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Documents: After Delegation: Regulatory Agencies and Network Governance
 

Reshaping European Regulatory Space
David Coen and Mark Thatcher
NEWGOV Policy Brief no. 28, Spring 2008
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Academic Articles on the Project Findings
David Coen and Mark Thatcher
As a result of the project, two articles have been published by David Coen and Mark Thatcher in the year 2008: “Network Governance and Multi-level Delegation: European Networks of Regulatory Agencies” (Journal of Public Policy, 28:1, pp. 49-71), and “Reshaping European Regulatory Space: An Evolutionary Analysis” (West European Politics, 31:5)
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Final report: European Regulatory Networks
David Coen and Mark Thatcher
Co-coordinating the single market and EU regulation is a complex task. Much work has focused on increased demand for EU regulation, be this from firms, governments or the European Commission. But, for regulation to be implemented, appropriate institutions for the greatly enhanced EU regulation also have to be established. This study looks at such institutions, notably the European Regulatory Networks (ERNs) composed of national regulators in three sectors; Telecommunications, Energy, and Securities. This report is divided into four parts. The first offers an analysis of the overall ‘regulatory space’ in Europe and its evolution. Part 2 offers an in depth analysis of the ERNs’ functions and powers. As ERNs face a tension between pressures for centralisation and those for autonomy and decentralisation, Part 3 examines how ERNs operate in practice and are perceived by key actors by presenting the findings of a survey of National Regulators in 27 member states across three sectors: Telecommunications, Energy and Securities. The fourth part offers overall project conclusions.
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Analysis – Independent Regulators in Europe
Mark Thatcher
The working paper presents data on the behaviour of regulatory agencies after delegation; it maps and analyses their relationships with elected politicians by looking at how the latter use their formal controls over IRAs, both in general and in two sectors, telecommunications and securities/financial services. Thus it examines nominations, departures, tenure of IRA members and resources. It finds that elected politician have not, in general, used their formal powers to appoint party politician or known party supporters. Equally, they have not dismissed IRA members or rarely forced them out of office before the end of their terms. Instead, most IRA members serve relatively long periods, well beyond those of the average minister, Although IRAs have limited budgets and staff, these appear to have grown over time and to be substantial, especially have new broader IRAs have been created. Finally, elected politicians have not abolished IRAs frequently. When changes have been made, they have expanded the scope of IRAs.
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A Preliminary Analysis of the Survey on National Regulators in Telecommunications, Energy and Securities
David Coen and Mark Thatcher
Co-coordinating the single market and EU regulation is a complex task. Much work has focused on increased demand for EU regulation, be this from firms, governments or the European Commission. But, for regulation to be implemented, appropriate institutions for the greatly enhanced EU regulation also have to be established. This survey looks at such institutions, notably the European Networks of National Regulators (ERNs) in three sectors; Tele-communications, Energy, Securities.
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Regulatory Networks Questionnaire
David Coen and Mark Thatcher
This deliverable gives an overview on the questionnaire phase of the project that ran from December 2006 to May 2007. The questionnaire was distributed to members of the Committee of European Securities Regulators (CESR), the European Regulators Groups (for Telecommunications, ERG) and the Committee of European Energy Regulators (CEER). After several reminders, we can currently report a response rate of 48% for all networks surveyed (37% CESR, 58% ERG and 48% CEER). The data from the questionnaire will be used to feed into the theoretical ground work that has been laid in previous project deliverables and will form the basis for the up-coming empirical papers. In particular, the questionnaire data in combination with interviews will enable more elaboration on the practical functioning of the networks, how they are seen by the different NRAs and the extent to which they have shifted influence over the regulatory structure away from national governments, NRAs and the European Commission.
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Analysis: Regulation after delegation
Mark Thatcher
From the mid-1980s onwards, many sectoral independent regulatory agencies (IRAs) have been created, notably in telecommunications and other network industries. The working paper begins by using principal-agent theory to explore why elected politicians delegated powers to IRAs. It then examines the strengths and limits of principal-agent (PA) theory in analysing post-delegation behaviour by IRAs, notably in stock exchanges and telecommunications. It suggests that while PA theories oblige us to analyse the formal framework of delegation and that although IRAs may be called 'independent', their independence is limited and can vary, since their principals (and other actors) keep controls over them, whilst the extent of their formal powers also vary. PA theory also provides a language and important concepts such as 'principal' or agency losses' for discussing delegation. At the same time, it is a broad framework that can be used in conjunction with other concepts. However, the neat division between principals and agents may be insufficient or even misleading when analysing post-delegation use of controls. Moreover, unexpected events may disrupt the anticipated relationships foreseen at the time of delegation. In addition, PA theory tends to present a single delegation, whereas in practice, a series of delegations are possible. The PA framework concentrates on formal controls. However, informal relationships and controls may become important, and IRAs may develop unanticipated strategies and resources. Finally, PA model focuses on formal controls as methods of accountability whereas informal ones may be equally important. The paper concludes that whilst the PA framework offers many useful elements, we need to go beyond it, or at least supplement it, in looking at regulation after delegation and suggests directions for research on regulation after delegation.
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After delegation: Regulatory Agencies and Network Governance - Issues, Actors and Approach
David Coen and Mark Thatcher
Regulation has grown both at the EU level and at the national level. Recently the EU has sought to coordinate member state regulatory implementation. In particular, it has established networks of national regulatory authorities, notably in public utility sectors. These authorities are often national independent regulatory agencies (IRAs), to which governments have delegated powers. We study how these IRAs have behaved after delegation within European networks, focusing in particular on two sectors: telecommunications and securities regulation. European networks of national regulators are worth studying as they offer new tools of "execution" in terms of policy-making and decision making, deliberation and representation. Moreover, they allow us to consider the "emergence" of delegation to non-majoritarian governance. Finally, trans-European networks relate to the emergences of cross-national systems of governance, and also to the "evolution" of IRAs after formal delegation. Studying networks of national regulatory authorities thus allows us to tackle central questions of changes in the nature of regulation from hierarchical regulation to coordinated regulation, and to look at IRAs operate within them after delegation.
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The growth of network governance and regulation in Europe
David Coen and Mark Thatcher
Although the creation of national regulatory authorities is on the rise across the European Union, the liberalisation of markets has not created uniformed regulatory solutions. National governments and the European Commission, recognising the need for harmonized interpretations and implementation of EC regulations, have fostered the creation of formal and informal networks of national regulatory authorities. While the legal basis of these networks varies, the rationale for their creation is to establish forums for information sharing and potential regulatory learning. The results of such networks have varied from limited convergence in rail policy to the development of soft laws and implementation norms in Banking and Telecommunications. This paper explores the origins and organisation of two of the most proactive European networks of regulators; the European Regulators Group in Telecommunication and the Committee of European Securities Regulators. Significantly, the paper shows that these new networks have evolved beyond their initial delegations in terms of their regulatory competencies and ambitions.
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