Europeanization and the European Economic Area

Iceland's Participation in the EU's Policy Process

Johanna Jonsdottir

• Publisher: Routledge
• Year: 2013
• Print ISBN: 9780415502795
• eBook ISBN: 9781136178221
• Topic: Política y relaciones internacionales
• Subtopic: Política

This book examines Europeanization in the European Economic Area (EEA), exploring whether non-member states can have an input into EU decision-making and whether the EU can successfully export its policies within the framework of the EEA.

Iceland, Norway and Liechtenstein, while not EU member states, are members of the European Free Trade Association (EFTA) and signatories of the EEA Agreement. The Agreement allows participation in the EU's internal market but also requires extensive and continuous adaptation to EU rules. Whilst existing literature is limited mainly to the EU's impact on its own member states or neighbours to the east, this book extends the study of Europeanization to the EEA, exploring whether Iceland, as a non-member state, can have an input into EU decision-making and, conversely, whether the EU can ensure that its policies are adhered to outside of its borders. The author argues that, although the EEA Agreement is not without its challenges, it has proved considerably more resilient than originally expected. This raises the question of whether the EEA provides a realistic alternative to EU membership for other states with close ties to the EU.

Delving into the largely unknown intersection between the EU and the EEA and providing important new insights into the Europeanization process, Europeanization and the European Economic Area will be of strong interest to students and scholars of European Union politics and policy-making, European Union Enlargement, Nordic politics and comparative politics.

1 Europeanization

An analytical framework

Europeanization in the context of the EEA

This volume explores the Europeanization of a so-called quasi-member state, taking into consideration both uploading, or Iceland’s ability to project its preferences at the European level, and downloading, or the adoption of EU policies at national level through the EEA Agreement. There have been numerous substantial academic contributions to the study of ‘Europeanization’, and the term has been applied across a wide variety of contexts with a range of different meanings attached to it. As a result, some would argue that it has almost been stretched beyond meaningful limits (Featherstone 2003: 5). Therefore, before engaging in a study of Europeanization, it is necessary to set clear boundaries to the definition that will be used and the theoretical and methodological approaches that will be applied (Featherstone and Papadimitriou 2008: 23). In particular, it is essential to specify how existing approaches can be used to explain and understand the impact of the EU on an EFTA state which participates in EU integration through the EEA Agreement. This section provides justification for the framework that is used in this book, taking into account the major debates in the field.

Europeanization defined as a two-way process

Although a standard definition remains elusive, significant trends can be observed in the Europeanization literature towards a common theme. In general, Europeanization studies focus on change within domestic political systems understood as a consequence of pressure from European-level institutions and policy requirements (J. P. Olsen 2002: 932). Ladrech (1994: 69) is widely cited has having offered the first such explicit definition of Europeanization in his examination of the EU and France, where Europeanization is defined as: ‘A process reorienting the direction and shape of politics to the degree that EC political and economic dynamics become part of the organisational logic of national politics and policy-making.’ Since Ladrech’s study, considerable variations have developed within this framework.¹ However, in general, it is common to view Europeanization as a process of domestic adaptation to pressure from the EU (J. P. Olsen 2002: 932).

As the field of Europeanization research has expanded, empirical observation has revealed a more complex bidirectional dynamic between member states and the Union in the sense that member states do not passively adapt to EU requirements but also actively ‘upload’ their preferences to the EU level in order to avoid having to ‘download’ inconvenient policies (Bache 2008: 10; Borzel 2002: 193). Later contributions to the study of Europeanization have increasingly highlighted the interactive, rather than unidirectional, relationship between the EU and national political systems (Radaelli 2003: 34). Exponents of this view see Europeanization as a two-way process between states and the EU, where influence flows both down from the EU level to the national level and up from the domestic sphere to the EU. The interactive approach is generally thought to provide an accurate description of the way in which member states interact with the EU (Bache and Jordan 2006a: 22) and there is now widespread consensus that in the process of Europeanization two-way pressures operate (Bache 2006: 233).²

Useful terminology has been developed in previous studies for examining the top-down and bottom-up dimensions of Europeanization or how member states adapt to EU policies and shape them. Borzel (2002), for example, refers to these processes as ‘uploading’ and ‘downloading’. Bulmer and Burch (2006) also see Europeanization as a two-way process in their study of central government in Britain. They maintain that domestic adjustment to the EU involves two institutional logics in the sense that institutions must both find suitable ways of processing and implementing EU policy and adapt their procedures to be able to make an effective contribution at the EU level. They call these two components of institutional response to EU policy requirements ‘reception’ and ‘projection’ (Bulmer and Burch 2006: 38). Although uploading and downloading (or reception and projection) can essentially be seen as separate processes, it is important to stress the interlinkage between the two. If states are successful at uploading, this may make downloading more palatable. Furthermore, knowledge of the likelihood of having to transpose difficult EU requirements may influence both the strategy and tactics of states during the uploading campaign.

In this volume such a two-way approach is adapted in order to study the process of Europeanization in a non- (or quasi-) member state. In line with these studies, the view is taken that it is essential to recognize the potentially interactive nature of the Europeanization process, even when investigating non-member states. As noted in the introductory chapter, the two key research questions posed in this volume relate to whether Iceland can upload its preferences to the EU level and in turn whether the EU can ensure that its requirements are downloaded at the national level. In general it has been assumed that the relationship between the EU and non-member states must be in the form of a top-down flow of influence whereby the EU impacts the state in question but not vice versa. Yet this view has not been formally substantiated. Therefore, it is necessary to test whether non-member states with close ties to the EU can in fact develop machinery to ensure their input into EU policy-making, in addition to mechanisms to adapt to EU policy requirements. As such, this study examines the top-down impact of the EU, while also taking into account the two-way relationship between national actors and the EU, adopting the terminology of uploading and downloading or reception and projection throughout the book.

In order to capture the interactive nature of Europeanization, it is defined as ‘the process whereby a state, in this case Iceland, becomes a participant in the EU’s policy process both at the decision-shaping stage at the EU level and the implementation stage at the national level’. Through this involvement key actors learn the rules of the EU game and develop tactics and strategies for uploading their preferences and downloading EU requirements. The process of Europeanization can therefore have a substantial impact on states participating in the EU’s policy process.

‘Mismatch’ as a trigger for Europeanization

Europeanization literature usually begins by looking at the degree of compatibility or ‘goodness of fit’ between EU requirements and domestic arrangements in the states under consideration in order to explain how and why the EU induces domestic change (Featherstone 2003: 14–15; Radaelli 2003: 40–41) or indeed why uploading takes place and why downloading can be problematic. The EU’s policy competences have expanded over the years and it now makes legislation in a wide range of policy domains as well as issuing a large number of non-binding rules.³ Incongruence between the national and EU spheres occurs because the EU policy process takes place on two different levels of governance: the national and the European. Policies are agreed at the EU level but transposed and implemented at the national level (Radaelli 2003: 40–41; Wessels et al. 2003: 3).

Mismatch⁴ or incompatibility is generally seen as a necessary condition for domestic change (Borzel 2000; Borzel and Risse 2003: 58; Haverland 2003; Knill 2001). This is because there would be no need for domestic change if EU policy corresponded perfectly with domestic ways of doing things. For example, when EU regulations are compatible with existing national policies in a particular state, that state will not need to change its legal provisions and there is no redistribution of resources that impacts domestic actors (Borzel and Risse 2003: 61–62). Consequently, the state has no incentive to attempt to upload any preferences to the EU level, and downloading of EU policy at the national level will pose no challenges.

On the other hand, if an EU policy contrasts with existing national policy goals or regulatory standards, some degree of adaptation to legal and administrative institutions will be required in order to implement the policy (Borzel 2000; Borzel and Risse 2003: 61–62; Wessels et al. 2003: 14). As a result, a state will endeavour to upload its own policy preferences during the policy-formulation process so that it will have less trouble adapting to EU policy when it is implemented at the national level (Bache and Jordan 2006a: 19). This can involve attempting to push a certain policy that reflects its preferences onto the agenda, attempting to block a policy altogether or adapting a policy to its particular needs. If a state is unsuccessful or only partly successful in uploading, downloading EU policy can require significant domestic change and its implementation at the national level can entail considerable challenges for states (Wessels et al. 2003: 5).

This study adheres to the school that sees Europeanization as predominantly arising from a mismatch between the policies and practices of the EU and those of the state in question (Bulmer and Burch 2005: 863). Approaching Europeanization in this way highlights the preferences and strategies of states and the opportunity structures through which they attain their goals at the EU level (Mendez et al. 2006: 601; Wong 2006: 9), as well as the structure through which the EU exerts pressure on states to implement its policies and the domestic intervening variables that may determine the outcome of the downloading process. It could even be argued that mismatch is particularly important when looking at the EU’s relations with associated states. This is because they are assumed to have limited uploading capacity, and so they might more frequently be faced with considerable mismatch between the EU and national levels when it comes to downloading EU requirements.

Dependent and intervening variables

During the Europeanization process, different components of domestic political systems can be impacted and, accordingly, studies of Europeanization look at different aspects of domestic change. Many emphasize formal, observable changes such as processes of domestic institutional adaptation and the adaptation of national policy and policy processes. Featherstone (2003: 7–11), for example, notes that institutional actors such as public administrative institutions, organized interest groups, political parties and non-governmental actors have adapted to pressure from the EU. Bache and Jordan (2006b) similarly divide their study on Europeanization in Britain into three sections: ‘Polity’, ‘Politics’ and ‘Policies’. The polity section includes administrative institutions such as government, ministries and regional and local government. ‘Politics’ includes an examination of political parties, organized interest groups and non-governmental actors, while the policy section looks at the effects of the EU on the content of various policies such as foreign policy and environmental policy. Borzel and Risse (2003: 60) also use the distinction between policies, politics and polity to identify the three main observable dimensions along which the domestic impact of the EU can be analysed.

Radaelli (2003: 35–36), on the other hand, takes a broader approach which does not limit Europeanization to domestic changes in political and administrative structures or the content of national policy. Rather, cognitive and normative structures such as discourse, norms and values can also be impacted. Risse et al. (2001: 4–5), also take less-formal domestic changes into account, examining the effects of the EU on collective understandings of actors such as norms of citizenship or collective identities pertaining to the nation-state. On the whole, Europeanization can thus encompass wide-ranging structural and cognitive changes within domestic political systems due to pressures from the EU.

In this book, the Icelandic government is the key actor. Much like in studies focusing on EU member states, the independent variable is taken to be pressure emanating from the EU in the form of specific policy requirements, while domestic responses to these initiatives are seen as the dependent variable. The organization and behaviour of the Icelandic government administration is examined as it responds to EU policy requirements, both in terms of uploading and downloading. The extent to which the Icelandic government has been able to have a say in the content of EU policy is explored, as well as the degree to which EU policy has been transposed and implemented in Iceland. This can of course entail policy change, but also changes to political processes and institutional change.

The outcome of the dependent variable can be affected by a series of intervening variables, predominantly the institutional framework of the EEA Agreement which determines to a large extent the constraints and opportunities available to the Icelandic government during the uploading and downloading processes. Furthermore, the outcome can vary depending on the policy area in question and the specific conditions within the domestic system such as party politics, interest group mobilization, public opinion, the existence of veto points in the administrative structure or a particular culture which hinders or facilitates domestic adaptation. Furthermore, Iceland is smaller than any of the current EU member states in terms of population. Therefore, Iceland’s small size and relatively limited administrative capacity need to be taken into consideration as important intervening variables when examining the Europeanization process. Due in particular to the small size of Icelandic society, interest groups often have very close and personal ties with the government and have actively participated in the policy process, and so their role should not be taken for granted.

Although this volume focuses particularly on the adaptation of policies, processes and institutions in Iceland to EU requirements, cognitive elements are also considered to be important. Accordingly this study aims to gauge the incentives behind the government’s reactions as well as analysing the practical outcome of uploading and downloading. For example, whether government incentives relate primarily to material interests or social norms of appropriate behaviour. This incentive structure is closely linked to the theoretical underpinnings of the Europeanization process, as will be explored further in the following section.

Theoretical grounding in new institutionalism

It is important to note that Europeanization is not a theory in itself but has a broad agreement with the conceptual framework of ‘new institutionalism’ (Bache 2008: 15; Bulmer and Burch 2005: 863; Featherstone and Papadimitriou 2008: 26; Vink and Graziano 2007: 13). In other words, an institutionalist understanding is frequently used to provide explanatory variables behind the Europeanization process. This view is particularly prominent among those who see Europeanization as arising from a mismatch or incongruence between the policies and practices of the EU and the domestic level (Bulmer and Burch 2005: 863). Therefore, an awareness of the new institutionalist literature is necessary for understanding how Europeanization works (Bache 2008: 13).

Different theories attach varying degrees of importance to the role of structure versus that of agency in political processes. Agents (or actors) are the entities capable of decisions and actions in any given context. Actors operate within a wider environment or structure that shapes the nature of their choices by setting limits to what is possible and by determining the nature of the problems which occur (Hill 2002: 26–27). From the 1950s to the 1970s, agency-centred theories were dominant in political science. However, in the 1980s and 1990s the so-called new institutionalism emerged, reflecting a gradual reintroduction of the importance of institutions (Pollack 2004: 137–38). New-institutionalist studies did not originate in the field of EU studies. However, given that the European Union is the most densely institutionalized international organization in the world, it is not surprising that this body of literature has been applied increasingly frequently to the study of the EU and its activities (Pollack 2004: 137–38).

New institutionalism does not constitute a single coherent theory (Knill 2001: 20). Three main strands of new institutionalism have emerged: rational choice and sociological and historical institutionalism. There are considerable differences between these different variants of the institutionalist framework regarding the way in which they define institutions and explain how they impact on actors’ motivations, preferences and behaviour (Hix and Goetz 2001: 18). Their uniting point is that they each assume that institutions are important factors which can affect political behaviour (Knill 2001: 20). This study takes the middle ground, drawing mainly on historical institutionalism. However, as historical institutionalism includes elements of both rational choice and sociological institutionalism, it is necessary to give an account of all three strands.

Rational choice institutionalism has a fairly narrow interpretation of institutions as formal rules, operating procedures and organizations of government (Vink and Graziano 2007: 13). Actors are assumed to follow a ‘logic of consequentialism’⁵ in the sense that they engage in a rational pursuit of self-interest, evaluating the likely consequences of their actions and seeking to maximize exogenously fixed preferences within a given institutional setting (Eilstrup-Sangiovanni 2006: 396; March and Olsen 1998: 949–50). Institutions serve to structure the interactions or the bargaining game between actors, providing them with opportunities and constraints and determining the strategies they are able to adopt in pursuit of their interests (Featherstone and Papadimitriou 2008: 26–27; Rosamond 2000: 116). Thus, institutions are generally conceptualized as intervening variables as they can affect the cost/benefit calculations of the actors involved and the strategies they use to achieve their interests, but institutions have no impact on the formation of the said interests (Knill 2001: 24). A rationalist account would thus assume power to be zero sum and expect national actors to continue pursuing established goals, albeit in a changing environment (Bache 2008: 13).

With respect to EU-induced domestic change, rationalist accounts argue that domestic institutions put pressure on governments to maintain the status quo to avoid the material costs that changes to institutional structures would entail. In order for downloading to occur, when incongruence exists between the EU and national level, the institutional framework must be able to exert external pressure for change to counter the internal pressures for maintaining the status quo. As actors generally try to maximize their interests, national governments will comply with the EU’s requirements only if the expected benefits of compliance exceed the potential gains of non-compliance (Eilstrup-Sangiovanni 2006: 396) or, inversely, if the potential costs of non-compliance exceed the costs of compliance. In the EU member states, domestic change can therefore be promoted by the Commission issuing infringement proceedings which can result in financial penalties in the form of a lump sum or a daily fine, depending on the scope and duration of the infringement as well as the capabilities of the member state (Borzel 2001: 806–08). So-called thin rationalist accounts, which border on recognizing a logic of appropriateness, also note that agents may pursue non-material goals and therefore argue that social sanctioning or shaming can also induce compliance. However, the choice mechanism is always a cost/benefit calculation (Checkel 2001: 558).

Rationalist approaches are undoubtedly conducive to parsimonious explanations. Howev...

Table of contents

• Front Cover
• Half Title
• Series
• Title Page
• Copyright
• Dedication
• Contents
• List of figures
• Preface
• Acknowledgements
• List of abbreviations
• Introduction
• 1 Europeanization: An analytical framework
• 2 Uploading in the EEA
• 3 Downloading in the EEA
• 4 Market competition in the electricity sector
• 5 European citizenship and free movement of persons
• 6 The Emissions Trading Scheme
• 7 The Food Law Package
• 8 Review of key findings
• 9 The EEA: Challenges and future scenarios
• Notes
• Appendix I: Interviews
• Appendix II: Internal EFTA documents
• Bibliography
• Index