The third force? Independent regulatory agencies and elected politicians in Europe

Governments and legislatures in Europe have created or greatly strengthened independent regulatory agencies (IRAs). Yet they also retain many formal controls over those agencies. The article analyzes whether elected politicians have used their powers to create IRAs in their own image and kept IRAs under tight control or whether they have allowed IRAs to become a distinct set of actors, hence a "third force" in regulation. Principal–agent (PA) theories, largely based on U.S. experience, emphasize the importance of certain formal controls for elected politicians to limit "agency losses." However, an analysis of four European nations between 1990 and 2001 shows that elected politicians did not use their powers to appoint party politicians, force the early departures of IRA members, reverse IRA decisions, or reduce IRA budgets and powers. Using PA theory, two interpretations of this apparent puzzle are offered, each with differing implications for agency autonomy. One is that elected politicians used alternative methods of control, hence they suffered low "agency losses" and IRAs in practice had little autonomy. The other is that elected politicians found that the benefits of IRA autonomy in practice and the costs of applying their formal control outweighed agency losses, and hence accepted agency autonomy

Changing the rules of the game: an analysis of EU influence on electricity and gas liberalization: with a focus on the Baltic Sea Region, and future challenges to EU energy market regulation

This study analyses the expansion of the EU into energy market regulation. It shows that the limits to EU influence and, thereby, EU energy market regulation for the internal energy market, begin where EU influence affects national interests with regard to ensuring energy security. This scientifically established insight bears an important practical implication. The further development of EU energy market regulation as a cornerstone of the internal energy market faces a particular policy challenge: It is necessary to establish a regulatory framework for the internal electricity and gas market, which acknowledges the primacy of national energy security interests. This finding is important in the light of the new and increasing energy policy challenges that some Member States face today, not least as a result of a liberalized energy market. Moreover, in the context of new systemic risks arising from ongoing energy market integration, a politically unstable (in the worst case - collapsing) EU regulatory framework can cause significant social and economic costs for individual Member States. With regard to that, the study points to the increasingly complex policy areas that are made subject to EU integration and calls for more attention to the related regulatory and political risks - also with a view to the current euro crisis. Diese Studie analysiert die Expansion der EU in die Energiemarktregulierung. Sie zeigt, dass die Grenzen des EU Einflusses und damit des EU Regulierungsrahmens für den Energiebinnenmarkt dort beginnen, wo nationale Interessen mit Blick auf die Gewährleistung der Energieversorgungssicherheit tangiert werden. Diese Erkenntnis hat eine wichtige praktische Implikation. Die weitere Ausgestaltung der EU Energiemarktregulierung und damit des Fundaments des Energiebinnenmarktes steht vor einer besonderen politischen Herausforderung: Es gilt einen stabilen gemeinschaftlichen Regulierungsrahmens für den europäischen Strom- und Gasmarkt unter dem Primat nationaler Energiesicherheitsinteressen bereitzustellen. Dies ist von Bedeutung im Lichte wachsender und neuer energiepolitischer Herausforderungen für die einzelnen Mitgliedstaaten, nicht zuletzt als Folge eines liberalisierten Energiemarktes. In Anbetracht neuer systemischer Risiken, die sich aus einem integrierten europäischen Energiemarkt ergeben, kann ein politisch instabiler (im schlimmsten Fall kollabierender) gemeinschaftlicher Regulierungsrahmen für die Mitgliedstaaten hohe soziale und ökonomische Kosten nach sich ziehen. An dieser Stelle verweist die Studie auf die immer komplexeren Integrationsgegenstände der EU und fordert, dass den damit einhergehenden Risiken, regulatorischer und politischer Art, grössere Aufmerksamkeit zu schenken ist - gerade auch mit Blick auf die aktuelle Krise der Gemeinschaftswährung