential domestic and transnational distributional implications;governments preferred institutions thatwould permit sporadic, ad hocpolicy convergence, over which they were careful to maintain sovereign control (2D). Zeitlin has argued that “governments often use references to OMC processes as a sourceof legitimation and blame-sharingin order to advancetheir own domestic agenda, sometimes irrespectiveof their real influenceon policy decisions.”16 An example is the German use of the EES as rhetorical backingfor unpopular changes (2A,2E). 17 Micro-studies of policy diffusion within theOMC suggest that, far from actingin an uncontrolled way, officials carefully calculateand manipulatesuch mechanisms (2B,2C). The empirical literaturesuggests thatnational officials enjoy autonomy, but it is limited—as the“two-level” theory predicts.Studies of decisions whether or not to engage in “peer review,” for example, suggest that officialsfeel constrained,actingto transfer policies and models in anticipation of domestic political imperatives and thebroader domestic social model.18 In other, often low-saliencecases,they appear to actfreely to promote national discoursesand setelite agendas —yet in few, if any, cases arethey ableto exploitthis access to the EU level in order to obtain substantivepolicy goalsoutsideof scattered low-salienceissues (2D).The OMC literatureconsistently notes that national officials arequiteselective about the policies they “upload” and “download”, or consider seriously for peer review or adoption.Governments are often frankly manipulativein how they doingthis,usingredefinition of goals to avoid potentially costly “misfits.”19 Governments hedge by “uploading”flatly contradictory elements into EU documents, so they can
  5. 5. 5 choose those that suittheir domestic system (2B).20 Much of the micro-evidence for the positiveeffect of OMC proposals on domestic discoursedoes not suggest any sortof technocratic learning is occurring,butinstead points to linkageto the European ideal in pro-European polities (such as Germany) (2E). In the “two-level” approach, “shaming,” “peer pressure,” and “mimicking” occur not because of technocratic consensus,as learningtheorists would have it, but because of linkageto shared European ideals,or becauseof manipulation of domestic information by committed elites. These mechanisms havebeen shown not to work correspondingly well in less pro-European settings (such as Franceor Britain).21 Similarly,theobservation that the OMC seemed to declinein influenceon discourseand policy when Social Democratic parties losttheir hold on EU policy seems consistent with the two-level games interpretation (2F). Theory 3: Simple Learning – “Leaders and Laggards” OMC and other informal arrangements offer a conduit by which governments can learn what their counterparts in other EU governments aredoing and selectively transfer policiesthey deem useful. Simpleor one-shot learning of this type requires not justdissatisfaction on the partof the target state about current policy;italso requires that a successful and easily appropriated alternativepolicy bereadily available.22 Italso assumes thatgovernments do not have the resources,analytical capacity or inclination to engage in long-term, controlled,repeated play “democratic experimentalist”observation of policies in multiplesettings—which mightbe more reliable.Instead, they must decide on a more limited empirical basiswhatforeign models are successful and similar enough to emulate. Such a process can be atmost only boundedly rational,and sometimes resembles socialization or “mimicking” more than rational learning.23 Itimplies thatthere are already knowledgeable states in the EU, some of which have already adopted successful policies (“leaders”), and who transfer their knowhow to backward states (“laggards”).Sincea successful policy innovation mightnot be relevant in a very different setting, we might expect that successful policy innovationswill tend to be copied and shared among societies and polities thatare broadly similar in importantways.In this context, governments may also “shame,” apply “peer pressure,” and encourage “mimicking” and “discursivediffusion.”24 Simplelearningof this kind within transgovernmental networks in the EU is an alternativeto learningfrom domestic experience, academic studies,the media, cons ultants,professional networks, other international organizations,countries outsidethe EU, or hearsay. Hypothesis 3A: Simple learningis likely to be asymmetrical,with “leaders”teaching “laggards.”Those who adopt policies aremostlikely to occur in transitional governments (e.g. enlargement countries) forced to adopt new policies,after catastrophicpolicy failure,or in new policy areas where only a few countries have yet developed competence. In such cases,policy changeis inevitable,prior national learningis unlikely to have taken place,the political equilibriummay be more malleable,and established models existelsewhere. Hypothesis 3B: Learningis more likely to influencedomestic discourses and agendas than policies,particularly when backed by material incentives.Discoursesand agendas aretranslated into policy,however, only where the issuedoes not have major distributiveimplicationsor is in theinterest of dominant domestic political actors. Hypothesis 3C: Rational EU learningcan influencedomestic discourseand agendas only where EU bureaucratic networks enjoy a distinctcomparativeadvantageor monopoly in information transmission,analysisand dissemination over other networks and analytical methods,such as policy think-tanks,academia,media,classical international organizations,bilateral contacts,professional associations,multinational business,consultants,non- EU countries,and national systems of evaluation and experimentation. Learning in any other context is likely to be less efficient,successful,and sustainable. Hypothesis 3D: Rational officialswill learn bestabout small,discretepolicy innovationsnotdependent on broader national political,social,cultural or economic structures.In cases where micro- and macro-structures are connected, rational officialswill learn bestfromgovernments with similarmacro-structures butdifferent policies. Learning in any other context is likely to be less efficient, successful,and sustainable.
  6. 6. 6 Hypothesis 3E: Learning in any given area is cyclical,risingas lessonsarelearned,but fallingthereafter until new policies areavailable. The empirical literatureon learningin informal EU mechanisms suggests that itis a mechanismof rather limited scope and power. In almostall cases thathave been observed, only a modest effort is made to draw broad policy conclusionsdifferentthan those that motivated creation of the OMC in the firstplace(3B).Officialsonly consider a very small proportion of possiblepolicies.25 “Peer review” and other mechanisms function on a very selectivebasis, with officials selectingfor visits and adoption narrowpolicies perceived as successful fromspecific countries perceived as havingdomestic systems similar enough to their own to be appropriatemodels (3D). The reason for this is fundamental.National systems vary widely,and empirical studies of the motivations of officialsengaged in peer review suggest that they appreciatethat the up-front political,social,and economic costs of adoptingnew policies areoften high.Learning appropriatelessons fromforeign examples requires that observers already havea mental model of the relationship between a policy instrumentand its political,social,economic and cultural context—issue-specific knowledgethat is difficultto generate on a one-shot basis.In simplelearning,diversity is a mixed blessing.Hence learningtends to take placein cases where there areclear “leaders” and “laggards” (3A). Most of the examples of possibletransnational learningcited in the literatureon OMC appear to be examples of simplelearning:one-way, one-shot, and hierarchical. As we have seen, even sympathetic analysts havefound very few prima facie cases of potential OMC influenceon policy outputs (let alone social outcomes) within social policy or employment areas,where it has been most widely employed. Nearly all the exceptional examples where policy innovation or compliancemay have taken placearefound in new member states and the EU periphery, or where backed by clear inducements.26 The most strikingcasesareconvergence around the singlecurrency norms in the 1990s and 2000s,and European enlargement norms in the 2000s.In social policy,lessonswere asymmetrical, disproportionately beingtaught by countries likeSweden and Denmark to countries likeGreece.27 The simple learningmodel is consistentwith the observation that OMC seems to have influenced, atmost, a series of small, discretepolicy innovations,whilehavinglittleimpacton broad poli cies,and with the observation that itseems to have expanded until about3-5 years ago and currently seems to be decliningin influence (3E).It is unclear whether OMC enjoys comparativeadvantages over other forms of transnational learning:As far as I know, this issuehas never been systematically studied empirically (3F). Simple learningis a risky model of policy transfer if extended beyond small discretepolicies (3D).Alberto Alesina and Roberto Perotti have viciously criticized OMC learningmodels for implicitly assumingthatthe EU knows the “correct” policy model. They have argued that “this Kafkian exercisehas contributed to set back the level of the debate and of understandingby the public by givingthe impression thatsome EU institution actually knows howto solvethe problem of European unemployment, if only national governments cooperated….”28 Whereas this may be exaggerated, there is sometruth to it,as we learn from the best example of this sortof policy transfer atwork: the adoption of Economic and Monetary Union. The convergence of countries toward the model of low inflation, central bank independence and,ultimately, a singlecurrency,was not simply an inferencedrawn from academic writings or domestic experience; it was also an effort to extend the “German” model to other countries.By transferringmonetary policy discretion to an independent European Central Bank—a non-majoritarian institution—theexpectation was that pricestability,economic competitiveness, and macroeconomic di scipline would follow.This seemed plausiblebecauseitdrew on a successful model,namely the German Bundesbank.29 In retrospect, however, this seems to have been an overambitious exercise,insufficiently attentive to the basic monetary economics of optimal currency areas and the political scienceof the “varieties of capitalism”—as European governments are currently discoveringin seekingto salvagethe Greek economy. Typical of the dynamics of simplelearning,this was in most respects a top-down decision,taken by national officialsand politicians,and supranational technocrats,over the objections of those officialsclosestto the informal functional networks.30 In the end, they are the decision-makers who matter when the issues aresalient.
  7. 7. 7 Theory Four: Democratic Experimentalism – “Unity in Diversity” In this view, OMC and other informal arrangements are a method to overcome the limitations of local and single- shot learningby encouragingpolicy learningthatis high-n,iterative,and transnational.If we have enough cases and if learningis recursive, we can overcome the impediments to learningwhatmight work in Italy by observing Sweden. More countries could learn from each other. As the OMC developer Mario Joao Rodrigues argues, “diversity in Europe should be treated as an asset(a natural laboratory for policy experimentation) rather than as an obstacleto integration.”31 The distinctiveadvantageof OMC vis-à-vis classical policy-making lies notin its ability to transfer learned policies,which could,after all,beachieved by classical means.It is to encourage deliberation about correct policy and policy goals through decentralized epistemic communities of officialsand experts. Hypothesis 4A: Same as 3B. (Informal arrangements change discourseand agendas,not policy,except in non- distributiveareas.) Hypothesis 4B: Same as 3C.(Informal EU networks must enjoy a distinctinformational comparativeadvantage.) Hypothesis 4C: Rational policy transfer will beproportional to the range of availablecross-national data and analysis.Over time, it is likely to develop slowly within an issuearea, butto grow more intensive over time. Hypothesis 4D: The high data requirements and constraintimposed by distributional consequences mean that democratic experimentalistprocesses should work best in small,bounded, iterated and technical processes in which there arevery high numbers of iterations of similar cases.(e.g. legal reasoning,compliancein established sectors) Hypothesis 4E: Rational officials may be ableto consider broader reforms if they can elicitinformation froma broader range of social actors. Hypothesis 4F: The impactof the OMC should co-vary with the availability of peer review, benchmarking, explicit standards,public shaming,and other instruments. Here I will bebrief, as other discussants in this workshop will surely treatdemocratic experimentalisttheory in more detail.We have seen that there is a consensus in the literature,includingeven the authors most sympathetic to democratic experimentalism,that OMC processes havehad some impacton elite discourseand agendas,but littleon policy.32 In some ways, this seems consistentwith the predictions of the theory. This may be so because only a small proportion thatgoes on within OMC satisfiesthe core assumptions of democratic experimentalism. Sabel and Zeitlin positthat“The possibility conditionsfor experimentalistgovernancearearguably quite minimal: strategic uncertainty, meaning that policy makers recognize that they cannot rely on their strategic dispositions (e,g. more market vs more plan) to guide action in a particulardomain (or equivalently thatthey do not know how to achievetheir declared goals);and a multipolar or polyarchic distribution of power, in which no singleactor has the capacity to impose her own preferred solution withouttaking into accountthe views of the others….Together, these conditions open up the possibility for transformingdistributivebargaininginto deliberativeproblemsolving through the institutional mechanismsof experimentalistgovernance.”33 Yet the requirements for successful democratic experimentalismare in fact more onerous than the tone of this quotation suggests,and the empirical literaturesuggests they arenot often met.34 Other necessary conditions includethatEU networks be a relatively efficient sourceof information,information not be a decisivestrategic resourceeven if their ability to manipulate it is imperfect, adjustment costs to new policies below, superior common solutions existand beknowable, etc. As we have seen, all butthe most detailed OMC issues areperceived by participants as involvingdomestic distributiveconcerns that generally outweigh the impactof international policy externalities (4A).In many cases, moreover, there is no obvious common policy solution,even after discussion.Nor is itobvious in some cases,to the extent that new solutions may exist,that an efficient way to find them is for countries to converse with one another via informal institutions.Policy-makingconcerningnew rules involves a number of iterations thatusually seems to approximatethe assumptions of simplelearningmoreclosely than the high data requirements of
  8. 8. 8 democratic experimentalism. This mechanismhas now been in placefor over a decade and it is difficultto find littleevidence of rational policy transfer beingdirectly related to the range and quality of availabledata and analysis (4B,E).35 Few if any studies comparethe learningopportunities in EU networks to other opportunities, however, so it is difficultto assess hypotheses aboutthe relativeefficiency of transgovernmental means of complex learning (4B).The impactof OMC has not increased consistently over time, as predicted; most analysts view its influenceas havingbeen cyclical (4C).As we have seen, studies tend to disconfirmthe view that changes in discourse,agendas and policy correlatewith the availability of OMC instruments. Dozens of studies have analyzed this problem—cited above—almostall of them attributingobserved variation to functional imperatives and domestic politics(4F). Still,there may be some reason to believe that there are distinctivepockets of EU activity in which the conditions of low distributional consequences,technical autonomy,and high iteration demanded by democratic experimentalismare approximated.Two promisingareas would be legal enforcement and complianceoversight committees such as comitologie.36 Whilewe do not want to draw too complete a distinction between legislation and enforcement, in the latter casethe scope of immediate policy impactis often narrower, a number of similar cases ariseover time, and a community or network of experts with semi-autonomy can function over periods of time. To be sure, the claims for the independence of the epistemic community of lawyers and comitologie offiicials can be, and have been, exaggerated—sometimes quite strikingly. The dominantdiscoursein comitologie remains that of national interest,and radical arguments of “social constructivist”socialization havebeen empirically disconfirmed.Yet there is clear evidence that officialsin this contextenjoy a certain autonomy. That autonomy is larger in the legal system. The striking evolution of the European Court of Justice that, over time, such systems can deepen in the exponential way predicted by democratic experimentalisttheory (4C), as the enormous literatureon the European Court of Justicesuggests—the one area where a historical institutionalistaccountof the EU has real empirical purchase. There is thus a caseto be made in these areas,and the literaturemight benefit from focusing on democratic experimentalismin areas where its theoretical preconditions aremost obviously fulfilled.37 Conclusion A decade of research has generated a largeempirical literatureon OMC and other informal processes in theEU. Three results consistently emerge: (1) OMC is havinga modest aggregate impact on European public policy and macro-political indicators. (2) The causal mechanismsconjectured to lead to effective policy learningwithin OMC can be reasonably well-explained by traditional factorsthatinfluenceclassical interstatecooperation in the EU: convergent national policy preferences,permissivedomestic institutions,positive-suminterstatebargaining,and formal compliancemechanisms. (3) Where simpleand complex (democratic experimentalist) learningtakes place, it appears to do so within tight constraints setby rationalisttheory. This is notto say that decentralized learningis unimportant in explainingsomeof what we see in European integration, or learningtheories are flatly disconfirmed.Itis to say that these processes can only function within relatively narrowexogenous constraints set by interests, power and institutions.This is whata decade of extensive empirical research shows. This is a heartening resultfor social scientists and policy analysts—as well,I think,for democratic theorists!— because itis consistentwith most of what we already know about how the European Union actually works.EU policy today reflects a carefully crafted compromiseamong national interests carefully designed to balancea commitment to common policy-makingwith the maintenance of national flexibility.For fivedecades, alternative theoretical views—neo-functionalism,historical institutionalism,constructivism,federalism,post-modernism, Habermasian discoursetheory,supranational agenda-settingtheory, theories of supranational-subnational alliances—havesoughtto show that unintended consequences and indirectprocesses dominatethis underlying rationalistlogic of European integration. None of these has been empirically successful as a general or foundational theory of European integration,though each explains somesubordinatepartof the puzzle within specific scopeconditions.The way forward, then, is for studies of informal governancein the EU to be explicitly multi-causal,both in the sense of involvingtests among alternativetheories, studies more carefully designed to ascertain the scopeconditions of claims, and efforts to develop creativenew syntheses among theories. In sum,
  9. 9. 9 the research program should go the way of EU studies and the study of international organization in general, namely consideringhowalternativemechanisms combineto explain a complex reality.38 ENDNOTES 1 am gratefulfor theresearch assistance ofJustin Simeonein preparing this memo. 2 Mareike Kleine, AllRoads LeadAway From Rome: ATheoryofInformal Norms (Dissertation, Freie Universität Berlin, 2009). 3 Member states jealously guardtheirsovereignty and may haverationalreasons for resisting furtherEuropeanization—evenin its 'soft'OMC guise. Armin Schafer, “Beyond the CommunityMethod: Why theOpen Method ofCoordination was Introducedto EU Policy-Making”, European IntegrationOnline Papers 8:13(2004), 1-19. 4 Martin Rhodes,“Employmentpolicy: between efficacyandexperimentation', in H.Wallace, W.Wallaceand M. Pollack, eds., Policy-making in the European Union(Oxford,2005), 279-304; ManueleCiti and Martin Rhodes, “NewModes ofGovernance intheEuropeanUnion,”inKnud Erik Jørgensen, Mark A. Pollack andBenRosamond, eds. Handbook ofEuropean Union Politics (Sage,2007), 469; AndrewMoravcsik, "The European Constitutional Compromiseand the Neofunctionalist Legacy," JournalofEuropeanPublic Policy 12:2 (2005), 366, passim.; Fritz Scharpf, “TheEuropean SocialModel:Coping with theChallenges ofDiversity”, JournalofCommon Market Studies 40:4 (2002), 645-670. 5 Top down regulation anduniform application ofEU lawin areas such as welfareand fiscalpolicy wouldnot onlybe illegitimatebut “unthinkable” (Scharpf2002). Elsewhere, ininnovationpolicy, for example, the complexity anduniqueness ofnationalsystems render centrally-determined policies dysfunctional. R. KaiserandH. Prange,“Managing diversity in a system ofmulti-levelgovernance:The open method of co-ordination ininnovationpolicy”, JournalofEuropean PublicPolicy 11:2(2004), 249-266. 6 Even in the EU Constitutional convention, where hundreds ofproposals wereconsidered,therewere almost noconcreteproposals for a European social policy. On thelackofconsensus, seeCitiandRhodes: “Neithera compulsory rangeoftax rates nor a single European tax system has beenadopted by EU member states; norhas there been muchprogress in moving beyondanEU socialor employment policy based on intergovernmentalbargaining and the standard Community Method…. By contrastwith internalmarket competition policy and the EMU/SGP deficit criterion, negative externalities and thepotentialfor downward policy spirals in other policy areas is actually quite limited. A rule of thumb for assessing thesuccess ofnovel mechanisms ofcoordinationin the EU is thepresenceofsuch externalities.In theabsenceofa much higherlevels ofcross-border labour flows, or trends for countries to diminish welfarespending inthesearchfor competitiveadvantage, or greater evidencethanpresently exists for widespread tax competition, thereareequally fewincentives tocompel serious nationalactor engagementin eventhesofterforms ofsocialand employment policycoordinationadvancedunder the EES/OMC.” Citiand Rhodes 2007, 475. See alsoScharpf2002; Rhodes 2005; Moravcsik 2005. 7 Empiricalresearchshows this is nota function ofenlargement. Voting patterns do nottrackold andnewstatesplits. It is a function ofa lack of consensus innew, redistributive issue areas.Thereremains, ofcourse,incremental movementwithinexisting constitutionalmandates,which blurs thelines. See, for example,progress ingenderequality,asylum,services deregulation, andforeign policy.This does notundermine the point. 8 The best singlestudy is JonathanZeitlin,Philippe Pochet, eds., withLars Magnusson,The Open Method ofCo-ordination inAction(P.I.E.-Peter Lang, 2005), writtenby threeauthors quite sympatheticto OMC. Yet, even though thestudies arenot controlled, donottest theories systematically, anddo notusequantitativemethods, theauthors still concludewithadmirablehonesty that littleevidenceofpolicy change exists. Héritier points to a consistent trade-offbetween thelevelofmember stateconsensus and theformulation ofprecise targets. A. Heritier, “New Modes of Governance in Europe:Increasing Political Capacity and PolicyEffectiveness?”in T. Börzel andR. Cichowski,eds., State ofthe European Union VI: Law,Politics, and Society (Oxford, 2003), 119. In thearea ofpension policy, member states have achieved littlestandard- setting,information-gathering, andbehavior modification. MartinLodge, “Comparing Non-HierarchicalGovernanceinAction: TheOpen Method of Co-ordination in Pensions and Information Society”, JournalofCommon Market Studies 45 (2007), 343-365. 9 In the peer review mechanisms ofthemost-developedOMC, theEuropean EmploymentStrategy,heavypoliticaland social costs are “routinely referred to”in surveys toexplain why 'best practices'aresohard toidentify and transfer. B.H. Casey and M. Gold, “Peerreviewof labour market programmes in the European Union:what cancountries really learnfrom one another?”, Journal ofEuropean Public Policy12:1 (2005), 23-43. Otherscholars haveemphasized the importanceofpolicy “misfit.” See, for example, MikkelMailand, “North, South, East,West: the implementation oftheEuropean Employment Strategy in Denmark,theUK, Spain, andPoland”, inMartinHeidenriechand Jonathan Zeitlin, eds., Changing European EmploymentandWelfare Regimes, (Routledge,2009). From this perspective, statecomplianceis only a result ofpre- existing interests;consequently, member statepolicy convergenceis unattainable. Claire Kilpatrick, “New EU Employment Governance and Constitutionalism”,in GrainnedeBurca and JoanneScott,eds., LawandNew Governance in the EU and the US (Hart, 2006), 134. 10 Citi and Rhodes 2007, 469. Seealso: C.M.Radaelli, “TheEuropeanization ofPublic Policy”, inK. Featherstoneand C.M. Raedelli, eds., The Politics of Europeanization (Oxford, 2003); Susana Borras andBent Greve, “Concluding remarks: New method orjust cheaptalk?” Journal of European Public Policy 11:2 (2004), 329-336; Susana Borras and Kerstin Jacobsson, “The openmethod ofcoordinationand new governance patterns intheEU”, Journal ofEuropeanPublic Policy 11:2 (2004), 185-208. Scharpf(2002) claims effectiveness inemploymentor social policy is largely duetopolicylinkages withTreaty-based legalstandards andframeworkdirectives. CitiandRhodes summarize the literatureas follows: “Therehavebeen fewattempts to subjecttheOMC andother new modes ofgovernance tosystematic, variable-based analysis. Nonetheless, existing work does alertus to twocritical factors for understanding potentialimpact: thepresenceofsanctions andtheextent of institutionalization” (2007, 469). 11 See, for example, Radaelli2003; Borras and Greve2004; Borras and Jacobsson2004. Citiand Rhodes observe, “Benchmarks are at their strongest whenusedto monitor andpublicize national indicators and whenlinkedto the potentialfor 'harder'policy interve ntions (as with deficit levels in thecaseoftheStability andGrowth Pact....They have'moderate strength'when they take theform ofnon-binding guidelines and indicative targets andarealso accompanied by monitoring andreporting requirements andthethreat oflegislation, as in theEuropean ClimateChangeProgramme. Theyareat their weakest,as ineducationpolicy, where there areno concretetargets for individual countries, but merely 'referencelevels'ofaverageEuropean performance. The latter havelittlerealmeaning…”(2007, 470).
  10. 10. 10 12 Kathleen McNamara andSophieMeunier,"The EuropeanConstitutional Settlement,"in Kathleen McNamara and SophieMeunier, eds. Making History: European Integration andInstitutionalChange at 50, Stateofthe European Union, Vol.8 (Oxford,2007). 13 Andrew Moravcsik, "Why theEuropean Community Strengthens theState: DomesticPolitics and International Institutions,"Center for European Studies Working Paper Series 52(Center for EuropeanStudies, 1994). 14 Büchs asserts,“Member stategovernments know thattheOMC objectives arenot legally binding, thattheirnationalparliaments do nothave to agree to themor transposethem intonationallaw and that the EU cannot imposeany formal sanctions iftheobjectives arenotachieved. It is thereforeno political riskto governments toagreeto ambitious objectives…theymay even hopeto “use”theOMC objective as an additional reform lever.”Milena Büchs, New Governance inEuropean SocialPolicy: The OpenMethod ofCoordination (PalgraveMacmillan, 2007), 31. 15 Büchs, p. 44 andChapter3 passim. 16 Zeitlin and Pochet,with Magnusson2005, 455. 17 Büchs 2007, 82. 18 When compliance is evident,this oftenresults fromthefactthatmember states may strategically “up-load”and selectively “down-load” preferred policygoals during the benchmark setting phase(Zeitlin 2005: 451-452). JonathanZeitlin, “TheOpen MethodofCoordination in Action”, in Zeitlin and Pochet, withMagnusson 2005. 19 Büchs 2007, 31. As Büchs recounts, “Jobelius (2003) analysedhow the employmentguidelines in2003were formulated and concluded that the Commission was notsuccessfulin introducing more rigorous quantitativeindicators due to opposition by member stategovernments. This can also beillustrated by the factthat the EU Commissionincluded job counseling into its definitionofmeasures ofactive labour market policy. This was demanded by the UKgovernment, who strongly opposedtheCommission’s view thattheUK did notcomply with the objectiveof providing a measure ofactivelabour marketpolicy for young peopleafter six months ofunemploymentatthelatest.... The UKgovernment argued that itactually fulfilledthis objective iftheEU Commission accepted job counseling as a measureofactivelabour marketpolicy. Dueto this intervention, theUK is now theonlyEU country reported tobe fully complying withthese activation objectives” (2007, 30). 20 For example, a 2003Commission reporton The Future of the EuropeanEmploymentStrategy recommends bothgreater flexibilityin contractualarrangements andrestrictions onthesegmentation ofthe labourmarket intodifferent categories ofworkers—inconsistencies that may accountfor “asymmetric” policylearning across differentmember states. Milena Buchs,“Asymmetries ofpolicy learning? The European employmentstrategy and its roleinlabour marketpolicyreform inGermany andtheUK”,ESPAnet Conference, University ofOxford (9-11 September 2004). Seealso: G. Raveaud, “TheEuropeanemploymentstrategy: fromends to means”,in R. Salais and R. Villeneuve,eds., Europe and the Politics ofCapabilities (Cambridge, 2005); Rhodes 2005; Citiand Rhodes 2007, 476. 21 Büchs 2007, 92. 22 Citi and Rhodes 2007, 474-475. 23 P. DiMaggio andW. Powell, “The iron cagerevisited: institutionalisomorphismand collectiverationality in organizational fields”, inW. Powell and P. DiMaggio,eds.,The New Institutionalismin OrganizationalAnalysis (Chicago, 1991). 24 Kerstin Jacobsson, “Soft regulation and thesubtle transformation ofstates: thecase ofEU employmentpolicy”, JournalofEuropeanSocial Policy 14:4 (2004), 359-365; D.Trubek, P.Cottrell, and M. Nance,“Hardand Soft Lawin EuropeanIntegration”, inJoanne Scottand Grainnede Burca, eds.,New Governance andConstitutionalism(Hart, 2005), 78-80. 25 Casey andGold 2005. 26 Jacobssonand West contendthattheEES promotedcompliancevia advice, monitoring,and peerreview intheBaltic countries. Kerstin Jacobsson and Charlotte West,“Joining theEuropeanEmploymentStrategy:Europeanization oflabour market policy making intheBaltic states”, in Martin HeidenreichandJonathanZeitlin,eds., ChangingEuropeanEmployment and Welfare Regimes (Routledge,2009). 27 In regard to theEES, several authors support this claim. See,for example: Zeitlin, in Zeitlinand Pochet,with Magnusson2005, 454; M. Heidenreich andG. Bischoff, “TheOpen MethodofCoordination:AWay totheEuropeanization ofSocialand Employment Policies?”Journalof Common Market Studies 46 (2008), 497-532. In regard tosocialpolicy, some authors observe a “North-South learning direction.” See,for example, Kristin Edquist, “EU social-policy governance: advocating activismor servicing states?” JournalofEuropeanPublicPolicy 13:4 (2006), 500-518. 28 Alberto Alesina andRoberto Perotti, “TheEuropean Union:a politically incorrectview”, National BureauofEconomicResearch,Working Paper 10342 (2004),, pp. 6-7. 29 C.M. Raedelli,“Policytransferin the European Union: institutionalisomorphism as a sourceoflegitimacy”, Governance 13:1(2000), 25-43; K. McNamara,“Rationalfictions: central bank independenceandsociallogicofdelegation”, West European Politics 25:1(2002),47-76. 30 McNamara 2002;Moravcsik 2005. 31 Jonathan Zeitlinand David Trubek,GoverningWork andWelfare in aNew Economy (Oxford,2003), 17. Cohen and Sabelcontend,theOMC allows actors to“transformdiversity anddifferencefrom an obstacle tocooperativeinvestigation ofpossibilities intoa means for accelerating and widening such enquiry.” J. Cohen andC. Sabel, “Sovereignty andsolidarity: the EU and the US”, inJonathanZeitlin and DavidTrubek, Governing Work andWelfare in a New Economy(Oxford, 2003),362-373. 32 Zeitlin and Pochet,with Magnusson2005. 33 Charles Sabeland Jonathan Zeitlin, “Learning from Difference: The New Architecture ofExperimentalist Governance intheEU”, EuropeanLaw Journal14:3(2008), 280. 34 The two cited bySabeland Zeitlinseem neither necessary nor sufficient. Therearecases ofOMC learning inwhich actors arenot strategically interdependent. 35 Büchs 2007, 92. 36 Gráinne deBúrca andJoanneScott, eds. Law and newgovernance inthe EU andthe US (Oxford ; Portland, Oregon : Hart Publishing,2006); ChristianJoerges and Ellen Vos,eds. EU committees : socialregulation, lawandpolitics Oxford; Portland, Ore. : Hart,1999. 37 Laffan and Shaw (2005). 38 E.g. Citi and Rhodes 2007, 475; Linsemann, Meyer,andWessels 2007).