From government towards governance? Exploring the role of soft policy instruments.

Author:Wurzel, Rudiger K.W.

1 Introduction

Germany has often been portrayed as a high regulatory state (e.g. Heritier, Knill and Mingers 1996) which has traditionally relied heavily on 'command-and-control' regulations that stipulate the best available technology (BAT--Stand der Technik) (e.g. Weale 1992b; Wurzel 2002). Knill (2001: 135-163) has argued that the German environmental policy system is characterised by a "static core" that gives preference to interventionist approaches and regulatory rules which "are highly specified and leave comparatively little flexibility and discretion for the administration". At first sight Germany therefore seems an unlikely country for the wide use of voluntary agreements and EMAS which are widely considered as relatively flexible "soft" policy instruments.

However, cooperation between governmental and societal actors has been an early goal of German modern-day environmental policy. The relatively ambitious 1971 Environmental Programme stipulated already the cooperation principle (Kooperationsprinzip) together with the polluter pays principle (Verursacherprinzip) and the precautionary principle (Vorsorgeprinzip) (e.g. Hartkopf and Bohne 1983; Muller 1986). According to Hartkopf and Bohne (1983: 114) the cooperation principle is particularly pertinent for the environmental policy sector "[b]ecause in hardly any other policy sector are state and societal actors as much dependent on each other as in environmental policy". The cooperation principle was meant to encourage cooperation between governmental and societal actors for the following two main reasons. First, to make easier the implementation of consensually adopted environmental policy measures; second, to allow governmental actors to utilise more easily societal knowledge including the know-how of corporate actors on issues relevant for environmental policy measures (Kloepfer 2004: 198-199). However, in practice corporate actors were often highly reluctant to cooperate voluntarily with governmental actors on the adoption of ambitious environmental policy measures.

Most German voluntary agreements were therefore adopted in "the shadow of the law" (Scharpf 1994; see also Lees 2005: 222; Wurzel et al. 2003) or in "the shadow of hierarchy" (e.g. Heritier and Lehmkuhl 2008; Toller 2008a). More often than not they constituted an attempt by corporate actors to pre-empt government legislation by offering a voluntary agreement instead. Environmental voluntary agreements therefore resembled a form of "regulated self-regulation" (Paterson 1989: 284) that fitted well the wider social market economy (soziale Marktwirtschaft) doctrine which long has been a central action guiding principle for the Federal Republic of Germany (FRG). It also suited Germany's moderately active policy style which usually relies heavily on consensus and consultation (Dyson 1982, 1992; Weale 1992). Importantly the traditional German policy style exhibited some corporatist features because most post Second World War German governments have consulted closely both employer groups and unions. However, it is also strongly informed by ordo-liberal ideas according to which the state determines merely the framework conditions (Ordnungspolitik) within which market forces reign. Emphasizing both ordo-liberal and state interventionist ideas, Germany's managed capitalist system developed into a social market economy (Dyson 1982, 1992; Dyson and Goetz 2003; Dyson and Padgett 2005). By contrast, attempts to develop the social market economy doctrine further into a "social and ecological market economy" (soziale und okologische Marktwirtschaft) were less successful.

The social market economy doctrine has been open for both the adoption of traditional command-and-control regulation (which reflected state intervention) and voluntary agreements (which emphasize self-regulation although they are usually adopted in the "shadow of the law"). Importantly, out of those political parties which have formed (coalition) governments in Germany, it has been the Social Democratic Party (Sozialdemokratische Partei Deutschlands--SPD) and the Green Party (Bundnis 90/Die Grunen Alliance 90/The Greens) which have emphasized more strongly the need for interventionist environmental policy measures while the Christian Democratic Party (Christlich Demokratische Union--CDU), Christian Social Union (Christlich Soziale Union--CSU) and in particular the Liberal Party (Freiheitliche Partei Deutschlands--FDP) have overall stressed more often the importance of voluntary agreements (for more details see the contribution by Toller in this issue).

Our article uses environmental policy instruments as empirical touchstones for assessing the alleged shift from traditional government, which is said to consist primarily of hierarchical top-down " command-and-control" regulations, towards new modes of governance that rely more strongly on societal self-organisation. This article assesses whether the use of "soft" policy instruments (such as voluntary agreements and eco-management and audit schemes) can be used as a measure for a deeper underlying change from (environmental) government towards (environmental) governance. It does so by analysing whether "soft" tools are increasingly replacing "hard" policy instruments (i.e. traditional regulation) in German environmental policy. The empirical findings in this article are based on interviews which we carried out for a larger research project between 2001-2011 (1). It proceeds as follows. The next section puts forward a threefold differentiation of environmental policy instruments. Ann assessment of the role which voluntary agreements play in German and EU environmental policy is presented next. The following section analyses the uptake of EMAS and ISO 14001. The conclusion summarises the main findings and argues that 'soft' policy instruments (such as voluntary agreements and EMAS) have not replaced 'hard' policy instruments (i.e. traditional regulation). Instead they have supplemented traditional regulation which itself has evolved (i.e. become "smarter") by, for example, granting lighter touch regulation requirements for EMAS certified companies.

Studying Policy Instruments

Policy instruments have been studied since at least the Enlightenment era (Hood 2007: 128). German Polizeywissenschaft already focused on the effectiveness of different policy tools and their interplay (e.g. Hood 2007: 1; Maier 1980). Much of the contemporary literature has also strongly focused on the effectiveness and efficiency of particular policy instruments although there are notable exceptions (see also Toller's contribution in this issue). For a long time the selection of policy instruments was portrayed largely as a politically neutral technical choice although there are some important exceptions (e.g. Hood 1983; Majone 1976). The only important criteria for the selection of policy instruments seemed to be their effectiveness and efficiency as regards the implementation of government policies. Lawyers often stressed the need for effectiveness and thus usually showed a high affinity with regulations while economists tended to emphasize the importance of efficiency and thus usually favoured market-based instruments.

However, the narrow focus on effectiveness and efficiency as the exclusive selection criteria for policy instrument choices has been challenged more recently (e.g. Bahr 2010; Bocher and Toller, 2007; Hood 2007; Jordan, Wurzel and Zito 2005, 2007). Lascoumes and le Gales (2007: 11) have argued that "[p]ublic policy instrumentation reveals a (fairly explicit) theorisation of the relationship between the governing and the governed. In this sense, it can be argued that every public policy instrument constitutes a condensed and finalized form of knowledge about social control and ways of exercising it". Different German environmental policy actors have pushed for the adoption of certain types of policy instruments; this was done to achieve political objectives rather than merely technical environmental goals.

The fact that the main German political parties have somewhat different policy instrument preferences has already been flagged up above. Importantly, different government departments have also shown relatively distinct preferences for certain environmental policy instrument types. The ministries responsible for environmental issues--the Interior Ministry (from 1969-86) and the Environment Ministry (since 1986)--initially showed a strong preference for traditional environmental regulation while the Economics Ministry often favoured voluntary agreements over state interventionist regulation. On environmental policy issues Interior/Environmental Ministry officials and Economics Ministry officials have often perceived themselves as natural enemies (naturliche Feinde) (see Wurzel 2002, 2008b) which frequently pushed for the adoption of different policy instruments. The Interior/Environment Ministries has generally favoured traditional regulation over voluntary agreements while the Economics Ministry has often shown a preference for voluntary agreements over traditional regulation.

Party political and departmental preferences are more complicated in respect to market-based instruments. Eco-taxes have been always been supported by the Green Party and, although to a lesser degree, the SPD. Some prominent CDU/CSU politicians and FDP politicians have also supported the use of eco-taxes in German and/or on EU environmental policy. For example, Klaus Topfer (CDU), who headed the Environment Ministry from 1987-94, strongly pushed for market-based instruments including an ecological tax reform which, however, was resisted by Chancellor Helmut Kohl (CDU) who preferred EU-wide eco-taxes instead. Emissions trading in general and the EU's emission trading scheme (EU ETS) in particular was initially strongly opposed by all German political parties. The Green Party was first to perform a U-turn by...

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