This book explores EU regulatory capacity building in the context of a mismatch between rule-making authority and administrative capacity at the EU-level. It puts forward that the ensuing EU regulatory capacity gap is at least partially filled by specialised EU agencies. These EU regulatory bodies have emerged across numerous policy areas in the last three decades. Since they lack authority and administrative capacity, they seem to be symptomatic of the EUâs regulatory capacity gap, rather than a solution to it (further discussed in the first section of this chapter). However, despite their considerable limitations, EU regulatory bodies fulfil crucial regulatory functions and have developed into influential regulatory bodies. They have been able to do so because national regulatory bodies devote their time and resources to the working groups, expert committees and decision-making bodies of these EU agencies (see second part of the chapter). In contrast to other literature in this field, this book hence argues that the key to understanding EU regulatory capacity building is the question why national regulators are willing to support EU agenciesâpotential rivalsâin their work. Previous literature has been too ready to assume that national regulators are willing to do so because they have shared professional norms, are functionally interdependent or fear interference from political principals. Existing literature hence overestimates the resilience of the complex cooperation and coordination processes that are the backbone of EU regulatory capacity building (further discussed in the third section of this chapter). This book suggests that whether national authorities are willing to support EU agencies in their workâthus building EU regulatory capacityâdepends on whether supporting EU agencies helps national regulators to handle the key regulatory challenges they face in their day-to-day work (the last section of the chapter outlines this key argument).
1.1 EU Agencies as Answer to the Regulatory Capacity Gap of the EU?
Faced with global markets and supply chains, the traditional administrative toolbox of the state has become increasingly ineffective (cf. Boin and Rhinard 2008). While international and supranational organisations have been gradually more entrusted with the task to set harmonised regulatory standards to meet these challenges, national administrations remain in charge of applying and enforcing harmonised rules on the ground (Eberlein and Newman 2008). This means we face a tremendous regulatory capacity gap when cross-border flows of goods, services, capital and people are concerned (cf. Lodge 2014). While shared regulatory standards are set through international and regional regulatory bodies, national administrations continue to hold the authority and the capacity to regulate industry on the ground. The dangers of this regulatory capacity gap are particularly grave in the European Union, where market integration has gone furthest (cf. Heidbreder 2014). Whilst the EU sets regulatory standards and has the responsibility to manage cross-border risks in its integrated market, its administrative capacity is far too small to fulfil this duty (Eberlein and Newman 2008; Van Boetzelaer and Princen 2012), and national administration remain responsible for implementation of EU law (Versluis 2007).
The mismatch between the regulatory responsibilities of the EU and the administrative capacities at its disposal are one of the greatest flaws of its regulatory system (Majone 2000). While, for example, there is only one set of shared EU rules about ship safety, it is national authoritiesânot EU bodiesâthat have the administrative capacity to verify the safety of ships on the ground. And while, for example, all EU countries have shared rules about the safety evaluation of pharmaceuticals, it is experts of national agenciesârather than EU expertsâthat have the resources and the knowledge to monitor and evaluate whether a medicine on the market is safe to use. As Majone notes âregulation is not achieved simply by rule-making; it also requires detailed knowledge of, and intimate involvement with, the regulated activity â (Majone 2000, p. 280). This âintimate involvementâ is found in national administrationsârather than in supranational bodiesâin the regulatory regimes of the EU. The ensuing capacity gap has not only been noted to threaten the legitimacy of the EU (Eberlein and Newman 2008; Majone 2000), but also to question its very governability (Scharpf 1999).
In many ways, then, the Member States and the institutions of the European Union have created a system that is based on a fundamental disparity between regulatory responsibilities, regulatory authority and administrative capacity (cf. Heidbreder 2015). While the EU needs to be able to manage cross-border risks and to create a level-playing field for industry in an integrated market, its highly dispersed regulatory system has rendered the fulfilment of these responsibilities exceedingly difficult: regulatory practices of national administrations continue to differ widely, which opens the door for regulatory arbitrage, while also creating loopholes for undetected risks (such as contaminated meat) to cross internal borders freely.
Indeed, the integrated market of the EUâand the cross-border risks associated with itârun the risk of creating a âsituation where different parts of inter-connected systems are separately administered in such a way as to render the total administrative effect ineffective or counter-productiveâ. Christopher Hood refers to such situations as âmulti-organisational sub-optimisationâ (1976, p. 17), which characterise the limitations of government to realise its capacities. If, for example, food control authorities in France do not carry out effective controls, health risks from unsafe food could quickly spread to other EU countries, thus rendering regulation ineffective. If authorities in one country do not enforce rulesâor interpret them in a lax mannerâregulatory loopholes are created that can render the given EU-wide regulatory regime counter-productive.
The regulatory capacity gap of the EU has hence provided pressure to act (Majone 1997), which political actors in the EU have responded to within the framework of the dominant norm of delegation to non-majoritarian institutions that has been observable across the globe (Gilardi 2005; McNamara 2002): specialised EU regulatory bodiesâsuch as agencies, committees and officesâhave mushroomed over the past decades (Busuioc et al. 2012; Busuioc, 2013; Dehousse 1997; Kelemen 2002, 2005; Maggetti and Gilardi 2011; Majone 1997; Mathieu 2016; Levi-Faur 2011; Rittberger and Wonka 2011). Indeed , it has been argued that âthe idea took hold that no area of EU business was complete without its agency or authorityâ (The Economist, 2001). In the field of economic and social regulation, the number of such bodies has been continuously on the rise, especially since the early 2000s. Whilst the European Medicines Agency was already established in 1995, other policy areas soon followed suit, such as the founding of the Committee of European Banking Supervisors in 2004, which was then surpassed by the European Banking Authority in 2011. Equally, we saw the emergence of the European Maritime Safety Agency and European Food Safety Authority in 2002, whilst the European Chemicals Agency started working in 2007. In total, the EU currently has 34 of these so-called âdecentralised agenciesâ. In 1990, only three of these bodies existed. By 2000, this number had risen to twelve, and by 2005 this number had reached 25.
Some commentators have described this as an exercise in âbureaucratic self-aggrandizementâ on part of the European Commission (Kelemen 2002, p. 98). Specialised EU regulatory bodies may indeed seem to be able to close the EUâs regulatory gap, for example by supporting consistent implementation of EU law by national regulators (Kaeding and Versluis 2014; Versluis 2012). However, instead of building a regulatory interface with the regulated industry, EU regulatory bodies create an interface with the relevant authorities in the Member States (Eberlein and Grande 2005). As a result, EU regulatory bodies are usually not involved in risk management âon the groundâ. This remains the responsibility of national regulators that represent the operative arm of this transnational bureaucracy (cf. Wilson 2000 [1989], pp. 31â110). Next to these severe restrictions to their formal authority, their administrative capacities are in fact miniscule. Take the European Bank...