Learning from Difference: The New Architecture of Experimentalist Governance in the EU

1. Learning from Difference: The New Architecture of Experimentalist Governance in the EU Charles Sabel(Columbia Law School)Jonathan Zeitlin (University of Wisconsin-Madison)

2. A novel polity without a state • Despite recurrent crises, the EU is creating a single market, while constructing a framework within which MS can protect public health and safety (broadly understood) in nationally diverse ways

3. A new governance architecture • EU’s regulatory successes rest on a new architecture of decision making • A recursive process of framework rule making and revision based on networked deliberation among European and national actors • New architecture increasingly widespread across EU policy making despitenot beingexplicitly grounded in Treaties and directives

4. I. Elements of the new architecture • Framework goals and metrics for assessing progress towards them established jointly by EU institutions and MS • E.g. full employment, ‘good water status’, unified energy grid • Lower-level units (national ministries, regulatory authorities, + collaborating actors) given freedom to advance these goals as they see fit

5. Elements of the new architecture (2) • In return for autonomy, lower-level units must • report regularly on their performance, esp. as measured by agreed metrics • participate in peer reviews where their results are compared to others pursuing other means to same ends • Framework goals, metrics, & procedures periodically revised in light of experience • By actors who initially established them + other participants whose views are recognized as important for full & fair deliberation (e.g. civil society orgs.)

6. Experimentalist governance as a functional concept • 4 key architectural elements as a set of necessary functions which can be performed through a variety of institutional arrangements • No one-to-one mapping of governance functions to specific institutional mechanisms, and vice versa • A single governance function (e.g. monitoring/review of implementation) can be performed by multiple institutional devices, singly or in combination • A single institutional mechanism (e.g. formal peer review) can perform several analytically distinct governance functions

7. EU governance as directly-deliberative polyarchy (DDP) • Deliberative:uses argument to disentrench settled practices and redefine interests/preferences • Directly-deliberative: uses the concrete experience of actors’ differing reactions to current problems to generate novel possibilities for consideration • Polyarchic: a system in which local units learn from, discipline, and set goals for each other

8. A machine for learning from diversity • Well-suited to heterogeneous settings like the EU • where local units face similar problems, and can learn from each other’s separate efforts to solve them, even if solutions can rarely be generalized straightforwardly • Transforms diversity into an asset rather than a obstacle to closer integration • A system of experimentalist governance • in the pragmatist sense of systematically provoking doubt about its own assumptions and practices, while treating all solutions as provisional and corrigible

9. Multiple routes to the EU’s new governance architecture • Federated regulation in privatized infrastructure • Fora & councils of regulators in telecoms, energy • Networked administrative agencies protecting public health and safety • Drug authorization, occupational health & safety, (environmental protection) • Open Methods of Coordination (OMC) • Employment, social protection/inclusion, education/training • [Operational coordination among nat’l authorities & EU agencies in Justice & Home Affairs]

10. Extensions of the new architecture • Responses to catastrophe • Food safety, maritime safety • Prudential regulation in advance of failure • Financial services (Lamfalussy Process) • Revision of existing centralized regulation • Competition/antitrust policy, state aid • From rules to rights • Anti-discrimination policy, fundamental rights

11. Minimal scope conditions • Scope conditions for experimentalist governance broader than historical contexts of emergence in EU • Strategic uncertainty • Policy makers recognize that they do not know how to achieve their declared goals • Multi-polar or polyarchic distribution of power • No single actor able to impose preferred solution w/o taking into account views of others • Opens up possibility of transforming distributive bargaining into deliberative problem solving through institutional mechanisms of experimentalist governance

12. II. Responses to standard objections • Undermining the rule of law? • Lack of accountability in recursive rule making • Ineffectiveness/lack of teeth? • Deliberative governance as ‘soft law’ • At best a secondary complement to ‘hard law’ based on political bargaining • Subverting democracy? • Technocratic deliberation among transnational expert networks as a threat to democracy

13. The limits of principal-agent governance… • Accountability in representative democracy is based on principal-agent model • But principal-agent accountability depends on ability of principals to specify goals precisely enough to give clear instructions to agents or to recognize reliably when actions do or don’t serve specified ends • Model breaks down under conditions of uncertainty/volatility when solutions to problems can only be identified as they are being pursued • Recursive redefinition of ends and means in EU experimentalist governance as a response to this situation

14. …dynamic accountability through peer review as an alternative • Dynamic accountability not as conformity to a preset rule, but as requirement to explain reasons for exercising discretion in choosing one particular way of advancing a common project, subject to review by peers with sufficient knowledge to evaluate such explanations • Peer review of EU experimentalist governance through fora, networked agencies, councils of regulators, OMCs • Processes through which EU decision-makers learn from and correct each other even as they set goals and performance standards for the Union

15. Experimentalist governance is not soft law • New architecture routinely results in revisions of EU law, or elaboration of revisable standards mandated by law and principles that may eventually be given binding force • For every decision-making process that produces non-binding legal sanctions, there is typically another in the same domain where non-compliance can have draconian consequences

16. Destabilization regimes • Sanctions in EU experimentalist governance often take the form of what may be called a “destabilization” regime”: • A set of mechanisms for unblocking impasses in framework rule making and revision by rendering the current situation untenable while suggesting -- or causing the parties to suggest --plausible and superior alternatives

17. Varieties of destabilization regimes • Destabilization regimes can take many forms • Requirement to deliberate in public • E.g. EU food safety “conflict clause” • In cases of disagreement over scientific risk assessment between EFSA and national authorities, both sides are obliged to submit a joint document explaining their differences • But doing so would put both parties at risk because either could lose the debate in full public view, while political instrumentalization of the issue could endanger future collaboration and scientific exchange • This gives both parties strong incentives to continue deliberation until an agreement that both can defend is public is reached

18. The right to challenge and the obligation to explain • E.g. EU competition policy network • The Commission has the right to take over cases from national competition authorities, but must formally justify its decision to other members of the network • Not just a vertical but also a horizontal right of challenge: any member of the network can demand a review of another national competition authority’s handling of a case

19. Penalty defaults • At the other extreme are penalty defaults • Instead of imposing deliberation requirements, the central authority creates brutal disincentives for refusal to deliberate • Rules sufficiently unpalatable to all parties that each is motivated to contribute to an information-sharing regime that allows fair and effective regulation of their interdependence • In a world where standard rule making produces such unpredictable consequences as to be unworkable, the easiest way to generate penalty defaults is to (threaten to) engage in traditional rule making

20. An EU example: the Florence Electricity Forum • Unblocking of deliberative impasses on thorny issues such as cross-border tarification by Commission threats to invoke competition law powers (antitrust, merger control, state aid rules) • Could leave obstructive/intransigent actors worse off than a compromise reached in the Forum • Commission’s powers of legislative initiative and delegated regulation as a means of inducing MS and private actors to cooperate in framework rule making for fear of unpredictable consequences of an imposed alternative

21. Bargaining in the shadow of hierarchy or deliberating when hierarchy becomes a shadow? • From this it follows that EU experimentalist governance can rarely be understood as regulatory cooperation in the shadow of traditional public hierarchy • ‘Bargaining in the shadow of the state’ (Scharpf, Héritier) assumes that public authorities can effectively regulate in case of deadlock, mismanagement, or policy failure • But both in the case of the public deliberation and penalty default mechanisms, the EU induces the actors to provide rules for themselves, presumably because it cannot itself provide defaults that would do the job as well or better • Not ‘bargaining in the shadow of hierarchy’, but ‘deliberating when hierarchy becomes a shadow’

22. The Florence Forum revisited • Competition law as a ‘negative control instrument’, based on ex post, case-by case procedures, which can’t produce fine-tuned solutions like those developed by the Forum • Further legislation, even if more stringent and detailed, still needs to be interpreted and implemented at national level; can’t address all future needs in a rapidly evolving policy area • Hence continuing need for rule development and coordination through networked governance

23. Democratizing destabilization • Networked, experimentalist governance/DDP not intrinsically democratic • But dynamic accountability through peer review subject to penalty defaults has a potentially democratizing destabilization effect on domestic politics and the EU itself • Requirement that each national administration justify its rule choices publicly, in light of comparable choices by others, allows domestic actors to contest official proposals on the basis of richer information about feasible alternatives than would otherwise be available

24. Transparency and participation as procedural requirements • Transparency and participation as foundations for democratizing destabilization • EU becoming increasingly transparent and participatory • ECJ case law decisions on administrative procedure and access to documents • Treaty revisions and EU regulations • Progressive elaboration of legal transparency requirements in EU networked governance • Increasing tendency to establish requirements for ensuring active participation by a broad range of stakeholders (incl. civil society) • Directives establishing networked agencies and other EU regulatory frameworks (e.g. water)