Writing blank checks? How government funding affects interest organisations’ advocacy behaviour in a multi-layered context

Frederik Heylen (University of Antwerp) & Evelien Willems (University of Antwerp)

Public officials often count on the technical expertise of organised interests when designing policy and employ them as intermediaries to facilitate subsequent implementation. And since organised interests tend to depend on government’s financial support, we can observe that rules attached to government’s provision of funding shapes the advocacy behaviour of organised interests. While this relationship has been well-documented in national contexts, we know surprisingly little about the drivers of organised interests’ advocacy behaviour when they face funders at different levels of the EU’s multi-layered political system. In their article “Writing blank checks? How government funding affects interest organisations’ advocacy behaviour in a multi-layered context” published in the Journal of European Public Policy, Frederik Heylen and Evelien Willems draw on a survey of 727 Belgian interest organisations as well as an analysis of relevant legislation and expert interviews to show that organised interests’ reliance on sub- and supranational funding induces fewer interactions with government officials at the national level.  In contrast, organised interests depending on support of funders at the national level show no tendency to cut their ties with subnational governments. Frederik and Evelien argue that the specific funding rules employed at different levels of government account for this pattern: “Whilst national funding is used to incentivise cooperation across regions, subnational rules on funding are not conducive for multi-level advocacy behaviour”, often coming with stringent territoriality requirements.

Opening up by closing off: How increased transparency triggers informalisation in EU decision-making

Evelyn Coremans (KU Leuven)

In an attempt to shake off the secrecy surrounding the EU’s trade negotiations, the European Commission is obliged, since 2009, to immediately and fully inform members of the European Parliament of its deliberations with third parties. Some may say unsurprisingly, the transparency-enhancing role of the European Parliament has come in hand with an informalisation of communication between Commission and Parliament: As transparency threatens confidentiality and quick decision-making, Commission officials turned to an informalisation of communication to preserve the efficiency of their trade negotiations, yet arguably eroded the transparency gains achieved through the 2009 reform. In her article “Opening up by closing off: How increased transparency triggers informalisation in EU decision-making” published in the Journal of European Public Policy, Evelyn Coremans challenges the common perception that informalisation conflicts with the goals of transparency reforms. Focusing on the case of the EU-US negotiations over the Transatlantic Trade and Investment Partnership (TTIP), Evelyn develops a causal mechanism linking the increased transparency of TTIP negotiations to the informalisation of interactions between the Commission and the European Parliament. Evidence from her case study supports Evelyn’s expectation that the Commission’s informalisation of communication improved the quantity and quality of information exchange with members of the European Parliament, much in line with the goals of the transparency reform. Evelyn concludes that the “informalisation of Parliament-Commission communication for TTIP is an improvement to a system where secrecy and confidentiality between Council and Commission reigned supreme only a few years before.”

Many faces of dismantling: hiding policy change in non-legislative acts in EU environmental policy

Jan Pollex (University of Osnabrück) & Andrea Lenschow (University of Osnabrück)

As new policy initiatives shuttle through the EU’s institutions, we expect policy-makers to chisel away at the language contained in these proposals to make sure that policies’ anticipated effects match policy-makers’ preferences before they are formally adopted. Yet, even once a policy successfully exits the legislative arena, its actual impact may be subject to change. In their article “Many faces of dismantling: hiding policy change in non-legislative acts in EU environmental policy” published in the Journal of European Public Policy, Jan Pollex and Andrea Lenschow argue that the EU’s regulatory legislation typically provides the European Commission with opportunities to shape the actual effects of policies after their adoption by designing specific implementation measures. In light of the Commission’s prioritisation of fostering economic growth in response to the economic crisis, Jan and Andrea provide case studies of the EU’s ecolabel and ecodesign policies and show that the Commission had used its powers of specifying implementing measures to ease the regulatory pressure in the EU’s environmental policy. Jan and Andrea’s analysis highlights that in order to evaluate the EU’s environmental policy it is necessary to pay close attention to the actual implementation of policy, as “we might see policy dismantling in disguise, effectively softening environmental regulatory pressure on producers within rather stable regulatory structures.”

The EU as a savior and a saint? Corruption and public support for redistribution

Monika Bauhr (University of Gothenburg) & Nicholas Charron (University of Gothenburg)

Strike a conversation with a stranger about the EU these days and you are (rather) unlikely to end up chatting about the EU’s Cohesion Policy. But why not actually? After all, development projects funded in the context of the Cohesion Policy account for roughly a third of the EU’s annual budget and the policy is the bloc’s key tool to address social and economic disparities both across and within its Member States. In their article “The EU as a savior and a saint? Corruption and public support for redistribution” published in the Journal of European Public Policy, Monika Bauhr and Nicholas Charron address the gap in our knowledge on European citizens’ support for the EU’s cross-border redistribution of resources. Drawing on original survey data tailored to capture public opinion on the EU’s Cohesion Policy in 15 Member States, Monika and Nicholas conclude that citizens generally express some sense of support for redistribution within the EU. However, their analysis shows that this support is shaped by citizens’ perceptions of domestic corruption. Monika and Nicholas find that those who perceive domestic institutions as performing poorly “are more likely to perceive the EU as both a potential ‘savior and saint’, that will ultimately ensure better public service delivery and governance systems less plagued by corruption and mismanagement of public funds.”

The state strikes back: industrial policy, regulatory power and the divergent performance of Telefonica and Telecom Italia

Fabio Bulfone (Max Planck Institute for the Study of Societies)

When the European Commission began pushing for the liberalisation of the telecommunications sector in the mid-1980s, EU Member States lacking the means and capacity to fuel an effective industrial policy faced an economic worry: Will their policies be enough to help key domestic telecommunications players survive the mergers and foreign acquisitions expected to unfold in the wake of European integration? In his article “The state strikes back: industrial policy, regulatory power and the divergent performance of Telefonica and Telecom Italia” published in the Journal of European Public Policy, Fabio Bulfone compares the fortunes of industrial policies implemented by the Italian and Spanish governments to aid the internationalisation of their main domestic telecommunications firms, Telecom Italia and Telefonica. Fabio explains why despite the similar styles of industrial policies pursued by Italy and Spain, Telefonica managed to transition from a monopolist focused on the Spanish market into a ‘European champion’, while Telecom Italia did not to follow the same trajectory. His analysis shows that the Italian government failed to convince key domestic investors of becoming the main shareholders of Telecom Italia during its liberalisation process. In Spain, on the other hand, the government was able to draw on the support of Spanish investors and “the strong hardcore of domestic banks created after privatisation gave Telefonica the ownership and managerial stability necessary to successfully expand abroad.”

The political economy of pension financialisation: public policy responses to the crisis

Anke Hassel (Institute of Economic and Social Research (WSI) of the Hans-Böckler-Foundation) & Tobias Wiß (Johannes Kepler University Linz)

By Tobias Wiß

Financialisation – the increasing reliance of society, the economy and politics on financial market solutions – has become a key feature of post-industrial economies. Pension reforms in recent decades reduced benefit levels of public pensions and expanded non-state – occupational and personal – pre-funded pensions, resulting not only in a process of privatisation but ultimately in the financialisation of pensions. As the result, pension policy is not only a social policy that affects retirement income, but also a financial one that impacts savings rates, corporate finance and, indirectly, corporate behaviour.

The first JEPP special issue in 2019 on “The political economy of pension financialisation: public policy responses to the crisis” edited by Anke Hassel and Tobias Wiß addresses how and why pension reforms came to rely more on financial markets and how public policy reacted to the financial crisis.

The collection of articles sheds light on pre-funded private pensions as one key component of financialisation, as they turn savings into investment via financial services providers. Public pension systems face financial pressures, resulting from ageing and rising public debt, while financial services are keen to move into the market of private pension provision. The financial crisis has triggered policy responses including shifts in investment strategies and also a re-assessment of the role of pre-funded private pensions as a complementary, rather than a superior, source of old-age income.

The special issue focusses on three main issues: The emergence of pension financialisation, reactions to financial crises and regulatory variation.

Politics and reform packages have mattered for the introduction of private pensions and especially minimum benefits in Germany. The overview of the historical development of pension financialisation in Denmark, the Netherlands and Sweden lays down how the social partners (trade unions and employer associations) managed to organise pre-funded pensions collectively allowing that financialised pensions serve social interests.

With regard to responses to financial crises, Germany, the Netherlands and the UK show processes of reinforcement instead of a weakening of pension financialisation.

A further set of articles looks more detailed at regulatory variation: The role of organised interests including adaptions of their strategies in times of financialisation, the influence of investment professionals promoting liability driven investment and the independent role of the state in shaping regulatory decisions. Apart from nation-states, the European Union does not promote a coherent pension financialisation agenda as one might expect. Instead, the EU’s pension strategy is rather accidental and multi-faceted, consisting of a mix of market creation, emulation and correction. In sum, it seems that pension financialisation and the broader financialisation of the economy are here to stay, despite negative developments during and after the financial crisis. Governments are quite aware that pre-funded pensions play a role for corporate finance, economic growth and financial markets in general.

Political and instrumental leadership in major EU reforms. The role and influence of the EU institutions in setting-up the Fiscal Compact

Sandrino Smeets (Radboud University Nijmegen) & Derek Beach (Aarhus University)

The crises that have beset the EU in the past decade have provided plenty of opportunities for actors populating the EU’s political system to step up and assume political leadership. A product of the eurozone and sovereign debt crises, the Treaty on Stability, Coordination and Governance – or short, the Fiscal Compact – has been widely attributed to the political leadership of the German chancellor, Angela Merkel. However, these accounts have unfairly overlooked the critical role EU institutions have played in ensuring a swift passage of the Fiscal Compact, say Sandrino Smeets and Derek Beach. In their article “Political and instrumental leadership in major EU reforms. The role and influence of the EU institutions in setting-up the Fiscal Compact” published in the Journal of European Public Policy, Sandrino and Derek employ a process-tracing design to highlight the leadership of EU institutions, such as the Legal Service of the Council Secretariat. The findings of their analysis have wider implications for our understanding of how the European Council’s enhanced presence in EU decision-making has affected the role of EU institutions. Sandrino and Derek’s work suggests that “the informal and ‘isolated’ character of decision-making at the European Council level, paradoxically, created more instead of less dependence on EU institutions to translate the broad […] priorities [of Heads of State and Government] into actual reforms.”

Analysing the trade-off between transparency and efficiency in the Council of the European Union

Stéphanie Novak (Ca’ Foscari University of Venice) & Maarten Hillebrandt (University of Bielefeld)

Negotiating behind closed doors allows policy-makers to speak their minds freely and secures the efficiency of decision-making processes. This argument has long served members of the Council of the European Union as a justification to refuse public disclosure of documents in ongoing decision-making procedures. In their article “Analysing the trade-off between transparency and efficiency in the Council of the European Union” published in the Journal of European Public Policy, Stéphanie Novak and Maarten Hillebrandt probe the veracity of claims that a trade-off exists between the public’s ability to follow negotiations in the Council and the latter’s efficiency. Drawing on data from the Council’s replies to citizens’ applications requesting access to undisclosed documents as well as interviews with Council members, Stéphanie and Maarten show that the effect of transparency on the Council’s efficiency is far from unidimensional. Their analysis calls into question “any reductive representation of the relation between transparency and efficiency as a ‘weighing scale’ trade-off and the idea that these two legitimating values would be unconditionally incompatible.”

The Europeanization of national judiciaries: definitions, indicators and mechanisms

Urszula Jaremba (University of Utrecht) & Juan A. Mayoral (University of Copenhagen)

Tasked with enforcing the rights derived from EU law in Member States, national judges play a critical role in the process of European integration. However, we still know very little about how European law shapes the functioning of EU Member States’ judiciaries, say Urszula Jaremba and Juan A. Mayoral. In their article “The Europeanization of national judiciaries: definitions, indicators and mechanisms” published in the Journal of European Public Policy, Urszula and Juan offer three solutions to foster our understanding of the Europeanization of national judiciaries: a conceptualisation of Europeanization that captures the attitudes and profiles of national judges, a range of indicators that allow us to measure changes in attitudes and behaviour among national judges, and a distinction between utility-driven and socialization mechanisms that can explain these changes. Due to its complexity, mapping the effect of EU law on Member States’ courts is an ambitious exercise. Taking a step towards achieving this goal, Urszula and Juan’s contribution “opens up a whole new stream in the socio-legal research agenda that is crucial for a more comprehensive understanding of the processes of Europeanization of national courts.”

EU environmental policy in times of crisis

Charlotte Burns (University of Sheffield), Peter Eckersley (Nottingham Trent University) & Paul Tobin (University of Manchester)

Ever since expanding supranational environmental policy in the 1980s, the EU has carefully crafted a reputation as a global environmental leader. Yet, a series of recent academic contributions claim that the post-2009 economic recession and a growing sense of Euroscepticism across Member States have left their mark on the EU’s environmental policy ambition. In their article “EU environmental policy in times of crisis” published in the Journal of European Public Policy, Charlotte Burns, Peter Eckersley and Paul Tobin analyse whether the past decade’s conglomerate of crises has effectively dismantled the EU’s environmental policy ambition. Identifying all environmental legislation proposed and adopted by the EU between 2004 and 2014, Charlotte, Peter and Paul show that the EU’s environmental policy output indeed dropped in the immediate aftermath of the 2009 economic crisis. Notwithstanding this short-term effect, evidence from interviews with 35 policy-makers in Brussels suggests that other factors, including an increasing diversity among EU Member States and the maturity of the acquis communautaire, played a much more consequential role in the slowing down of the EU’s environmental policy ambition. The evidence presented in Charlotte, Peter and Paul’s contribution challenges perceptions “of a crisis ridden Union intent upon rolling back its environmental ambitions, but of a surprisingly resilient environmental policy actor that in the face of enormous challenges managed to keep the show on the road.”