Market citizenship and the prospects for participatory regulation in
the EU
Ian Bartle
Paper tabled at the Barcelona workshop ‘The Politics of Regulation’, 29-30th
November 2002.
Ian Bartle
Centre for the Study of Regulated Industries
School of Management
University of Bath
Bath
BA2 7AY
(Previously presented at the UACES 32nd Annual Conference 2nd - 4th September
2002, Queen’s University Belfast)
Abstract
Economic rights in the EU’s single market (the four freedoms) and the idea of ‘market
citizenship’ have led to pressures for enhanced EU citizenship. The emergence of new
European markets and their regulation can also be envisaged to lead to pressures for
more inclusive and participatory forms of EU regulation and market governance. The
Commission’s White Paper on governance and its search for better participation and
inclusiveness appears to reflect these pressures. This paper examines these
developments and considers the prospects of participatory regulation in the EU,
particularly from the perspective of environmental and consumer interests. While
improved consultation procedures offer some hope it is argued that the proposals
related to the White Paper focus too much on the efficiency and effectiveness
dimension of regulation to the detriment of participation and inclusiveness.
1.
Introduction
The terms ‘market’ and ‘regulation’ do not appear to sit easily with common
notions of participatory citizenship. The market appears to be restricted to the rights
only of economic actors and individuals are limited to strategies of ‘exit’ while
regulation conjures up visions of a technocratic exercise by specialists adopting
arcane mechanisms to correct market failure. In the EU the term ‘market citizenship’
signifies the limited rights which stem from the EU’s single market. However, by
expansive interpretation of these rights in the European Court of Justice they have
become to be extended to all citizens rather than only economic actors (Everson
1995). In the regulation of markets, systems of ‘responsive’ or ‘participative’
regulation have been proposed which would extend rights of participation to citizens
(Ayres and Braithwaite 1992), while notions of public service and the public interest,
especially in the utility industries, form the basis of extending rights beyond economic
actors to all citizens (Ernst 1995; Graham 2000).
The possibility of a more participatory system of regulation in the EU is raised
in the Commission’s White Paper on Governance (Commission 2001a). One of the
key aspirations of the paper is ‘better involvement and more openness’ (p.4), and a
key principle of good governance is ‘wide participation throughout the policy chain from conception to implementation’ (p.10). These were reflected and developed in
two Commission working groups on ‘better regulation’ (Commission 2001b) and on
‘consultation and participation of civil society’ (Commission 2001c). One particular
regulatory approach suggested is ‘co-regulation’ which, with echoes of Ayres and
2
Braithwaite’s ‘responsive regulation’, is seen to promote inclusion and involvement
of ‘stakeholders’ while being flexible and effective.
All of this raises a number of questions, the most basic of which is: can the EU
regulatory order be developed in such as way as to enhance an EU participatory
citizenship? More particularly, what scope do the proposals on regulation in and
related to the White Paper offer to improve participation and inclusion. What are the
opinions of the actors, particularly public interest NGOs, who appear to be the most
appropriate actors to become more included? Do they have any constructive
suggestions for enhancing participation within the EU’s system of governance?
The paper commences by considering the connection between market
citizenship and EU citizenship. It notes that there is a functional logic of market
citizenship which sets up pressures for broaders notion of citizenship. Section 3 then
considers the way in which this functional logic towards a participatory form of
regulation could apply in the EU’s single market. Section 4 then considers the ideas of
participatory regulation and the ways in which they are reflected in the Commission
White Paper on governance. Section 5 investigates the scope the White Paper offers
for greater participation in particularly by focusing on the response to the White Paper
of public interests such as consumer and environmental interests. It is concluded that
while better consultation procedures offer some potential, the proposals for
participatory regulation are limited.
2.
Market citizenship and functional pressures for EU citizenship
Traditionally, citizenship of the EU has been limited to the narrow idea of the ‘market
citizen’ (Everson, 1995). The Treaty of Rome prescribes a number of rights to citizens
of EU member states which are based on being an economic actor in the common
market. From the four freedoms of the common market (freedom of movement of
goods, services, capital and persons) derive a number of rights which apply to citizens
of EU member states. On this economic basis market citizenship is limited firstly by
its exclusiveness. That is, in contrast to most contemporary notions of citizenship
membership, it extends only to the citizens of EU member states who are economic
actors and participants in the European single market. Second, market citizenship only
extends to ‘citizenship-as-rights’ while contemporary notions of citizenship also
include ‘citizenship-as-participation’ and ‘citizenship-as-belonging’.
3
The market citizen has, however, moved towards something akin to EU
citizenship. The principal way this has occurred is by expansive interpretation of the
Treaty of Rome by the European Court of Justice (ECJ). Since the 1970s there have
been a number of cases, principally based on the free movement of persons, which
have expanded the legal notion of citizenship rights from the restricted group of
economic actors to all citizens of EU member states (Downes, 2001). This movement
from the exclusive category of economic actors towards the inclusive category of all
citizens takes the notion of citizenship from the needs of the market (the market
citizen) towards an incipient form of EU citizenship:
Although the rights are built upon the foundation of economic activity, and
so can be described as ‘market rights’ or rights pertaining to ‘market
citizenship’, their extent and implementation by the ECJ goes far beyond the
needs of the integrated labour market (Downes, 2001, p.96-97).
Downes argues that the motive force behind this shift ‘has more to do with the ECJ’s
recognition of the EU’s need to win the hearts and minds than it has to do with any
direct economic imperative’ (p.97). Since the Treaty of European Union (agreed in
1991) provided a treaty basis for a more complete notion of citizenship and appeared
to herald stronger political advocacy of Union citizenship, the ECJ has reined back its
proactivism. However, political advocacy has been uncertain and hesitant and
contemporary substantive notions of Union citizenship seem to be draw significantly
from market citizenship - current Union citizenship therefore appears to owe much to
the ‘legacy of the market citizen’ (Everson, 1995).
The possibility that there is a functional basis for the expansion of market
citizenship should not be dismissed. The development of EU social policy, for
example, has been linked to economic pressures and social policy issues such as
gender equality, health and safety and labour mobility are closely allied with
citizenship. EU social policy is certainly limited in its scope and effects compared to
national social policy, but Leibfried and Pierson (2000) argue that ‘the economic and
institutional dynamics of creating a single market have made it difficult to exclude
social issues from the EU’s agenda’ (p.268). According to this argument it is not
primarily the actions of supranational actors in the Court and the Commission who
have aimed to promote integration but the spillover pressures that have arisen from
the creation of the single market. Leibfried and Pierson (2000) note that a central
aspect of political economy is that ‘economic action is embedded within dense
4
networks of social and political institutions’ thus social and political issues cannot be
isolated from the economic. Correspondingly at EU level the single market - which is
supranational - and social policy (and citizenship) - which is national, cannot be
neatly segregated. The pressures for an enhanced EU citizenship emerging from a
limited market citizenship can therefore be perceived as arising from the development
of the single market.
3.
New markets, the regulatory state and pressures for participatory
regulation
There is the possibility that this functional logic (markets giving rise to
pressure for citizenship) could develop more widely with the rise of new markets in
Europe and the regulation of those markets. Regulation has increasingly been seen as
the most significant dimension of the EU policy process (Majone, 1996).
Liberalisation in the utility industries (gas, electricity, water and telecommunications),
for example, has led to new markets not only at the national level but also single
European markets and these markets are accompanied by new forms of regulation. In
the new European markets pressure could arise for both new citizenship-as-rights and
citizenship-as-participation. Citizenship-as-rights could include, for instance the
entitlement to an affordable service or to consumer information on products and
services (Sauter 1998). Citizenship-as-participation could also extend to the right of
participation in the regulatory process. The latter might be practically realised through
public interest groups representing citizens’ interests, such as consumer or
environmental interests, having a significant role in the regulatory process.
Understanding the pressures for participatory regulation can be derived from
examination of the shift from the ‘interventionist state’ to the ‘regulatory state’. The
rise of competition and new markets is part of a general Europe-wide phenomenon of
regulatory state (Majone, 1994, 1997). In the interventionist state, accountability and
legitimacy could be achieved (if not necessarily adequately) by ministerial
responsibility and parliamentary accountability. The traditional relationship between
the state and citizen in public administration was based on public service and trust
(Haque, 1999). Less salient were citizens’ political rights of public accountability and
participation. In the utilities in Britain, for example, traditionally there was some
limited representation of consumer issues in the utilities with varying forms of
5
consumer councils but they were weak and legitimacy was highly dependent on
parliamentary accountability (Thatcher, 1998).
The new regulatory state closely parallels new systems of public
administration in which citizens are transformed into customers or clients and the
relationship between the state and the citizen is based much more on competition.
Legitimacy and accountability are principally achieved by competition and businesslike practices which are perceived to lead to the delivery of better services. If the
service is inadequate the citizen is able to withdraw their custom and go elsewhere they have the power of ‘exit’. The shift towards a privatised economy and regulatory
state is now well entrenched in Britain and involves a new relationship between the
state and the citizen. The citizen is transformed from a passive recipient of services to
an active consumer making choices in a competitive market place (Prior et al, 1995,
p.15). The utility industries are an excellent example of this transformation, once
nationalised monopolies, they are now mostly privatised and operating in competitive
markets.
The regulatory state, however, may pose a threat to the achievement of
legitimacy because of the privatisation of provision and the delegation of
responsibilities by ministers to technocratic agencies. There are questions about
whether the new relationship between the state and the citizen in relation to public
services is adequate (Haque, 1999). One fundamental problem of the notion of
‘citizens as consumers’ is that the ability to pay becomes central to the relationship. In
the utilities there are doubts about whether the ‘citizen as consumer’ model is
adequate for the provision of essential services when competitive markets often tend
to favour economically strong consumers (Graham, 2000; Ernst, 1994, p.192).
However, traditional ways of achieving citizens’ rights, accountability and legitimacy
are being reshaped to suit the regulatory state and offer the possibility of enhanced
notions of citizenship, particularly citizenship-as-participation. New roles for
achieving legitimacy and accountability can be envisaged by enhancing the role of the
citizen, as a consumer or environmental interest, in the regulatory process.
In Britain there is some evidence of a functional logic whereby new markets
have created pressures for a more participatory form of regulation. The rapid shift
towards a market orientated regulatory state has left systems of accountability and
legitimacy with much ‘catching up’ to do (Graham, 1998). In the 1990s a crisis of
accountability in regulation, with questions about service quality and those
6
responsible, was perceived and led to questions about the new model. The neo-liberal
approach to the problem is that citizens are consumers in markets and the problems
will subside when fully competitive markets are established. This catching up,
however, could involve alternatives or complements to the promotion of competition
based on new systems of citizenship in regulation. Ernst (1994) suggests a ‘socialcitizenship’ approach to utility regulation which recognises collective rights as well as
individualist consumer rights and argues for a more active role for regulators in
promoting these rights. A policy response of the Labour government since 1997 has
been an attempt to strengthen the role of the consumer, increase regulatory
transparency and open access to information. The proposals, enacted in the Utilities
Act 2000 contain elements of citizenship which include the strengthening the rights of
disadvantaged consumers and ensuring all can benefit from competition (Graham,
2000, p.148), and proposals for strengthening the role of consumer councils, by
creating statutorily independent consumer councils, suggest the possibility of
increased citizen participation. The empowerment and encouragement to participate
apparent in the statutory incorporation of the consumer interest into the regulatory
process can be interpreted as a move towards a republican style of regulation.
Republican theory of participative citizenship appears to offer a theoretical
basis for greater citizenship in utility regulation. A republican democracy envisages a
‘deeper democracy’ than conventional liberal democracy with an active citizenry and
a deeper incorporation of public interest groups (e.g. consumer and environmental
interest groups) into the public policy process (Schwarzmantel, 2000). In public
services a ‘participative citizenship’ has also been called for (Prior et al, 1995).
Though far from easy to implement this would entail institutions and procedures to
open up decision making and empower citizens. In regulation, Ayres and Braithwaite
(1992) distinguish a republican model of regulation from neo-corporatism, liberalism
and pluralism. Republicanism envisages a more direct participatory role for citizens
and public interest groups (as opposed to producer groups) than neo-corporatism and
an empowerment of, and rights for, weaker interests which are lacking in liberalism
and pluralism. There is an emphasis on direct citizen involvement but republican
theorists and analysts of republicanism and regulation also recognise the importance
of institutionalisation and associations as ways to realise greater participation.
7
4.
Regulatory citizenship and the EU’s White Paper on governance
The issue of participation in regulation is treated at length in Ayres and
Braithwaite’s (1992) book Responsive Regulation. Ayres and Braithwaite draw from
republican notions of communitarian empowerment to envisage an enhancement of
participation in the regulatory process (p.17). As well as increasing choice in the
market (rights of ‘exit’) they also stress ‘voice’ rights by empowering the citizen by
giving them the right to participate in local area decision making and participate in
public interest associations up to the national level. The latter would connect to the
regulatory decision making process by a form of ‘tripartism’ in which ‘Public Interest
Groups’ (PIGs) would be empowered in regulatory decision-making. Ayres and
Braithwaite note that ‘tripartism is a process in which relevant public interest groups
(PIGs) become the fully fledged third player in the game’ (p.56). Tripartism would
promote participation by granting PIGs access to regulatory information and by
giving them a seat within the negotiations between the regulator and regulated (pp.5758). They are reluctant to define exactly who the PIGs are but envisage the likes of
environmental, social and labour interests. Perhaps the most significant public
interests, in industries such as the utilities, are consumer and environmental interest
groups.
While Ayres and Braithwaite call for greater participation in regulation they
reject a highly prescriptive top down approach. They stress flexibility and a mix of
regulatory strategies which would depend on the nature of the regulated sector and its
history. Delegation of regulatory responsibilities is also stressed but if they fail they
need to be backed up by stronger top down regulatory approaches. ‘Enforced self
regulation’ and ‘co-regulation are two means suggested by Ayres and Braithwaite
both to achieve flexibility and to enable greater participation.
A system of self regulation is, as its name implies, about firms or other
regulated entities, specifying and enforcing their own regulatory standards. Enforced
self regulation is enforced by the state in the sense that the firm is required to write
the rules and the rules are then publicly ratified and enforced. Enforced self regulation
is therefore ‘about negotiation occurring between the state and individual firms to
establish regulations that are particularised to each firm’ (p.101). While flexibility and
effectiveness are features stressed, the participatory dimension is not ignored. Public
interest groups can be involved in the process of ratification and checking the
8
implementation. These processes would be the responsibility of either the government
or regulatory agency but PIGs should have the necessary information made available
to them for ratification and implementation.
The essence of ‘coregulation’ can be understood from the prefix ‘co’ which is
used to signify ‘jointly’, ‘together’ or ‘with’. There are therefore at least two parties
involved in the formation and implementation of regulation. The two parties may be
the regulated party and the regulatory agency, it may involve a group of regulated
parties such as industry associations and the regulator, or it may involve the regulated
party and other interested and affected interests such as public interests. The term
‘stakeholder’ is often used to define members of the group who are either affected in
some way either directly by regulation or indirectly, by being affected by the conduct
of the regulated. Ayres and Braithwaite, however, do distinguish it from the idea of
enforced self regulation noted above in that the thrust is to establish industry wide
rather than single industry rules (p.102). Industry associations rather than single firms
write the rules which are then ratified and checked for implementation by the
government and state agencies with the involvement of PIGs. Participation might also
be enhanced in co-regulation with the involvement of PIGs in the writing of the rules
by the industry association.
A broader definition of coregulation, however, reflects the way the term is
often used in practice. For the UK telecommunications regulator, OFTEL, for
example, coregulation involves the participation of OFTEL in stakeholder groups
(OFTEL, 2001). These can be when OFTEL backs stakeholder led initiatives through
statutory back up powers, and when OFTEL participates in stakeholder groups in the
development and the implementation of regulation. The European Commission in
relation to the White Paper on Governance notes that ‘coregulation is an approach in
which a mixture of instruments is brought to bear on a specific problem, typically
involving both primary legislation and self regulation, or if not self regulation, at least
some form of direct participation of bodies representing civil society in the rule
making process’ (Commission, 2001b, p.6).
These definitions indicate that there is a breadth and a certain fuzziness in the
idea of coregulation. Two aspects can be discerned which have different objectives
and which are of especial importance for citizenship and regulation. The first aspect
stresses efficiency and effectiveness. In this aspect flexibility and having a mixture of
regulatory tools available is necessary and this can involve some kind of combination
9
of self regulation and statutory regulation. The aim is to achieve some of the
objectives of ‘better regulation’ noted by in the White Paper, such as proportionality,
proximity and timeliness. The second aspect focuses on inclusiveness and
participation and involves the participation of various stakeholders in the various
stages of regulation. With the involvement of public interests as stakeholders this is
closely connected to participatory notions of citizenship and democratic legitimacy.
These two aspects are not necessarily incompatible but they do appear to be
rather odd bedfellows and conflicts may well arise. Both aspects are stressed in the
introduction to the White Paper and the working paper on regulation but it is open to
question whether both objectives can simultaneously be achieved.
5.
Does the White Paper offer a participatory system of regulation in the
EU?
There is therefore one aspect of coregulation which seems to offer the potential for the
development of a participatory system of regulation. One way of assessing this is to
consider the role of consumer and environmental interests in the EU system of
regulation and the proposals for change contained in the White Paper. What do they
think of the proposals, in particular the participatory aspects of coregulation? Do they
have any proposals for improvement?
Amongst EU level environmental and consumer groups there is a general
scepticism towards the ideas of coregulation presented by the Commission in the
White Paper. One of the main concerns is that the force of law will be diminished and
with it the environment and consumer interest. For example, the European
Environmental Bureau (EEB), which has represented eight environmental groups on
governance issues, notes that voluntary agreements on regulation may lack the
strength and breadth of applicability compared to regulations based on statutory law
(Interview EEB) and the pressure on governments to create strong regulatory bodies
might also be reduced (EEB, 2001). Enforcement is also a concern of the European
consumers group BEUC who argue that the level of commitment to coregulatory
agreements may vary significantly and that the diminution of the statutory dimension
may encourage free riders who are not party to agreements (BEUC, 2002). Similar
concerns about the dilution of the role of law have been expressed by the European
group of consumer cooperatives (Interview: Euro Coop).
10
Public interests also doubt the potential of participation in coregulatory bodies.
A problem is the high level of resources required for commited participation in such
bodies. BEUC, for example, notes that the ‘level of resources required on both sides
would in itself prevent coregulation from becoming a general or common method of
rule making in the Single Market’ (BEUC, 2002, p.9). Environmental groups go
further and emphasise the massive asymmetry in resources between industry and
themselves (Interviews: EEB, Greenpeace). Not only is industry well established in
standards organisations but they are able to produce much more substantially
developed proposals. Environmental interests could therefore be very much weaker
partners in these bodies. While environmental groups would like such bodies to be
more transparent they are concerned about being coopted in to the process and
possibly losing public support in the process. This point is echoed by the European
Citizens Advisory Service (ECAS) which notes that a process of regulation which is
drawn up by stakeholders could reinforce the general impression that the process is
dominated by a closed elite group (Interview: ECAS). If the aim is connecting the EU,
its policies and regulation with citizens then there is a problem of membership of
coregulatory bodies and who writes the rules. In addition questions such as who
selects the members and how easily members are replaced in response to citizens’
concerns are raised by public interests.
Another reservation is that, in the multi-national environment and variable
political and legal contexts of the EU, there will be less certainty about the
implementation of coregulatory agreements. BEUC, for example, note that
coregulation agreements will not bind all market players and the legal status of such
agreements will vary from country to country with corresponding variations in the
implementation (BEUC, 2002, p.9). Cross-national political differences are also noted
by the EEB, in the Netherlands for example, a country with relatively high
environmental standards and awareness, industry knows that if voluntary agreements
and related processes such as benchmarking fail, political pressure will soon rise for
strong legislation (Interview: EEB). The same cannot be said about some other
European countries, nor importantly, about the EU as a whole, where there is little
political consciousness and focus on the EU.
A further reservation concerns the argument made by the Commission that
coregulation agreements will only apply when the decision to be made is relatively
technical and uncontroversial (Commission, 2001b). Some decisions may indeed be
11
uncontroversial but as ECAS point out the same decision which is uncontroversial in
one area may turn out to be highly controversial in another (ECAS, 2002). How are
the public to know when decisions become controversial? Are they to depend on the
vigilance of under resourced public interest groups? An example in the European
single market is the process of agreeing cross-border tariffs in the newly emerging
European electricity market. A process of negotiation involving national regulators,
industry, governments and the Commission, named the Florence process, has been
underway since the late 1990s. This can be seen as a variant of coregulation as it
involves negotiation of market rules by several parties. It can also be seen as a
technical process of tariff charging with little impact, for example, on the
environment. However, it may promote a significant increase in long distance
transmission of electricity which might adversely affect the environment. Although
the Commission claims that the process involves ‘stakeholders’ (Commission, 2000),
there is little involvement of environmental or consumer interests. The EU
environmental interest group, Climate Action Network-Europe, for example, although
interested in the Florence process, has not got the resources for full participation and
analysis of the implications (Interview: CAN-Europe). Cross-border electricity
tariffication is just one example of an emphasis on ad hoc and flexible rule making
processes instigated very often by industry which will almost invariably leave public
interest several steps behind. With fewer resources they will be unable both to
participate fully nor to understand fully the implications.
This raises the question of what extent coregulation and its variants are really
about promoting participation of public interests, or whether the emphasis is mainly
on flexibility and effectiveness. The principles of and the drive for ‘better regulation’
and the idea of coregulation appear to concentrate more on efficiency than
participation. For example, the Commission’s report on regulation is introduced by
the conclusions of the Lisbon European Council of 2000 which stressed European
competitiveness and new approaches to regulation which are effective and flexible.
While the Commission added that it emphasised the involvement of civil society in
regulation the impression given is that this is subordinate to efficiency. The seven
principles of better regulation noted by the Commission which are ‘proportionality’,
‘proximity’, ‘coherence’, ‘legal certainty’, ‘timeliness’, ‘high standards and
‘enforceability’ note that ‘stakeholders’ should have a role but do not focus
specifically on participation (Commission, 2001b). A specific reference to
12
coregulation starts with the advantages in terms of ‘flexibility, proximity, and
(possibly) timeliness’ (p.13) and only later mentions participation, giving the
impression that it is an optional extra rather than an essential element. These
approaches seem to match more closely to the objectives of industry which stress
flexibility, efficiency and reducing (the perceived) burden of regulation (Unice, 2002;
Amcham, 2002). While industry pays lip service to participation it is questionable
how wide they want it. UNICE for example note that ‘stakeholder organisations …
should be representative at the European level, mandated to act on behalf of their
constituents, and possess the necessary means to fully participate in the process’
(Unice, 2002, p.5). The need for ‘representativity’ can easily exclude established
public interests as well as emerging ones and add to an impression that stakeholder
dialogue will be a closed process.
The empowerment of public interests
Whatever the stress the Commission gives to efficiency versus participation one of the
main obstacles to greater participation is the relative weakness and lack of resources
of public interests. For example, on Commission committees environmental interests
are often lone and weaker voices who have not been able to prepare adequately in
comparison to industry interests. The Environment directorate notes that in response
to policy proposals it can get swift and detailed responses from industry in ways
which environmental interests cannot match (Interview: DG Environment).
Environmental and consumer interests also complain that some DGs such as
agriculture and enterprise are rather closed. (Interviews: EEB, Euro Coop). The
constant refrain therefore, whether it relates to coregulation or representation to the
Commission is that the voice of public interests are weak and need empowering in
some way. This is unsurprising and in relation to a participatory system of regulation
Ayres and Braithwaite (1992, p.18) note the need to empower weaker interests for a
more effective system. In the context of the EU therefore, what possibilities are there
for the empowerment of public interests?
One possibility is to exploit an existing institution of the EU, namely the
Economic and Social Committee (ESC). The ESC is an advisory body which is a
forum for dialogue and represents various economic and social interest groups in the
EU policy process. Its original role was the facilitation of dialogue between the so
13
called ‘social partners’ i.e. business and trade unions but has expanded in recent years
to encompass a wide range of social interests - organised civil society. It claims to be
the ‘the representative of organised civil society in the EU political and institutional
system’ (ESC, 2001, p.2) and to offer ‘a bridge between Europe and its citizens’
(ESC, 2002). More specifically the ESC could operate as a focal point for the
development of coregulation agreements which could strengthen public interests by
formalising their role and improving information provision.
The support amongst public interests for a role for the ESC in this way is,
however, very limited. While the benefits it offers in terms of putting forward
opinions, information provision and networking are noted, consumer interests do not
see it as an effective solution for the effective participation of civil society (Interview:
Euro Coop; BEUC, 2002). BEUC, for example, is ‘strongly against’ the use of the
ESC as a means of connecting civil society to the EU because of the diversity of
interests involved (pp.4-5). Environmental interest also oppose the use of the ESC to
represent civil society seeing it primarily as a forum for the social partners to engage
in dialogue and environmental interests would rather engage directly with the decision
making institutions (EEB, 2002). Similar opinions are voiced by ECAS on the
potential of the ESC to offer a bridge between the EU and the citizen. ECAS argues
that, rather than having an advisory institution acting as a focus for civil society the
decision making institutions should be more pro active in reaching out not only to
civil society organisations but also to citizens (Interview: ECAS).
The strongest and most consistent message that comes across from consumer
and environmental interests appears fairly straightforward: better consultation,
transparency and information provision by the decision making institutions
throughout the policy cycle is the key to inclusiveness. Greenpeace, for example, note
that although there are public hearings and formal consultation processes these are not
sustained throughout the policy process (Interview: Greenpeace). Some interests, for
example, local or regional governmental bodies, who are sometimes supportive of
stronger environmental policies in the formal consultation processes, are not active,
nor called on at other crucial times. In the crucial stage of drafting of proposals, for
example, consultation processes are informal and dominated by the stronger lobbyists.
Both consumer and environmental interests note that some DGs, tend to favour
industry, particularly at decisive times in the policy process (BEUC, 2002 p.5;
Interviews: Euro Coop, Greenpeace). The Commission does of course dispute a
14
systemic bias nevertheless they do say they receive faster and more detailed responses
from industry at crucial stages. Also ‘better and faster regulation’ is routinely stressed
by the Commission but as ECAS note there can be good reasons why the legislative
process should not be too quick, particularly to enable all interests to be involved
(ECAS, 2002, p.6). Another complaint of these interests in the closed nature of the
Council. The EEB call for the end of secrecy in the Council with publicisation of
debates or actions (EEB, 2002) and BEUC bemoans the ‘closed shop’ culture of the
Council at all its levels and the non-disclosure of working documents and agendas
(BEUC, 2002, p.4).
Inclusiveness therefore could be improved by a comprehensive, sustained and
commited thrust to develop and implement high standards of consultation in terms of
timing, with whom and how. This would involve the identification of the affected
interests at the outset of the policy or regulatory proposal and a commitment to
sustained participation of the interests. The identification of affected interests is not
easy, interests themselves are not always sure of the significance of a policy proposal.
One technique to aid the process of would be to extend the use of Regulatory Impact
Assessments which has been called for by consumer organisations. The UK’s
National Consumer Council (NCC), for example, argue that the costs and effects,
including spillovers, of all policies should be examined thoroughly (NCC, 2002).
They suggest a two stage process with an early general review and a more detailed
full assessment when the policy is more developed. Clearly this could contribute to
identifying the affected interests early in the policy process and making consumers
better informed. In mid 2002 the Commission responded by proposing initiatives on
better consultation and extending its impact assessment to all social, economic and
environmental areas (Commission, 2002). It is too early to say whether these
initiatives will represent a small and perhaps reluctant incremental step or whether
they will show real commitment to participation.
15
6.
Conclusion
The development of markets, whether the emerging single European market or in
newly liberalised sectors at national level, can create pressures for broader
manifestations of citizenship. Narrower forms may be limited to ‘citizenship as
consumer’ or ‘market citizenship’ in which economic actors exercise market freedoms
and the right of exit. Economic action, however, does not take place in a vacuum; it is
very closely linked to social and political pressures, norms and institutions. Under
functional pressures a narrow concept of market citizenship can therefore be extended
to a broader, more inclusive and participatory form of citizenship.
The legitimacy problems of the EU and the pressures which led to the White
Paper on Governance can be seen, in part, as a manifestation of this process. The
creation of the single market and its regulation can lead to pressures for further rights
of citizenship and participation. The White Paper was introduced with an emphasis on
inclusiveness and participation and the idea of coregulation was considered as a
possibility of a more participatory form of regulation. The response of key public
interest groups to coregulation, such as the environment and consumers, who could be
key players in participatory coregulation systems has, however, generally been
negative. Their concern is about the strength of industry and the possibility of a
diminished role of law in regulation. Rather than focusing on new forms of regulation
their main concern is for better systems of consultation within the established system
of regulation and policy making in the EU. Better consultation in the EU policy
process focused on the Commission appears to offer a greater prospect of the closer
incorporation of public interests. Proposals for the improvement include earlier
identification of the affected interests and ensuring consultation is followed through
fully to avoid the appearance of symbolism.
However, it can be asked whether NGOs are being too conservative and are
too socialised into the established system to consider serious alternatives. Is the
concern about the possible diminution of the role of law in coregulation, for example,
exaggerated? Ayres and Braithwaite (1992), for example, note that, by public
ratification of voluntary agreements and enforcement, law would still play a key role
in systems of coregulation or enforced self regulation. It is also questionable the
extent to which EU level NGOs want to be involved in a system of regulation which
involves more participation by citizens. The majority of EU NGOs are federations of
16
national associations and their main focus of action is at national level with the EU
federation used mainly for representation in Brussels. Although NGOs have a high
standing in the public and could be champions of the citizen in Europe and offer a
bridge between the citizen, civil society and EU institutions, NGOs in practice are
unable to fulfil that promise (Warleigh, 2000). While there are some nascent trends,
Greenpeace, for example, are beginning to make some attempt to develop EU wide
campaigns and raise the consciousness of their members towards the EU (Interview:
Greenpeace), EU level NGOs make few conscious efforts to reach out to the citizen.
There are nevertheless substantial problems with the Commission’s proposals
and it is argued that the proposals for co-regulation and self regulation offer little
prospect of enhancing participation and citizenship in the EU. In particular, the
participatory dimension of coregulation is not fleshed out, nor is it made clear how
weaker public interests could participate in such systems in an effective way. I argue
that it is important to distinguish between the two potentially contradictory aspects of
coregulation: efficiency and effectiveness on the one hand, and participation and
inclusiveness on the other. It is the former, which concentrates on industry’s primary
concern - flexibility and the reduction of regulatory burdens - which is given primacy
in the White Paper and related initiatives. What seems to be clear is that industry
would be an integral part of any coregulatory arrangements but the involvement of
public interest groups needs to be established as a principle and in practice it will be
much less certain. This is reflected in the response to the proposals on self and
coregulation of various EU public interest NGOs, such as environmental and
consumer groups. Without a clear definition of both aspects of the concepts it
becomes a rather bland ‘third way’ like concept which appears to be all things to all
men. Without directly addressing how coregulation arrangements in the EU will be
more inclusive and participatory there is the risk that the participatory aspect of
coregulation will appear somewhat symbolic. It can easily be seen that coregulation is
simply a convenient and easy way of integrating two very different aspirations, each
of which should be separately addressed. This doesn’t mean the concept should be
rejected but it does raise the question about whether it is the most appropriate way of
promoting an enhanced ‘citizenship-as-participation’ vis-à-vis regulation and markets
in the EU. These reflections on the proposals on EU regulation reflect other research
on the White Paper: despite its intentions of inclusiveness and participation, the broad
thrust of the White Paper is towards a problem solving and technocratic approach
17
rather than the fostering of a democratic and participatory democracy (Steinberg,
2001; Eriksen, 2001).
It can also be asked whether forms of participatory regulation are compatible
with the EU’s institutions and the way the EU governs the market. As Ayres and
Braithwaite (1992, pp.97-100) note, an appropriate institutional environment is
necessary for the development of an effective form of tripartism in regulation. The
EU’s system of governance of the market does not have obvious potential for the
development of effective participatory coregulation. Negative integration has been
predominant in the EU (Scharpf, 1999), and ‘framework regulation’ and the ‘open
method of coordination’ are policy/regulatory approaches stressed at the EU level.
While cross-national policy learning and cross-national regulatory coordination (most
often instigated by industry, member states or national regulatory authorities) may be
possible and indeed promoted, these approaches are not conducive for EU level
harmonisation. Participatory coregulation at EU level requires the pro-active
incorporation of public interests into a single and clear EU level process but this
seems highly unlikely in a system of market governance which emphasises
decentralisation, cross-national variation of regulatory administration and bottom up
instigation of cross-national regulatory coordination. All of this is reflected in the
development of consumer policy which has been very uneven and European
consumer organisations have been unable to divert the primary thrust of the single
market programme from economic integration to a more consumer friendly
orientation (Young, 1998).
Enduring national differences also militate against effective EU participatory
regulation. If these differences continue, the possibilities for comprehensive and farreaching reform at the EU level seem slim. In the utilities despite the increasing
impact of the EU, implementation is undertaken at the national level. The EU sets the
broad rules, many of which affect citizens and the environment but they are directives
which are implemented at national level and in the utilities there is broad scope for
interpretation. This means the national level is by far the main focus of attention for
public interest groups. Conclusions from cross-national comparison indicate that
despite evidence of convergence to the regulatory state there is no one model of the
citizenship and regulation developing at the national level. Across Europe, there are
institutional differences in the forms of consumer/citizen involvement, transparency
and accountability in utility regulation, particularly, for example, between Britain and
18
Germany (Lodge, 2000). Without cross-national convergence towards effective
systems of participatory regulation it is difficult to see such systems becoming
established at the EU level.
References
Ayres I. and Braithwaite J. (1992), Responsive Regulation. Transcending the
Deregulation Debate, Oxford: Oxford University Press.
Amcham (2002), The EU committee of the American Chamber of Commerce in
Belgium, ‘Contributing to global governance: The EU committee position paper on
the Commission’s White Paper on European Governance’, Brussels, 25/3/02.
BEUC (2002), The European Consumers Association, ‘Response to the White Paper
on Governance’, Brussels, 28/3/02.
Commission (2000) ‘Conclusions. Sixth meeting of the European Electricity Forum,
Florence, 9-10/11/2000’, Brussels, DG Energy and Transport.
Commission (2001a) ‘European Governance. A White Paper’ Brussels, 25/7/01.
Commission (2001b) ‘White Paper on European Governance. Report of the Working
Group “Better regulation”’, Brussels, May 2001.
Commission (2001c) ‘White Paper on European Governance. Report of the Working
Group “Consultation and participation in Civil Society”’, Brussels, June 2001.
Commission (2002), ‘Better consultation and accountability: a modernisation plan for
clearer and better European legislation’, Brussels, 5/6/02.
Downes, Tony (2001), ‘Market Citizenship: Functionalism and Fig-leaves’, in Richard
Bellamy and Alex Warleigh, (eds) (2001) Citizenship and Governance in the European
Union London: Continuum, pp.93-106.
ECAS (2002), European Citizens Action Service, ‘Issues in Better EU Regulation. An
ECAS response to the Commission’s White Paper on European Governance’,
Brussels, 29/3/02.
EEB (2001), European Environmental Bureau, ‘A First Response from the European
Environmental Bureau to the White Paper on Governance’, Brussels, 3/12/01.
EEB (2002), European Environmental Bureau and the ‘G8’ group of European
environmental associations, ‘Initial contribution to the convention on the future of
Europe’, Brussels, 18/4/02.
Eriksen, Erik O. (2001), ‘Governance or Democracy? The White Paper on European
Governance’ NYU School of Law, Jean Monnet Working Papers No.6/01,
19
Symposium: Mountain or Molehill? A Critical Appraisal of the Commission White
Paper on Governance, http://www.jeanmonnetprogram.org/papers/papers01.html.
Ernst, John (1994), Whose Utility? The social impact of public utility privatisation
and regulation in Britain, Buckingham: Open University Press.
ESC (2001), Economic and Social Committee, ‘Opinion of the Economic and Social
Committee on Organised civil society and European governance: the Committee’s
contribution to the drafting of the White Paper’, Brussels, 25/4/01.
ESC (2002), Economic and Social Committee ‘Institutions of the European Union’
The European Economic and Social Committee’,
http://www.europa.eu.int/institutions/esc/index_en.htm (August 2002).
Everson, Michelle (1995), ‘The Legacy of the Market Citizen’ in Jo Shaw and G.
More (eds), New Legal Dynamics of the European Union, Oxford: Clarendon Press.
Graham, Cosmo (2000), Regulating Public Utilities. A constitutional approach,
Oxford: Hart.
Graham, Cosmo (1998), ‘Is there a crisis in regulatory accountability’ in Baldwin,
Robert; Scott, Colin and Hood, Christopher, A Reader on Regulation, Oxford: Oxford
University Press.
Haque, M. Shamsul (1999), ‘Relationship between citizenship and public
administration’, International Review of Administrative Sciences, 65:3, pp.309-326.
Interview EEB (2002), European Environmental Bureau, Brussels, 22/03/02.
Interview Greenpeace (2002), Greenpeace International - European Unit, Brussels,
10/05/02.
Interview DG Environment (2002), European Commission, DG Environment,
Brussels, 25/03/02.
Interview CAN-Europe (2002), Climate Action Network Europe, Brussels, 25/03/02.
Interview Euro Coop (2002), European Community of Consumer Cooperatives,
Brussels, 19/03/02.
Interview ECAS (2002), European Citizens Action Service, Brussels, 25/03/02.
Leibfried and Pierson (2000) ‘EU social policy’, in Wallace, Helen and William
Wallace (2000) (eds) (4th edition) Policy-Making in the European Union, Oxford
University Press.
Lodge, M. (2000), ‘Regulatory Accountability: Towards a Single-Citizen Consumer
Model?’, Paper for the Political Studies Association UK, 50th Annual Conference, 1013 April 2000, London.
20
Majone, Giandomenico (1994), ‘The rise of the regulatory state in Europe’, West
European Politics, 17, pp.77-101.
Majone, Giandomenico (ed), (1996), Regulating Europe, London: Routledge.
Majone, Giandomenico (1997), ‘The new European agencies: regulation by
information’, Journal of European Public Policy, 4:2, pp.262-275.
NCC (2002), The National Consumer Council, ‘European governance: A White
Paper’, London, March 2002.
OFTEL (2001) Office of Telecommunications, ‘The benefits of self and co-regulation
to consumers and industry’, London, July 2001.
Prior, David; Stewart, John and Walsh, Kieron, (1995), Citizenship: Rights,
Community and Participation, London: Pitman.
Sauter, Wolf (1998), ‘Universal Service Obligations and the Emergence of Citizens’
Rights in European Telecommunications Liberalisation’, in Mark Freedland and
Silvana Sciarra, Public Services and Citizenship in European Law, Oxford: Clarendon
Press, pp.117-143.
Scharpf, F. W. (1999), Governing in Europe. Effective and Democratic? Oxford
University Press.
Schwarzmantel, J. (2000), ‘What is the New Republic?’ Paper for the Political Studies
Association UK, 50th Annual Conference, 10-13 April 2000, London.
Steinberg Philipp (2001), ‘Agencies, Co-Regulation and Comitology - and
what about politics ? a critical appraisal of the Commission's White Paper on
Governance’, NYU School of Law, Jean Monnet Working Papers No.6/01,
Symposium: Mountain or Molehill? A Critical Appraisal of the Commission White
Paper on Governance, http://www.jeanmonnetprogram.org/papers/papers01.html.
Thatcher, Mark (1998), ‘Regulating the Regulators: The Regulatory Regime for the
British Privatised Utilities’, Parliamentary Affairs, 51:2, pp.209-222.
UNICE (2002), Union of Industrial and Employers Confederations of Europe,
‘Commission White Paper on Governance; Unice Position’, Brussels, 28/2/02.
Warleigh, Alex (2000), ‘The hustle: citizenship practice, NGOs and “policy
coalitions” in the European Union - the cases of Auto Oil, drinking water and unit
pricing’, Journal of European Public Policy, 7:2, pp.229-243.
Young, Alasdair, R. (1998), ‘Consumption without representation? Consumers in the
single market’, in Wallace, H and Young, A R, Participation and Policy-making in
the European Union, Oxford: Clarendon Press, pp.206-234.
21