Regulation and infrastructure management: German regulatory regimes and the Eu framework.
| Verfasser | Eberlein, Burkard |
Abstract (1)
In the aftermath of large-scale privatization and liberalization of infrastructure management in Europe, new regulatory institutions and ways of managing network industries such as telecommunications, electricity, and railways have been established. This paper challenges the prominent assumption that, following EU-driven liberalization, regulatory powers simply move from the national to the European level. The paper looks at the German case of transition to a 'regulatory state' in infrastructure management. Assessing the differential impact of Europeanization, it analyses the new institutional set-up of German regulation, and the tasks and problems faced by regulators across three sectors. The German case study indicates that a variety of sectoral (and national) regulatory regimes persist in the context of an EU regulatory framework in statu nascendi. A closer look at the institutional architecture of the EU framework reveals that European and national regulation interact in a complex and dynamic multi-level set-up, reflecting the specific characteristics of the European integration dynamic and of EU multi-level governance. The paper concludes by suggesting some tentative hypotheses on the shape of the European regulatory regime for infrastructure management.
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Introduction: Europe in the Age of Privatization and Liberalization
Looking back on the recent transformations of the political economy of advanced industrial countries, the privatization of public enterprises and the liberalization of markets rank among the most important changes. The wave of privatization and liberalization has seized almost every European country, and it has cut deep into new areas hitherto sheltered from competition (Vickers and Wright, 1989; Wright, 1994; Lane, 1997). One of the most remarkable examples is the field of infrastructures and utilities, which, traditionally, were state-owned, state-run or at least exempted from market competition.
Infrastructures and utilities belong to those sectors for which the state traditionally took particular responsibility (staatsnahe Sektoren, see Mayntz and Scharpf, 1995). In a historical perspective, this responsibility has taken one of two forms: Either the state has acted as a direct provider or 'producer' of infrastructure services (e.g. public ownership), or public authorities have supervised and controlled--that is, regulated--the private provision of services. The former solution, which--according to Seidman and Gilmour (1986)--can be labeled the "positive state" (Leistungsstaat), has been the dominant form of infrastructure management in Europe. The latter solution, i.e. the "regulatory state", is typically found in the US (see Grande, 1993 and 1997; Majone, 1994 and 1997; Schuppert, 1997).
The privatization and liberalization movement in Europe has changed this traditional picture. The entire infrastructure sector has undergone rapid and radical changes, leading to the decline of the positive state. The general reasons for market-oriented reforms in infrastructure management are, by now, well known. The most important have been: the economic and fiscal crisis, which forced governments to deny financial assistance to ailing and inefficient state enterprises; the hegemony of neo-liberal policy frames, which favor market-based solutions; dynamic technological developments, which made market-reforms feasible; and, last but not least, the intensification of international competition, which exercised pressure on state monopolies (see Henig, Hemnett and Feigenbaum, 1988; Vickers and Wright, 1989; Hancher and Moran, 1989; Clarke and Pitelis, 1993; Wright, 1994).
In studies on European integration and European multi-level governance, the process of privatization and liberalization has been regarded as being affected by the recent 'Europeanization' of policies in two respects. On the one hand, the liberalization of markets has been interpreted as a direct result of the dynamics of European market integration, which called for an opening of nationally insulated markets. This development has been facilitated by the autonomous power of supranational actors such as the European Commission and the European Court of Justice (Schmidt, 1998). However, Europe is said to have played a role in this case in still another respect. Since the process of liberalization and privatization has been accompanied by the establishment of public regulatory powers, it has been argued that the liberalization of public utility markets would favor a transfer of competencies from the national to the European level (Majone, 1994 and 1996). Our argument in this paper is that both assumptions have to be qualified.
It is true that European actors and the process of European market integration have played a role in this sector. However, the effects of Europeanization on domestic infrastructure management were more important in countries known as liberalization laggards, such as France and Italy (in regard to telecommunications see Schneider, 2000). Here, 'Europe' often made a difference, in particular by empowering domestic reform coalitions. In other countries, EU policies did little more than amplify, or simply accompany, domestic reform processes. Also, the effects of Europeanization substantially differed across policy sectors. Thus, Europeanization should not be conceived as a mechanical lever for achieving member-state convergence (for a conceptual map of Europeanization see Cowles, Caporaso and Risse, 2000; Heritier et al., 2000).
In the case of Germany, market-oriented reforms used to be, until recently, rather slow and modest (Grande, 1986; Konig, 1988; Ambrosius, 1994; Esser, 1994; Konig and Benz, 1997). Compared to the radical reforms in Britain, German reforms looked "symbolic" or "halfhearted" (Esser, 1994; Grande, 1989), and they appeared to be no serious threat to the established pattern of the German social market economy (soziale Marktwirtschaft). At the end of the 1990s, however, things began to look quite different. We will show that, at least for the realm of infrastructures and utilities, the pattern of state-economy relations in Germany has changed quite dramatically over the last decade, and that these changes contribute to a structural transformation of the German political economy. These domestic transformations cannot simply be attributed to EU pressures, and they have not led to a simple transfer of regulatory competencies to the European level either. Their immediate result has been the establishment of a variety of regulatory institutions on the national level. These national institutions are embedded in a developing EU multi-level regulatory framework which is still in flux and whose institutional architecture and political dynamics are still poorly understood.
This paper is organized as follows: First, we will locate the traditional positive state (Leistungsstaat) in infrastructures within the general context of the German political economy (par. II). Second, we will describe the decline and dismantling of this positive state in three central infrastructure sectors (telecommunications, railways, electricity), and assess the relative importance of EU reforms in each case (par. III). Third, we will show that the decline of the positive state does not result in a simple retreat of the state; rather, that state responsibility and infrastructure management take a new form. The infrastructural state has been reborn as a 'regulatory state', with a new institutional set-up and design, and facing new tasks and problems (par. IV). In the fourth part, we will discuss the institutional architecture and workings of the EU regulatory framework that is about to develop. While European regulatory institutions gain in importance, they do not simply replace national institutions and styles of regulation. Rather, European and domestic regulation interact in a complex and dynamic multi-level setup. Finally, we will suggest a few tentative hypotheses on the shape of the European regulatory regime for infrastructure management (par. V.).
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Soziale Marktwirtschaft and the Infrastructural State: The Janus-Face of the German Political Economy
One of the characteristic features of the German political economy was the fact that, unlike some European neighbors, the West German state never engaged in any large-scale industrial ownership. There was no post-war nationalization of key industries, nor was nationalization the response to the crisis of some traditional industries (e.g. steel, ship-building) in the 1970s. Consequently, state-owned industrial enterprises in West Germany accounted for only 3,9 per cent of industrial turnover in 1978, as compared to 24,9 per cent in France (Esser, 1994: p. 109).
This pattern was in tune with the guiding principle of the 'social market economy', which strictly limits the role of the state in the economy. According to this economic philosophy, the state is to refrain from direct, ad hoc interventions into the free play of the market forces, let alone from replacing the market. Instead, the state's proper role is to define and protect the basic ordering principles of the market economy (Ordnungspolitik), and to compensate for the undesirable effects o f the market, e.g. by social policy programs.
A second central feature of the German political economy--and the most important complement to the model of the social market economy--was that the state took a very active role in infrastructural management. Until recently, postal services and telecommunications, energy and water supply, transportation systems (roads, railways, air transport), as well as radio and television, education and research, were all state-owned, state-run, or at lest exempted from market competition. These sectors were considered public services, with general access and provision rights for all citizens. In some cases, the public responsibility for infrastructure management was even...
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