Consequences: Shared competences and multilevel governance

4 Consequences: Shared competences and multilevel governance

Irrespective of the diverse results of research on the vertical allocation of competences and the evolution of competence allocation, neither normative nor empirical theories imply convincing reasons to regard the EU and the member states as levels between which competences are or could be separated. Empirical research did not reveal an increasing drift of powers from the national to the European level. Rather it depicts political processes of dividing shares of competences, their extension being determined in power struggles between national and European actors representing different public or private interests. Efforts to find a coherent normative theory or at least criteria to sort out competences between levels have failed or ended in more or less complicated schemes which split up competences. This conforms to the fact that most competences are shared between the EU and national or sub-national governments and that they are applied in patterns of multilevel governance. Scholars describe this reality with concepts like “condominio”, “consortio” (Schmitter 1996 ), the “fusion of levels” (Wessels 1997

) or “network governance” (Kohler-Koch and Eising 1999 ).

In response to this development, scholars began to elaborate theories of multilevel governance. Not only have they suggested explaining European integration as the outcome of joint decisions of national and European actors, they also have revealed that decisions on the vertical allocation of competences usually result in an interlocking of European, national and sub-national levels. Consequently, the transfer of powers to the EU should no longer be considered a zero-sum game, rather it is about finding ways to deal with interdependent tasks cutting across boundaries of national governments.

The multilevel governance approach got widespread acknowledgement through the work of Hooghe and Marks (2001 ), although it is disputed whether they formulated a new theory (Jordan 2001 ; for a review of the debate: Bache and Flinders 2004 ). They started from empirical research on European regional policy and on the mobilisation of sub-national actors in EU policy-making. The results of these studies revealed that regionalisation, i.e. shifting powers from the national to the sub-national level, parallels the increasing transfer of competences to the European level. The interplay of these two processes implies that European integration is neither a continuous process nor an established political structure but an always contested issue (Hooghe and Marks 2001 : 28). What we observe is not just the establishment of another level of politics but instead the evolution of “a system of continuous negotiations among nested governments at several territorial tiers” (Marks 1993 : 392). Instead of governments operating in their territorially demarcated jurisdiction, “variable combinations of governments on multiple layers of authority – European, national, and subnational - form policy networks for collaboration. The relations are characterised by mutual interdependence on each others’ resources, not by competition for scarce resources” (Hooghe 1996 : 18).

This approach on multilevel governance disaggregates states into actors involved in European politics. Instead of looking at the interplay between national governments and the European Union, attention is focussed on the multiple actors from regional governments, national governments and parliaments, the European Commission and the European Parliament, as well as on their patterns of interaction, which are described as networks and negotiations. It goes without saying that such an analytical perspective is better suited to comprehending the complexity of European politics than functionalist, intergovernmentalist or even institutionalist approaches. It sheds light on the dynamics of interdependent policy-making and the flexibility of structures, in which supranational actors participate more as political entrepreneurs than as holders of particular competences. In any case, the concept of multilevel governance strongly challenges the assumption that any kind of vertical allocation of competences between levels can determine policy-making.

The problem with this approach to studying multilevel governance is that its conclusions remain a bit vague. Although the dynamics and flexibility of the European political structure are rightly emphasised, Hooghe and Marks do not clearly carve out the mechanisms which might explain the dynamics of policy-making and the outcomes. What they cannot explain either is why and how such a complicated political system works. Their suggestion to link research on EU multilevel governance to comparative federalism (Hooghe and Marks 2003 ) highlights a way to come to grips with this question.

The challenge of understanding how multilevel governance works stimulated a second strand of theoretical reasoning and empirical research, which has been mainly nourished by contributions from German scholars. This line of research was established by Fritz W. Scharpf’s thought-provoking theory of the joint-decision trap (Scharpf 1988 ). This theory was formulated to explain the blockade of European integration in the 1970s and early 1980s by comparing the institutional setting of European policy-making with the German cooperative federalism. Both constituted multilateral negotiation systems in which actors are compelled to find an agreement. It these actors have to decide on redistributive issues, policy-making would be likely doomed to fail. To make things even worse, the institutional structures of joint decision-making could be changed only under very specific circumstances. Governments compelled to cooperate in multilevel governance might be frustrated with political stalemate, but they would be hardly able to come to an agreement on an institutional reform which essentially entails a redistribution of powers.

This negative picture of European governance was not only questioned by the dynamics of integration after 1989 but was also contested by empirical research and in theoretical discourses. Studies on regional policy showed that EU multilevel governance differs in several respects from the structures and processes in German federalism. The greater number of actors at the national and sub-national level makes simultaneous negotiations impossible and leads to a sequential process of policy-making in multi- and bilateral relations. Moreover, the influence of party competition on negotiations among governments, which causes stalemate in German federalism, is reduced in the European context. Finally, the Commission – as an independent agenda setter and administration – can moderate distributive conflicts. Therefore, in a comparative perspective, the EU has been labelled as a loosely coupled multilevel system (Benz 2000 , 2003 ). Adrienne Héritier (1999 ) showed in a series of case studies that actors in EU policy-making find ways to escape imminent situations of deadlock by changing patterns of interaction or by using flexibilities of complex institutional settings and inter-institutional processes. In addition, Edgar Grande (1996 ) pointed out that governments can gain autonomy against powerful interest groups if they pool their competences in multilevel governance. All these findings explain the rather high effectiveness of multilevel policy-making in the EU and the continuous change in patterns of interactions which allow avoiding stalemate in decision-making (Benz 2008 ; Wallace 2001 ).

Fritz Scharpf himself refined his earlier theory based on a review of studies on European policy-making. He concluded that the leeway of actors in European politics varies from policy to policy (Scharpf 1997 ). Moreover, he acknowledges the role of the Commission as an agenda-setter in negotiations, the existence of hierarchical governance by the European Central Bank and the European Court of Justice as well as procedures of flexible integration to deal with veto-power (Scharpf 2006 ). As a consequence, the interplay between European, national and sub-national actors differs accordingly. This approach raises tremendously the complexity of the analysis. In an article summarising his theoretical reasoning on EU multilevel governance, Scharpf (2001 ) proposes dealing with this complexity by avoiding a grand theory and by focussing theorizing on particular modes of governance and the conditions under which they arise and work. He extends his earlier concepts of joint decision-making by including mutual adjustment, hierarchy and negotiations as modes of European governance.

With this analytical framework, it is possible to integrate different theoretical approaches into the study of multilevel governance. Mutual adjustment means that governments coordinate their policy by strategic action and reaction without immediate communication. In the common market and in the decentralised polity of the EU, this mode necessarily leads to competition between governments. In order to understand the mechanisms at work, we can refer to economic theory on institutional competition (e.g. Vanberg and Kerber 1994 ). However, in contrast to these theories, political science analysis has to take into account the influence of internal veto players in competing governments, which might limit the scope of mutual adjustment. Hierarchy as a mode of multilevel governance should be understood as asymmetric interaction between principals and agents in a vertically differentiated structure, rather than as governing by command and control. Problems of coordination in hierarchies have at length been analysed in institutional economics, which, therefore, can be used as a basis for studying this mode of multilevel governance. In order to understand intergovernmental negotiations, a wide range of theories are available which suggest distinguishing between bargaining and arguing or between different structures of negotiations (bilateral or multilateral) or between different types of actors (representatives, agents, experts), to name just the most relevant categories. Joint decision-making combines aspects of multilateral intergovernmental negotiations and hierarchical agenda-setting, but governments negotiating at the European level have to take into account the decision-making in their parliaments and the interests of powerful pressure groups. Therefore, agreements on redistributive policies are unlikely in this setting and this explains why the member states maintained core functions of the welfare state (Scharpf 2001 : 16).

The “modularisation” of the theory of multilevel governance points out a promising research strategy to deal with the complexity of the field. However, real policy-making, in particular multilevel governance of the EU, results from a combination of these basic modes of governance. As indicated by Fritz Scharpf in his description of joint decision-making, they may combine mechanisms of negotiation, hierarchy and political competition, or they may include negotiations in networks working in the shadow of hierarchical control. Decisions on regulatory policies negotiated in the EU Council are influenced by the more or less intense competition among member states for mobile tax-payers or by party competition in the member states. Depending on the type of mechanism and the quality of coupling (strict or loose), these diverse mechanisms of governance can be positively or negatively linked, i.e. they can reinforce actors’ interests to coordinate their policies or they can cause conflicts and divergent incentives. A theory of multilevel governance in the EU must take these interactive effects into account.

It should not be ignored that one way of coping with the wicked problems of multilevel governance is to change the allocation of powers. Dilemmas of collective action usually entrenched in complicated structures of decision-making can be avoided by shifting issues to institutional or constitutional policy. Consequently, in governance research the issue of “meta-governance” has attracted attention. In the same line, scholars working on comparative federalism emphasise the dynamic and fluid character of multilevel systems when competences concern interdependent tasks or powers are shared (Pagano and Leonardi 2007 ). At this point of reasoning, theories of multilevel governance meet theories of federalism with the latter keeping a focus on the allocation of powers and the former indicating mechanisms which cause dynamics and changes.