From Nation State to Europe?: Essays in Honour of Jack Hayward

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From the Nation State to Europe?

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From the Nation State to Europe? Essays in Honour of Jack Hayward

edited by Anand Menon and Vincent Wright

Great Clarendon Street, Oxford OX2 6DP Oxford University Press is a department of the University of Oxford It furthers the University's objective of excellence in research, scholarship, and education by publishing worldwide in Oxford New York Auckland Bangkok Buenos Aires Cape Town Chennai Dar es Salaam Delhi Hong Kong Istanbul Karachi Kolkata Kuala Lumpur Madrid Melbourne Mexico City Mumbai Nairobi São Paulo Shanghai Taipei Tokyo Toronto Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries Published in the United States by Oxford University Press Inc., New York © the various contributors 2001 The moral rights of the authors have been asserted Database right Oxford University Press (maker) First published 2001 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, or under terms agreed with the appropriate reprographicsrights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this book in any other binding or cover and you must impose this same condition on any acquirer British Library Cataloguing in Publication Data Data available Library of Congress Cataloging in Publication Data From the nation state to Europe: essays in honour of Jack Hayward/edited by Anand Menon and Vincent Wright. p. cm. Includes bibliographical references and index. 1. European Union. 2. European Union Countries— Politica and government. 3. European Union Countries— Economic policy. I. Hayward, Jack Ernest Shalom. II. Menon, Anand, 1965– III. Wright, Vincent. JN30.F77 2001 341.242′2—dc21 00–065237 ISBN 0–19–924073–6 ISBN 0–19–924403–0 (pbk.)

Contents List of Tables List of Contributors 1. Introduction Anand Menon I. The EU and its Member States 2. Monetary Sovereignty, Domestic Policies, and Intergovernmental Accord Elie Cohen 3. National Squares and European Circle: The Challenge of Adjustment Yves Mèny 4. State, Europe, and Republic Pierre Grèmion 5. Two French Changes Stanley Hoffmann 6. The Further Off From England: British Public Opinion and Europe Hugh Berrington and Rod Hague II. Social Science and the EU 7. Policy-Making in the EU: Familiar Ambitions in Unfamiliar Settings Jeremy Richardson 8. Constitutional Reform and Treaty Reform in Europe David Hine 9. The European Union and the Bureaucratic Mode of Production Edward C. Page 10. Image and Illusion in the Design of the EMU James Forder

vii viii 1 11 29 46 60 66 97 118 139 158

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III. The EU and Social Science 11. Interacting States Bruno Jobert 12. Breaking Open Black Boxes: The Implications for Sociological Theory of European Integration Colin Crouch 13. The Evolution of Economic Policy-Making in the European Union Peter Hall 14. In lieu of a Conclusion Anand Menon Index

175 195 214 246 253

List of Tables 6.1. Britain and the European Community/Union: to stay or to leave 6.2. Opinion on British membership, 1983–1986, by party identiﬁcation 6.3. Closer links and the British economy: party identiﬁers 6.4. Favourability towards Europe: closer links and the British economy, by year, education, and major party identiﬁcation 6.5. Education and the single currency, by 1997 vote 6.6. British membership of the EC, 1983 and 1986: to stay or to leave

72 78 80 83 84 86

List of Contributors Hugh Berrington, Emeritus Professor of Politics, University of Newcastle upon Tyne Elie Cohen, CEVIPOF Fondation Nationale des Sciences Politiques Colin Crouch, Department of Political and Social Sciences, European University Institute James Forder, Tutor in Economics, Balliol College, Oxford University Pierre Grémion, Centre de Sociologie des Organisations Centre National de la Recherche Scientiﬁque, Paris Peter Hall, Frank G. Thomson Professor of Government, Minda de Gunzburg Center for European Studies, Harvard University David Hine, Christ Church, Oxford University Stanley Hoffmann, Buttenwieser University Professor, Minda de Gunzburg Center for European Studies, Harvard University Bruno Jobert, Directeur de Recherche, CNRS Institut des Etudes Politiques de Grenoble Anand Menon, Fellow of St Antony's College, Oxford University, and Lecturer in the Centre for European Politics, Economics and Society Yves Mény, Director, Robert Schuman Centre European University Institute, Florence Ed Page, Professor of Political Science, Department of Politics, University of Hull Jeremy Richardson, Professorial Fellow, Nufﬁeld College, Oxford University, and Director of the Centre for European Politics, Economics and Society Vincent Wright, was Ofﬁcial Fellow, Nufﬁeld College, Oxford University

1 Introduction Anand Menon Jack Ernest Shalom Hayward was born in 1931. He spent his formative years living in the shadow of imperial Japan—and three of these in a Japanese internment camp during the occupation of the International Concession of Shanghai. Perhaps it was these early inﬂuences which ﬁrst drew him towards an interest in politics (Hayward 1997: 140). Whatever the explanation, Jack has enjoyed a hugely successful career as a political scientist. Successively Assistant Lecturer at the University of Shefﬁeld, Lecturer then Senior Lecturer at the University of Keele, and Professor of Politics (for almost twenty years) at the University of Hull, he spent his last ﬁve years before ‘retirement’ as Professor of Politics and Director of the then newly formed Institute of European Studies at the University of Oxford. His decision to accept the lattermost position was illustrative of his abiding commitment to the development of the discipline of political science in this country. At the twilight of his career, he chose to take on the unenviable task of promoting European studies within Oxford University, rather than enjoy the indulgence of concentrating on his own research. Jack has gained various honours over the years, including being made a Fellow of the British Academy and a Chevalier de la Légion d'Honneur. He has, moreover, taken on many of the major posts within the profession: member (for his sins) of the HEFC Politics and International Studies Panel, Chairman of the Political Studies Association, Executive Committee member of the International Political Science Association, editor of Political Studies, and—most demanding of all—the ﬁrst non-Frenchman to serve on the Jury d'Aggrégation in Political Science. An impressive c.v., in other words, that reveals not only the esteem in which Jack is held, but also his willingness to take on extra burdens rather than simply free ride on the efforts of others. Organizing a Festschrift for Jack proved a challenging task. Not least, the range of his intellectual interests made it impossible even to contemplate reﬂecting them all effectively within a single volume. It may seem strange, in an age where the aspiration to theoretical generality is ever more commonplace, to

2

INTRODUCTION

say this of a man who has written mainly on France and Britain and only recently on Western Europe as a whole. Yet to think this would be to miss the point. For Jack, studying a subject involves exploring the intricacies of the issue at hand and understanding the empirical detail fully prior to placing these ﬁndings within the broader context of political science theory. It is about empirical research as much as it is about vague generalizations; about ﬁnding things out for oneself, rather than leaving the ‘soaking and poking’ to others.1 Research also involves an emphasis on maintaining a clear focus, on intellectual coherence, and on sustaining an argument. The editors could not, therefore, if they wished to remain loyal to the intellectual style of the man and to his self-professed ambition, in his own edited work, to achieve a ‘minimum of consistency that is the prerequisite of attaining added comparative value’ (Hayward 1997: 148), simply produce an unstructured, unfocused jumble of unrelated chapters. To do justice to Jack's scholarship, we were forced to deliberate long and hard as to our focus. Our choice was wide, incorporating issues as diverse as planning (Hayward 1974; Hayward and Watson 1975; Hayward and Narkiewicz 1978), political economy (Hayward 1986b, 1995a), interest groups (Hayward 1966, 1979, 1982, 1984, 1991a, 1995c), French politics (Hayward 1983, 1993), European politics more generally (Hayward and Page 1995; Hayward 1996a), political science and its achievements (Hayward and Norton 1986; Hayward 1986a; Hayward et al. 1999) and the history of political ideas (Hayward 1991b). After lengthy discussion, we alighted on a theme which roughly mirrors the development of Jack's own interests. Having devoted much of his career to politics and policy within individual European states—and France in particular—his attention has increasingly been drawn to the European level, and more speciﬁcally to its impact on the national level. Certainly, he has not always argued that this impact is great (see Hayward 1995b: and Wright's comments, p. 342), but his work has increasingly come to acknowledge the importance of exploring it (Hayward 1996b). Having come to this decision, it remained for us to select a group of contributors who have both worked closely with Jack and would be able to produce high-quality papers clearly focused on the central themes of this book. A cursory glance at the table of contents will show that this proved more than possible. Indeed, the number of those who have worked or come into contact with Jack and who hold him in the highest regard on both sides of the Channel and both sides of the Atlantic meant that we ran the risk of rivalling in size Finer's massive tomes (1997), which Jack prepared for posthumous publication.

1

It is because of his commitment to serious research that Jack's work has endured. To take but one example, his (1959) essay on solidarity is still seen as the best discussion of this idea. See the guide for further reading in Hall et al. (1994: 326).

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Intellectually, editing this Festschrift was like editing any other academic work. The editors were not constrained, as many editors of similar volumes are, by a need to ‘say the right thing’: we have not had to perform token intellectual genuﬂections towards this or that ‘orthodoxy’. Nor did we face the need to state ad nauseam how right Jack has always been, nor boringly to list the names of the intellectual disciples he gained in thirty years of teaching (the notion of having disciples being anathema to a scholar who ﬁercely believes in intellectual independence). Rather, having chosen a subject, we have been free to investigate it honestly and openly. For, as Jack himself has always maintained, intellectual endeavour is about argument, about challenging ‘orthodoxy’, not accepting or, worse, reinforcing it. Scholarship, not reputation, has always been his priority.2 We admire his scholarship; we do not necessarily agree with his conclusions.

From the Nation State to Europe? The central question addressed by this book can be simply summarized: what are the implications of European integration for those engaged in the study of European politics? This can be subdivided into three subsidiaries. First, to what extent, if any, has the existence of the EU substantively affected the member states, in terms of either what they do or how they do it? Second, what, if any, are the implications of integration for the conceptual and theoretical approaches commonly utilized to study national politics? Can the tools used by political scientists to study national politics in Western Europe withstand, any more than can the member states themselves, the pressures imposed by europeanization? Finally, does the EU represent another laboratory within which to test such concepts, or is it, because of its speciﬁcity, an entity which requires sui generis concepts to explain its actions and development? How far does the application of concepts developed from the study of other phenomena help us explain the workings and development of European integration? Each of these three themes merits further examination.

The EU and its Member States The ﬁrst area of concern for this volume is empirical: what impact, if any, has been exerted by the EC/EU on what has traditionally in this country been called the ‘politics and government’ of its member states? This implies more

2

Few contemporary scholars, for instance, would have the intellectual honesty to acknowledge, a propos of one of their own edited works, that it ‘is destined to be modiﬁed and superseded as we have access to a better understanding of a rapidly evolving reality’ (Hayward 1997: 149).

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INTRODUCTION

than an exploration of the way integration imposes or encourages changes in the member states. The EU not only places pressures on its constituent states, but also presents them with opportunities. As Elie Cohen makes clear in a chapter dealing with the process of economic and monetary union, European integration offered not only a way out for French leaders frustrated by the inadequacy of national macro-economic policy tools, but also a legitimizing discourse for policies that might otherwise have provoked far more domestic dissatisfaction. The constraining effects of the EU are also important, however, and recent years have witnessed a proliferation of literature on this theme, as scholars have come to recognize the importance of ‘the direction and magnitude of substantive domestic policy adjustment’ (Moravcsik 1993: 479) as a central feature of integration. Several collections of detailed empirical case-studies of the EU's impact on national policy and policy-making have recently appeared in print (Forder and Menon 1998; Kassim and Menon 1996; Hine and Kassim 1998; Mény et al. 1996; Hix and Goetz 2000). The concept of Europeanization has, in other words, become a central—if ill-deﬁned (Kassim 2000)—element of the contemporary study of Western Europe. Certainly, the European Union has had a profound effect on the member states. Cohen emphasizes that, despite the fact that the French government was a central player in the process that led to EMU, central bank independence, imposed at the demand of the Germans, nevertheless represents a profound sea change for that country. The EU has also inﬂuenced policy outcomes directly by, for instance, limiting state aid, introducing environmental legislation with which the member states must comply, and moving towards a single market. Jobert also points out the way in which integration has often changed the normative framework of public policy in the member states, even when pronouncing on issues outside its legally deﬁned remit. However, as many of the contributors to Part I of this volume emphasize, the effects of integration within member states have been highly patchy, often nebulous, and invariably unpredictable. Pierre Grémion considers the relationship between European integration and the twin symbolic pillars of contemporary French political life: the state and the Republic. Yves Mény tackles the question of the EU's impact on the member states from a policy-making perspective. He argues that a new division of labour has arisen between national and European levels of governance, and that the latter has not only brought about shifting conceptions of interest on the part of domestic actors, but has also altered the very natures of national political systems. Stanley Hoffmann considers the impact of European integration on Jack's beloved France and, in particular, the way in which the process of integration has increasingly confounded those politicians keen to defend French sovereignty against what they see as the threat of

INTRODUCTION

5

integration. Finally, Hugh Berrington and Rod Hague take a slightly different tack, considering shifting British public attitudes towards Europe—themselves partly a product of what the EU is perceived to have done—and the relationship between party afﬁliation and attitudes towards the EU.

Social Science and the EU The ghettoization of EC studies as a distinct subﬁeld meant that theoretical approaches to explaining integration and the working of the EC tended to be divorced from the mainstream political science literature. Sui generis concepts derived from observation of the EC were used to underpin theories concerning its development, a method not particularly conducive to explanatory success but highly effective in generating circular arguments. As the visibility and importance of integration has increased, however, political scientists have increasingly begun to examine the EU more systematically. A case in point was the edited book by Alberta Sbagria (1992), who deliberately set out to persuade political scientists who had not previously studied the EC to turn their attention and apply their theoretical tool kits to it. There is now a tendency amongst contemporary scholars to use general political science methodologies and theoretical approaches to theorize about integration (see Moravcsik 1998; Hix 1999). We are left, therefore, facing the question as to whether the application to the EU of tools and concepts derived from the study of the nation state is appropriate. Whatever the problems inherent in the sui generis approach, does the EU defy attempts at comparison with national politics? Both Richardson and Hine in this volume go some way towards answering questions such as these. They consider, respectively, whether conceptual tools used to study public policymaking in nation states or the lessons of constitutional change within West European states can provide lessons for, and clariﬁcations of, developments at the European level. Ed Page reﬂects on the applicability of certain competing notions of bureaucratic modes of production to the Commission. The notion of the Commission as a ‘co-ordinate bureaucracy’ yields valuable insights into its functioning. These involve not only explanations of the Commission's approach to implementation and impressive legislative output, but also of the relatively weak vertical management structures that characterize it—with the dramatic results witnessed in 1999. In Chapter 10 James Forder underlines the limits of the applicability of the economic models used to explain the beneﬁts of independent central banks in nation states to the case of the EU. He launches a two-pronged attack on the economic thinking behind the creation of the EMU, arguing that the ‘proof ’ of their viability at the national level is contestable and that the EU represents a very different sort of being to nation states anyway.

6

INTRODUCTION

The EU and Social Science Any substantive effect that the EU many have had on its member states has potential implications for the way in which we study national politics. For many years, the EU and the study of integration had little if any impact on mainstream political science. Partly, this was because measures such as EMU and the single market, which have had a clear and marked effect on national policy traditions and systems of government, are relatively recent developments. Partly, too, it was because EC studies were, for many years, a distinct subﬁeld, separate from mainstream political science, and, therefore, not of primary interest to political scientists. Increasingly, following the developments outlined above, scholars have realized that the existence of regional organization in Western Europe poses a challenge for traditional political science. They have asked themselves whether terms and concepts derived to study sovereign states and their political workings are quite as well adapted to a world where sovereignty is partial or pooled. Well-worn concepts have been called into question: the state as the ultimate repository of political and economic power and even legitimacy, governance, national identity, and so on. All have been, to a greater or lesser extent, problematized by the existence of what has increasingly come to look like an additional tier of government. Students of public policy have begun to ask not simply how nation states can do things better, but whether individual member states should attempt to do things at all. The transformation of the state in Western Europe is the theme addressed by Jobert. Whilst he does not directly address the theoretical implications of his ﬁndings, it is clear that if this central political institution ﬁnds itself undergoing profound changes as a result of the EU, then this will have consequences for the way social scientists study Western Europe. Both Colin Crouch and Peter Hall focus on the implications of European integration on scholarly, and particularly theoretical, endeavours in their own ﬁelds of expertise. They investigate, respectively, the implications of the EU for the capacity of sociology to comprehend the boundaries of societies, and for approaches to political economy. Both challenge the notion that integration can be seen simply as an additional variable to be ‘tacked on’ to' pre-existing theoretical approaches to the study of national politics. The emergence of the EU is seen as a challenge to the approaches we have adopted to study even politics at the national level. These three questions comprise our agenda in this book. We fully realize that the issues raised here are far too broad to be tackled thoroughly within a single volume such as this. What we have set out to do, however, is to provide a sample of the kinds of issues that the EU raises for political scientists interested

INTRODUCTION

7

in European politics. We do not, moreover, expect, or even aspire, to ﬁnd deﬁnitive answers to our three questions. If there is anything we have learnt from Jack Hayward, it is that the quest for such intellectual ‘Holy Grails’ is fruitless. Rather, what matters is the degree to which we provoke thought and, better still, debate and disagreement, and thereby further our collective understanding. If we can do so even a fraction as successfully as Jack has done for many years, we will be satisﬁed.

References Finer, Samuel (1997). History of Government from the Earliest Times, 3 vols. (Oxford: OUP). Forder, James, and Menon, Anand (eds.) (1998). The European Union and National Macroeconomic Policy (London: Routledge). Hall, Peter, Hayward, Jack, and Machin, Howard (1994). Developments in French Politics (London: Macmillan). Hayward, J. E. S. (1959). ‘Solidarity: The Social History of an Idea in Nineteenth Century France’, International Review of Social History, 4. —— (1966). Private Interests and Public Policy: The Experience of the French Economic and Social Council (London: Longmans). —— (1974). ‘The Changing Political Context of French economic Planning: A British View’, in Lucien Nizard (ed.), Planiﬁcation et société (Greenoble: Presses Universitaires de Grenoble). —— (1979). ‘Interest Groups and the Demand for State Action’, in J. Hayward and R. N. Berki (eds.), State and Society in Contemporary Europe (Oxford: Martin Robertson). —— (1982). ‘Mobilizing Private Interests in the Service of Public Ambitions: The Salient Element in the Dual French Policy Style’, in Jeremy Richardson (ed.), Policy Styles in Western Europe (London: Allen & Unwin). —— (1983). Governing France: The One and Indivisible Republic (London: Weidenfeld & Nicholson). —— (1984). ‘Pressure Groups and Pressured Groups in France and Britain’ in Gillian Peele and Dennis Kavanagh (eds.), Comparative Government and Politics (London: Heinemann). —— (1986a). ‘The Political Science of Muddling Through: The De Facto Paradigm?’, in J. Hayward and P. Norton (eds.), The Political Science of British Politics (Brighton: Wheatsheaf), 3–20. —— (1986b). The State and the Market Economy: Industrial Patriotism and Intervention in France (Brighton: Wheatsheaf). —— (1991a). ‘The Policy Community Approach to Industrial Policy’, in Dankwart A. Rustow and Kenneth P Erickson (eds.), Comparative Politics Dynamics: Global Research Perspectives (New York: Harper Collins). —— (1991b). After the French Revolution: Six Critics of Democracy and Nationalism (Brighton: Harvester-Wheatsheaf).

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Hayward, J. E. S. (1993). De Gaulle to Mitterrand: Presidential Power in France (London: Hurst). —— (1995a). Industrial Enterprise and European Integration: From National to International Champions in Western Europe (Oxford: OUP). —— (1995b). ‘Europe's Endangered Industrial Champions’, in J. Hayward (ed.), Industrial Enterprise and European Integration (Oxford: OUP). —— (1995c). ‘Organised Interests and Public Policies’, in J. Hayward and E. C. Page (eds.), Governing the New Europe (Oxford: Polity Press). —— (1996a). Elitism, Populism and European Politics (Oxford: OUP). —— (1996b). ‘La Cinquième République et l'intégration communautaire’, in F. d'Arcy and L. Rouban (eds.), De la Ve République à l'Europe (Paris: Presses de Sciences Po). —— (1997). ‘Between France and Universality: From Implicit to Explicit Comparison’, in Hans Daalder (ed.), Comparative European Politics: The Story of a Profession (London: Pinter). —— and Narkiewicz, O. (eds.) (1978). Planning in Europe (London: Croom Helm). —— and Norton, P. (eds.) (1986). The Political Science of British Politics (Brighton: Wheatsheaf). —— and Page, E. (1995). Governing the New Europe (London: Polity). —— and Watson, M. M (eds.) (1975). Planning, Politics and Public Policy: The British, French and Italian Experience (Cambridge: CUP). —— Barry, B., and Brown, A. (eds.) (1999). The British Study of Politics in the Twentieth Century (Oxford: OUP for the British Academy). Hine, D. and Kassim, H. (1998). Beyond the Market: The EU and National Social Policy (London: Routledge). Hix, Simon, and Goetz, Klaus (2000). Europeanised Politics? The Impact of European Integration on Domestic Politics (London: Frank Cass). Kassim, Hussein (2000). ‘Conclusion. The National Co-ordination of EU Policy: Confronting the Challenge’, in H. Kassim, A. Menon, G. Peters, and V. Wright (eds.), The National Co-ordination of EU Policy Making: The EU Level (Oxford: OUP). —— and Menon, Anand (1996). The European Union and National Industrial Policy (London: Routledge). Mény, Yves, Muller, Pierre, and Quermonne, Jean-Louis (eds.) (1996). Adjusting to Europe: The Impact of the European Union on National Institutions and Policies (London: Routledge). Moravcsik, Andrew (1993). ‘Preferences and Power in the European Community: A Liberal Intergovernmentalist Approach’, Journal of Common Market Studies, 31/4: 473–523. —— (1998). The Choice for Europe: Social Purpose and State Power from Messina from Maastricht (London: UCL Press). Sbagria, Alberta M. (ed.) (1992). Euro-Politics: Institutions and Policymaking in the New European Community (Washington, DC: The Brookings Institute).

I The EU and its Member States

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2 Monetary Sovereignty, Domestic Policies, and Intergovernmental Accord Elie Cohen Why have sovereign states made the decision to abandon discretionary monetary policy and to renounce their national currencies in favour of adopting the euro? The ﬁeld covered by the explanations furnished is boundless and affords the interest of combining scholarly political and economic explanations, practised rhetoric on the part of Community actors and discourse among national political authorities for domestic consumption. The study of monetary policy in the EU holds a threefold interest: descriptive, analytical, and normative. First, it involves contributing to a history of the ongoing construction of Europe. Reconstituting the decision-making process at both the national and the European level will help clarify this history. Second, there is the need to understand the links between exchange policy and macro-economic equilibrium, real economy integration and ﬁnancial factors, central bank independence and economic performance. Finally, the development of EU involvement in monetary matters provides an interesting case-study by means of which to assess the appropriateness of intergovernmentalist, supranationalist, and infragovernmentalist approaches to the process of European integration.3 A set of themes around the questions of monetary policy, the independence of central banks, and the separation of monetary policy and budgetary policy, has invaded the political arena. These are constantly debated, indeed to

3

‘In some crucial spheres Union governance is international; in other spheres it is supranational; in yet others it is infranational . . . The infranational approach is characterised by the relative unimportance of the national element in the decision making. Technical expertise, economic and social interests, administrative turf battles shape the process and outcome rather than “national interest”. Infranational decision-making is typiﬁed by the miasma of say health and safety standard setting, telecommunications harmonisation policy, international trade rules of origin . . . There are three approaches but also three modes of governance . . . the infranational approach downplays both the Community and the member states . . . the actors tend to be both at union and member states levels, administrations, departments, private and public associations, certain, mainly corporate, interest groups’ (Weiler et al. 1995: 24–5).

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the point where some are accepted simply by virtue simply of their endless repetition. Moreover, any student interested in the various aspects of the EU's relationship with monetary policy—be it adopting a single currency, the virtues of central bank independence, or the reasons for dissociating monetary and budgetary policies—quickly ﬁnds that existing theory offers no ready explanations. Neo-functionalist assertions according to which EMU is the culmination of the spillover argument, intergovernmentalist arguments about the centrality of (always somewhat nebulous and illdeﬁned notions of) national interest, and infragovernmentalist attempts to tread a middle ground are all equally unconvincing. It is essentially the conjunction of French and German interests that has produced the euro. It is the need felt by Germany and France, for reasons of foreign and domestic policy, to bind themselves to one another that explains the euro being passed off as an economic project when it actually represents a political solution. To substantiate this popular thesis on the central character of the power relationship between France and Germany in the realization of the euro, I shall proceed by stages. First, I shall establish the nature of an independent central bank, and the massive sea change such an institution implies for a country like France (for a more theoretical discussion of the notion of ECB independence, see Forder, Chapter 10, below). Secondly, I shall try to explain why the French government came to consider that only a break with interventionism and the installation of automatic policies under the guidance of independent bodies made it possible to negotiate an effective way out of crisis. Thirdly, I shall argue that only the political determination of the German government to give an earnest display of its good faith at the time of reuniﬁcation enabled the process of monetary integration to move forward. Fourthly, I shall show how the end of the DM dominance in Europe involved adopting principles and institutions in keeping with the ‘German monetary order’. Finally, I shall return to the theoretical debate alluded to above.

What Is an Independent Central Bank? It is customary to analyse the creation of an independent central bank as a response to a credibility deﬁcit afﬂicting elected authorities (Eijfﬁnger and de Haan 1999). Independence is thus construed as a strategy of ‘tying one's hands’ (Elster 1984). Two versions of this thesis coexist. The ﬁrst, exempliﬁed by the studies of Michel Aglietta (1997), ﬁnds the decisive reason in deregulation and ﬁnancial globalization. As private operators effectively control the creation of money and markets are deregulated, the international market takes on a determining role, effectively allowing (or, depending on one's perspective,

MONETARY SOVEREIGNTY, DOMESTIC POLICIES

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forcing) national monetary authorities to free themselves from the shackles of national fordist compromises. In this context, an independent central bank is in a better position to respond to market demand and more credible because it tends to be more predictable than are governments. The second and older thesis was formulated by Kydland and Prescott (1971). The authors explain why, when it comes to money, predeﬁned rules of conduct on the part of public authorities are preferable to day-by-day discretionary steering. They draw the conclusion that independent central banks are better able to attain their objectives than their state-controlled equivalents. This has to do with the time inconsistency of priorities: a legitimate government subjected to continuous pressure by its electors, even if it has a long-term preference for monetary stability, is led in the short term to prioritize employment. Government, besides being more sensitive to employment than to inﬂation, is subject to the rules of political cycles which cause it always to endorse policies that are unsuitable but yet meet the expectations of the electorate when elections come round. The only means of combating this negative state of affairs is to disconnect budgetary policy and monetary policy, and to hand over the latter to actors who are more concerned with the long term and less inclined to be swayed by the pressure of interest groups. Barro and Gordon (1983) established not only that actors anticipate an inﬂationary bias in the performance of government which has an immediate subversive effect on public policy, but also that, in the long term, the discretionary manipulation of money in an expansionist direction has no practical effect and increases inﬂation, thereby generating suboptimal situations. Cukierman et al. (1992) add that the conservatism and long-termism of central bankers strengthens their position in ﬁghting inﬂation. Such a policy comes not without costs, if only because it makes macro-economic coordination more difﬁcult. Such theses raise considerable problems. On the one hand, they are empirically questionable. The best anti-inﬂationary policies have not always been conducted by independent central banks. During the 1960s and 1970s, although the Bank of Japan was not independent, its track record in terms of inﬂation was far better than that of the United States Federal Reserve. Conversely, rigorous anti-inﬂationary policies have been applied by legitimate governments which have worked with a mandate from their citizens (as was the case in France after 1983). On the other hand, a bank such as the Bundesbank, which is expressly seen as independent of the political authority, is not consistently so over a longer period. Moreover, the pressure brought to bear by a government over a supposedly independent central bank, whose statutes it can frequently reform merely by legislation, exercises an invisible but decisive inﬂuence on the bank's behaviour. And, above all, the act of relinquishing policy-making in favour of an independent authority is the doing of

14

THE EU AND ITS MEMBER STATES

politicians themselves, who draw up the statutes and make the appointments. What can they then be said to relinquish? Above and beyond all these arguments, what exactly does independence mean? How is it exercised? What is there by way of counterbalance? Is independence related to objectives or means? With what degree of precision does the law deﬁne the objectives and margins of manœuvre of a bank in its choice of instruments? Are there provisions to overturn a decision perceived by government as illegitimate? And what is the procedure for appointments? As will be seen, the replies given to these questions in the context of the EU go far beyond the economic argument about the time inconsistency of the monetary choices made by politicians. All the more so because, if the performance of central banks in the struggle against inﬂation is acknowledged, this is far less the case when assessing the costs of disinﬂation or the impact of these policies. In the case of France and Germany, at the outset of the process that led to the single currency, a greater contrast in situation would have been hard to ﬁnd. The Banque de France, nationalized by the Front Populaire, was an instrument in the service of an integrated macro-economic policy deﬁned by the government and implemented by the Ministry of Finance. Those in charge of the Treasury department (Trésor), controlled the bank through their supervision of the ﬁnancial markets. Moreover, the Banque de France underpinned the economy of administered ﬁnancing since it ﬁnanced the Trésor-managed credit restrictions and administered interest-rate policy on behalf of the government. Finally, the governors of the Banque de France, who are frequently senior ofﬁcials from the Trésor, were hardly opponents of the government even in the midst of an inﬂationary spiral. In contrast, the Bundesbank, even if it did not always display the zeal in the ﬁght against inﬂation that it has since the second oil shock, is bound by the texts that govern its mandate to ﬁght inﬂation and protect the currency. Its statutes guarantee it control over monetary policy and independence from the Chancellery which manages the budget, while incomes policies are determined by social negotiation (Marsh 1992). Public adherence to the culture of stability and the historic performance of the Bundesbank in the ﬁght against inﬂation, coupled with post-war prosperity, made the bank an untouchable. The divergent records of France and Germany in the struggle against inﬂation and in fostering growth have nurtured the idea of there being a direct causal relationship between independence and economic success, where in fact economic outcomes had multiple causes. Closer examination of each state will clarify this.

MONETARY SOVEREIGNTY, DOMESTIC POLICIES

15

The Unconvincing Case for EMU The European Commission initiated a series of studies dealing with the virtues of a single currency, published in the wake of the European Single Act. Disturbingly, the debate amongst professional economists took place well after the publication of these reports, when the euro was already effectively a political reality. Furthermore, these reports did not draw upon specialist knowledge on the matter, being concerned more with developing a strategic argument than elucidating a genuine economic theory. The initial Commission studies stated or accepted as a self-evident the fact that the existence of a single market required Europe to have a single currency (Emerson 1990). The ﬁrst economic formalization issued by the Commission was the Padoa-Schioppa Report (Padoa-Schioppa et al. 1987). This takes Mundell's incompatibility triangle as its starting-point. According to this, the combination of capital liberalization and ﬁxed exchange rates means that national authorities have no effective control over monetary policy. The attraction of this argument was clear: it implied that the whole tangled question of sovereignty was effectively a non-issue. Given the incompatibility triangle, sovereignty in monetary policy was nothing more than a myth. The political conclusion of this economic demonstration was simple. In abandoning the franc or the lira or the peseta, one is giving up nothing; one cannot give up a power one does not possess and such power was exercised de facto by the dominant currency within the system, the DM. Such arguments, whilst superﬁcially convincing, are none the less ﬂawed. For one thing, they imply that national governments had decided irrevocably to renounce their ability to manipulate exchange rates, which they had not. Not only were there frequent realignments of the ERM, but governments still retained the right to resort to the exchangerate weapon should the need have arisen. In the EC of the Single Market programme, it had become commonplace to consider that the free circulation of capital was essential and that discretionary control over the exchange rate was no longer an option. This was, however, a political and not an economic argument. It was certainly appealing to national political leaders to argue that the single currency was necessary to regain sovereignty, rather than being a political choice to abandon policy tools which could conceivably reinforce policies intended to promote growth and reduce unemployment. To present the Padoa-Schioppa thesis as economically self-evident is merely to afﬁrm that governments, in opting for ﬁxed exchange rates and the free circulation of capital, decided to abandon the monetary weapon. Inasmuch as the opinion of economists counts, the real debate on monetary integration amongst professional economists began around 1993, in the context

16

THE EU AND ITS MEMBER STATES

of arguments about the effects of the franc being tied to the DM for growth and employment. The debate intensiﬁed in 1995, as the profession hotly debated optimum currency areas and Europe's suitability for the EMU experiment. By this time, the die was already cast. However one tackles the question, whether from the perspective of an optimum currency area (OCA), transaction costs, the relationship between inﬂation and exchange rates or the efﬁciency of ﬁnancial markets, there is no selfevident argument in favour of the single currency. Krugman (1998) has recently argued that the least optimal situation is one in which currencies are ﬂoating and where actors are undecided about the efﬁcacy of market mechanisms. This is precisely the situation in which European countries other than Germany were placed during the second phase of European monetary union. And to see monetary policy as a technical problem which does not affect redistributive policies, and hence is unlikely to provoke serious controversy over domestic policy, is to disregard the lessons of the European monetary crises in the 1992–5 period. The single currency and the independent central bank are the natural consequence neither of globalization, nor of the ideological tyranny of Friedmanians, nor of any specialist consensus that eluded the national redistributive debate.

France, Germany and EMU To understand the underlying forces which drive the process of monetary integration, one has to return to basics at the national level. Let us now consider an applied analysis of the process which led to the adoption of a different economic strategy and entailed France and Germany giving up their currencies and moving into a completely new political and economic order. Consider France, a country apparently as unlikely as any to consider depriving the state of its regulatory macro-economic and sector-based obligations. What could have happened? To answer this a short historical digression is necessary. By the end of the 1970s, the notion was embedded, ﬁrst, that France was unable to correct its economic afﬂictions with the traditional tools of macroeconomic policy and, second, that France was could not effectively control its economy when coordinating its policy with Germany. Neither the attempt at reﬂation by Schmidt and Giscard d'Estaing in 1979, nor the creation of the European monetary system was really successful. In these circumstances, the French government, faced with its inability to curb inﬂationary and wage pressure, searched for a mechanism to allow it to carry out the necessary reforms. The Barre government quickly reversed the priority accorded to public action. The ﬁght against inﬂation was prioritized, control over progression in the money supply becoming the instrument, and the question was

MONETARY SOVEREIGNTY, DOMESTIC POLICIES

17

raised as to whether the state should continue to subsidize ‘lame-duck’ industrial sectors (Jobert and Theret 1994). The second oil shock and the proximity of the 1981 presidential election nevertheless unnerved Barre. Hence, although the government accepted the idea that priority should be given to the ﬁght against inﬂation, fears about the mounting level of unemployment, and the political problems this could cause, stymied effective action. With the arrival of the left in power in 1981 came two years during which the failings of the Giscardian interventionist model were simply aggravated. Between 1981 and 1983, massive reﬂation ended in three devaluations, a policy which in 1983 concluded in a break being made with Keynesianism in one country and with Colbertian social policies. In 1983, François Mitterrand broke not only with the policies pursued in 1981/2 but in a radical way with the remedies for recession followed since 1974 and with policies pursued since 1945 in the reconstruction and modernization of France. The essential notion behind the new course adopted was that of automatic policy-making and the means to carry out this transformation was Europe (Cohen 1996). In a Europe where traditional tools of reﬂation and devaluation were no longer effective, competitive disinﬂation was seen as the only viable alternative. However, it would not be easy to sell this strategy to public opinion, given its attendant costs such as real income stagnation. Mitterrand and his government thus needed a great cause, a major discourse, to legitimize their new economic strategy. That great cause was to be Europe, the discourse the inﬂuence of French power extended over the continent, an area more its measure than that of a medium-sized nation. In this policy of competitive disinﬂation, the coupling of the franc and the DM became the cardinal point of macro-economic policy, the external counterpart of the policy of competitive disinﬂation internally. The only drawback, however, was that in this system France lost all power over its own monetary policy. From the moment France gave up the weapon of the exchange rate, it was in a situation of complete dependence on Germany. Hence, it was also felt necessary to question the power of the DM as dominant currency in the European monetary system, and of the Bundesbank as the decisive macro-economic authority at the European level. Thus, it was France that rapidly called for the process of monetary integration to be reactivated. Among the different schemes for the revival of Europe envisaged by Delors in 1984, there was one for monetary integration which, although not adopted there and then, remained very much on the agenda. The long-awaited chance to obtain Germany's consent to monetary uniﬁcation was provided in 1989 with German reuniﬁcation. Negotiations between the two countries were intense and hinged upon an exchange whereby France consented to accept the terms of German reuniﬁcation in exchange for the acceleration of European monetary integration.

18

THE EU AND ITS MEMBER STATES

In sum, the euro was urged on by two powerful forces. The ﬁrst was national. Once the traditional instruments of economic regulation had proved ineffective, given that acceptance of competitive disinﬂation implied a concomitant abandonment of discretionary policies in favour of automatic policies, and from the moment of the de facto abandonment of the interest rates, it became for France a political necessity that the monetary integration of Europe should take place, if for no other reason than to recover space for the full exercise of liberty. This strategy entailed monetary union, the euro and the constitution of a central European bank which would be directed on the principle of one country, one vote. The second force was geo-political. EMU was made possible by German uniﬁcation. After wresting this concession from Germany, France pursued a policy in the 1990s which was contrary to its immediate economic interests but which enabled it to meet the major historical objective that French governments had set themselves, namely the monetary integration of Europe.4 This very much abridged account of events leaves a number of questions in the air. First, if the euro is essentially a Franco-German affair and if France tenaciously pursued its objective of ending the European dominance of the DM, why did other countries rally round, sometimes (as in Italy) making real sacriﬁces? Second, given that the movement in favour of the euro is understandable, why was the German monetary order adopted, based as it was on the independence of the central bank? And third, why did France resort to this concocted external constraint to effect the modernization of its economy and to launch its structural reforms in public services, whereas other countries apparently needed no such constraint? The answer to the third of the questions can be found in the fact that France reacted in a unique way to the second oil shock. Under the cover of ﬁghting inﬂation, the left set about stimulating the economy, applying a Keynesian strategy in isolation, state-driven structural reform through nationalization, and expansion of the welfare state. The result of the experience was that the left was forced to face some obvious and highly uncomfortable facts: in an open economy, reﬂation helps one's neighbour; a budgetary deﬁcit restricts margins for manœuvre; devaluation is ineffective in restoring competitiveness; underhand protectionism can achieve nothing against a stalemate affecting specialization. The solution adopted was neither British (Mrs Thatcher's shock therapy) nor Dutch (a mix of institutionalized social compromise and emergency measures taken in a bipartisan context) nor German (separating budgetary policy and monetary policy, and a crisis compromise) but French, in that it was founded on a discourse of continuity, a solemn call for the nation to mobilize so as to oust the spectre of decline, and

4

Jean-Paul Fitoussi (1995) caused a considerable stir by being the ﬁrst academic economist publicly to denounce ‘sado-monetarism’, as it later came to be called.

MONETARY SOVEREIGNTY, DOMESTIC POLICIES

19

the determination to rise to the occasion and press for the acceleration of European construction. From then on, what was called for by the integration of the French economy in the global economy was justiﬁed by the grandeur of the European design. Europe as a power became, for France, the future.

The Euro and the Franco-German Partnership The Franco-German agreement which founded the Coal and Steel Community (ECSC) was ﬁrst and foremost political: it was intended to be such and was implemented as such. Its objective was not to facilitate French access to German coal and steel, for why then should there have been a need to set up a High Authority, a Council of Ministers and a whole mechanism of vote-weighting, thereby enabling the partnership to dominate without imposing? Similarly, the fact that the EDC was built on the same model so soon after the ECSC was set up is evidence that, beyond the practical forms of the partnership, the driving force was political and was fed by the determination to have done with European wars and to build an alliance for peace and for prosperity. With this central fact established, Franco-German relations ﬂuctuated. The phases of consolidation and aloofness stemmed as much from a common mind as from the impossibility of bringing the United Kingdom into a triangular operation. And indeed, on the major geo-political and geo-economic options, Franco-German divergences were difﬁcult to resolve. In the economic ﬁeld, France did not profess the militant free-market views of an Erhard and offered proof that the visible hand of the state could be as effective as the invisible hand, which would be a permanent source of tension in relations with the United Kingdom, with the GATT and with the United States. Regarding the Community, France only accepted the Common Market in return for a strengthening of its customs union dimension and for coupling it with the Common Agricultural Policy. In the matter of diplomacy, the quarrel over the Atlantic Alliance remained permanent. Indeed, the Bundestag went so far as to snub de Gaulle publicly by adopting a preamble that changed the tone of the Elysée Agreement. And yet, the will to move forward, the absence of the United Kingdom at crucial moments in the process of integration, and the relative readiness of the other partners to accept the line taken, produced what was effectively a European directorate exercised by France and the Federal Republic. In a monetary context, the Franco-German relationship took on growing importance as the Bretton Woods system languished and as European integration, notably in agriculture, accelerated. France made the deﬁnitive ﬁnancial settlement of the CAP and the formulation of plans for economic and monetary integration explicit conditions for British entry. The plan for economic and monetary union was launched at the 1969 Conference at The

20

THE EU AND ITS MEMBER STATES

Hague. Certainly, France's determination to preserve its autonomy in the macro-economic context, its lesser awareness, compared to Germany, of the struggle against inﬂation, its constantly reafﬁrmed priority for a policy of growth and full employment, stood in contrast to its search for monetary support in the event of the franc coming under attack. None the less, the structures for examining the conditions of convergence were in place. The collapse of the Bretton Woods system, conﬁrmed in the 1975 Jamaica Agreement, helped to activate the search for European solutions, the more so since early European reactions to Nixon's 1971 decision to end dollar convertibility were uncoordinated and resulted in the Six splitting into three monetary subzones. An early attempt at a solution—the ‘snake’—was short-lived. Allowing European currencies to ﬂuctuate within narrow limits and within larger ones vis-à-vis the United States put signiﬁcant pressure on weaker currencies. In the mechanism adopted, the weakest currency was required to adjust by raising itself to the level of stability and credibility of the leading currency, the DM. As long as the franc's weakness was due to an inﬂationary differential which penalized France, it was difﬁcult for Paris to demand Germany provide automatic support for the franc. So long as France put its faith in isolated reﬂation, when this policy clearly beneﬁted its neighbours, worsening the external constraint without any visible effect on industrial activity and employment, France could do no more than call for a co-ordinated attempt to stimulate the economy. With the oil, monetary, and ﬁnancial crises of the 1970s, the project for EMU launched at The Hague was abandoned. Raymond Barre's election as Prime Minister in 1976 and France's apparent conversion to the ﬁght against inﬂation opened the way for the creation of the European Monetary System. The objectives of the EMS—the co-ordination of economic policies, combined defence of currencies under attack, and the deﬁnition of a unit of paper currency, the ECU—were bound to disturb the Bundesbank. Schmidt dismissed these misgivings and agreed to play the role of pace-setter and provide Europe with a new mainstay. Schmidt worried about the loss of direction of America under Carter, and realized that there was nothing to gain by confusion in Europe. He saw in Giscard d'Estaing a pragmatic leader, well able to guide France away from Gaullist dogmatism. Even so, the EMS was severely tested with the second oil crisis, the failure of the combined attempt at reﬂation, the loss of control over inﬂation, Giscardian inconsistency, and the arrival of the left in power. With the lesson learnt, however, the left returned to the policies outlined by Barre in 1976. In 1983, France, having embraced virtue, made the ﬁght against inﬂation its priority and abandoned the recourse to periodic devaluation. From now on it would be unacceptable for defence of the franc to be the responsibility of France alone when speculative pressure on the franc could be accounted for by the effects of German monetary or exchange policy. If the single market

MONETARY SOVEREIGNTY, DOMESTIC POLICIES

21

was an initiative of the new President of the Community, Jacques Delors, and of liberal inspiration, France requested and obtained in the Single Act a new boost for monetary integration. Here again a dual momentum for monetary integration resulted in the euro. On the one hand, there was undoubtedly a shared determination among Europeans to achieve better control over monetary parity at a time when economic interdependence in Europe was increasing and the Bretton Woods system had foundered. In addition, however, there was a ﬁerce determination to ﬁnd a new stability for economic and monetary relations between France and Germany, given that the DM was established as the dominant currency in western Europe. By itself, a determination to reform the European monetary system—one not shared by a number of France's European partners—would never have been sufﬁcient to energize the process that culminated in Maastricht. Alone, French pressure to restabilize Franco-German monetary relations would never have been enough to wean Europe from the mark, in spite of the fact that, since the Werner Plan, monetary integration was on the pro-European agenda for reform. It required an exceptional circumstance for Chancellor Kohl to rise above the misgivings of the Bundesbank, take upon himself the unpopularity of such a measure in Germany and agree to the acceleration of the process that François Mitterrand urged on as an earnest declaration of a reuniﬁed Germany's attachment to a further integrated Europe. The best witness to the central character in the economic governance of France of the irreversible commitment to the euro was the administration between 1992 and 1995 of the second phase of EMU. France, in the same way as other EMU candidates, was strictly obliged to respect the ﬁve criteria for qualiﬁcation. No one forced France to make ﬁxed parity between the franc and DM the major objective of its macro-economic policy. Above all, no one forced it to inﬂict on itself a monetary policy that replicated that of the Bundesbank under completely different economic conditions: torpor versus overheating, pressure on the ﬁnancial system versus an absence of deregulation, explosive unemployment versus sector shortages. And yet, in spite of electoral campaign preoccupations and of rising unemployment, and although Italy, Spain, and the United Kingdom had been able to exploit the newfound freedom of exchange to conduct a monetary policy that was more conducive to stimulating economic activity, France chose uncompromisingly to couple its currency with the DM. When the issue turned on the question of power, short-term economic considerations counted for little.5

5

France resisted the economics lesson publicly administered to it in the Financial Times (29 July 1993) by a group of eminent economics professors from MIT, including Olivier Blanchard, Rudy Dornbusch, Stanley Fisher, Franco Modigliani, Paul Samuelson, and Robert Solow. France opted for monetary and exchange-rate discipline in the cause of monetary integration and of saving the euro.

22

THE EU AND ITS MEMBER STATES

The institutional mechanism adopted in order to set up and operate the European central bank is clearly based on the German model, even though the particularities of European construction have left an appreciable degree of imprecision about how this organ actually functions. Indeed, central bankers, who were decisive in making the institutional choices, have shown considerable reticence in undertaking the process which the European Council invited them to. In the ﬁrst memorandum submitted to the Delors committee by the German section, it was afﬁrmed right away that one could not talk of a European central bank unless it was an independent central bank, unless its culture of stability was shared, and unless, as a preliminary, all the member states concerned allowed totally free movement of capital. Indeed, by endorsing a model based upon an independent central bank, the separation of monetary policy and budgetary policy, a system of appointing council members that guarantees their independence, and giving the ECB the single objective of ﬁghting inﬂation, the constituents of the European Union endorsed ipso facto a regime of independence that is far more powerful and comprehensive than the German one (see Forder, in Chapter 10 below). The independence of the ECB is of a constitutional nature. The ECB is not faced by an accountable political authority and the publicity it allows for its discussions is limited. It is true that no one knows how the ECB will evolve, as the presence of the eleven national central bankers cannot fail to have an effect, even if one assumes that the directorate of the Six will be more coherent. Moreover, the ECB has to give an account of itself before the European Parliament and pressure is mounting for its debates to be made public within a reasonable time. Even so, the Treaty of Maastricht which pointed the ECB in the direction it should follow, the criteria for convergence, the Dublin Stability Pact and the decision that the seat of the ECB should be Frankfurt, all go to illustrate how fundamental was the barter made between the French, who wanted the euro at any cost so that Europe would relinquish the mark, and Germany, who agreed to the euro on the condition of its being a Deutschmark clone.

Rule-Based Co-operation or Macro-economic Co-ordination The theoretical beneﬁts of economic co-ordination within a Europe undergoing integration are familiar: there is the response to interdependence between countries and the means of furnishing a stable framework for the organization of markets for goods and exchange rates (Muet 1995). But co-ordination can take two forms—that of discretionary policy and that of rule-based cooperation (Cohen 1997). As was seen at the time of German reuniﬁcation, discretionary coordination was a failure as the Twelve, then Fifteen, were incapable of deliberating

MONETARY SOVEREIGNTY, DOMESTIC POLICIES

23

and deciding on—then implementing—co-operative strategies, while growth declined, unemployment took off, and the political consensus eroded. On the other hand, they have shown themselves as being remarkably effective participants in rule-based co-operation. The Maastricht criteria constitute an explicit, authoritative frame. They enforce the movement towards convergence without specifying the methods to be used, or the budgetary and social choices to be made. Each country must ﬁnd its own means of achieving its programme for convergence and budgetary consolidation. However, the Dublin Stability Pact is also an automatic and enforcing mechanism urging budgetary rigour once the euro is in place. There was a time when it was thought that the delegation of monetary-policy autonomy to the ECB required reafﬁrming the autonomy of national governments in respect of the budget and a common control of exchange-rate policy. Yet what lies behind the Stability Pact has nothing to do with a discretionary policy for budgetary co-ordination. It is an automatic mechanism for assessing the degree to which budgetary policies conform to the common objective, and for sanctioning anomalies. Thus, not only is the budgetary policy of different nations given a framework, but nations themselves recognize that the Commission has its own right to question the appropriateness of policies pursued. To bring the ediﬁce of co-ordination through regulation to the point of completion, all that is now required is a more stringent deﬁnition of economic imperatives, of what we in France call the ‘economic government’, which in the new arrangement becomes an informal mechanism for consultation on subjects of common interest. When one reﬂects on the methods used in reviving the economy since 1984, the contradiction between co-ordination and co-operation is hardly surprising. Whether it is the Single European Act or the Treaty of Maastricht, or now the Treaty of Amsterdam, there is profound continuity and a common logic. Integration is never achieved in the transparency of options chosen, in the explicitness of issues, or through public deliberation. Progress is justiﬁed in the name of a European imperative deﬁned in the widest categories. A procedure is deﬁned to achieve the objective, and for the rest, great trust is placed in the institution whose duty it is to translate the ambitious political design into rules and operating systems. No one had calculated the effects of the Single Act on the national public-service model. Yet once the decision was taken and the rules established, successive governments discovered some merit in an external constraint in the form of the Commission which exempted national political actors from assuming direct responsibility in the demonopolization of the sectors concerned. Similarly, when the details and methods of convergence came to be deﬁned in the Treaty of Maastricht, nobody imagined their coercive and constricting nature in a context where France met the criteria easily (1.5 per cent

24

THE EU AND ITS MEMBER STATES

of GDP public ﬁnance deﬁcit for a target of 3 per cent in 1989). And when the rules on deﬁcit restriction for the posteuro period were agreed on in Dublin, France urged the semantic compromise of ‘stability and growth pact’ rather than the limitation of margins for national manœuvre without setting new margins at Community level. One can understand all this in a political context marked by the reticence of certain countries, including France, to go for political union and the determination of others, like Germany, to see that their concept of monetary order went unchallenged. In fact, the political accountability of a supranational authority is a priori weaker than that of a national one. And to remedy the weakness, a device for the monetary ﬁeld has been found in the shape of an independent central bank, having a limited scope of activity since it has only one objective of quasi-constitutional character, that being price stability. The Dublin Stability Pact derives from the notion of limited competence. Its justiﬁcation is in fact the objective of price stability pursued by the independent bank. It is less a matter of the inception of a budgetary policy, more that of extending a policy for stability. To move beyond co-operation through rules and delegation towards an independent authority, so as to envisage coordination and, further, a federalist budgetary policy, would suppose rethinking the question of accountability, hence raising afresh the question of democracy. In budgetary matters, accountability is still rooted in the national process. Increasing the EU's budgetary role and, in particular, seeking to further, through the co-ordination of ﬁnancial positions, a form of differentiation between states would presuppose the existence of an accountable democratic authority. All this begs the question as to whether, with a single market and a single currency, one can still have conﬁdence in rules and in delegated authority or whether politics will re-emerge—politics, that is, in the sense of a manifestation of discretionary power, with its basis in the development of accountable deliberative authorities and anchored in a public European space. What is astonishing in the current state of affairs is that the central bankers appear more aware than do the politicians of the dangers in this lack of accountability.6

6

For Hans Tietmeyer, governor of the Bundesbank, the imbalance is unacceptable in the long term for reasons that have to do with the smooth running of the European economy, with the balance of power in a democratic society, and with the effectiveness of monetary policy itself. And he points out that, if the ECB is the only federal economic authority, then, when the crunch comes, protest is likely to centre on the ECB, which would be both misleading and unhealthy. In his mind, political union is the necessary sequel. See the statements he made in public at the Paris meeting of the Mouvement européen on 28 Oct. 1997.

MONETARY SOVEREIGNTY, DOMESTIC POLICIES

25

Beyond Intergovernmentalist, Supranationalist, and Infragovernmentalist Positions Transfers of competence, rule-based co-operation, automatic policies, the development of non-elective authorities, regression of the public-sector system of intervention, the impossible reform of redistributive systems, the attachment to emblems of power and sovereignty—the gap between political discourse about the economy and the ability to exercise control in the economic sphere claimed by government has never seemed so wide. Viewed from this angle, the ongoing debate between political analysts takes on new meaning. The above clearly illustrates the inanity of neo-functionalist theses on the end of the nation state, on Europe as a construction sui generis, on the integrating attributes of irreversible processes, and on the homogenizing effects of the legal norms emanating from the Courts and the Commission. EMU, like the Single Act, and all the progress made in European integration, is the product of intergovernmental accord. The progress made is the doing of assembled governments which until now have taken fairly little account of interest groups and public opinion in their respective countries (Zysman and Schwartz 1998). Is one to see this as representing a new kind of governance, as a ‘regulating state’ in the act of becoming which, based on the model of non-majoritarian authorities in the United States, would see government hand over power to legal and specialist authorities which call speciﬁcally for expertise and within which there is no distributive conﬂict (Majone 1996)? This would be to fail to recognize the political character of monetary policy and also to fail to recognize the real impact of the institutions of EMU on economic activity and redistribution. Fritz Scharpf, on the other hand, maintains that ‘negative’ European integration, which until now has prevailed, carries within it a challenge for the viability of welfare states and hence for democracy (Scharpf 1997). One result nevertheless has come about. European institutions do not yet comprise a regulatory state, even though they present the features of an agency endowed with an incomplete mandate. Once the context is decided, a relatively autonomous space is created into which national bureaucracies and Brussels authorities plunge. Reforms, arbitration, legal decisions take on consistency and in fact national legislation. To demonstrate that in their day-to-day activity the European Court of Justice and national courts display real autonomy and are not subject to constant supervision is merely to recognize that a nation's delegated bodies, set up to administer a small area within the sphere of national activities that is granted them, do it well. To claim to see in this the autonomous action of bodies freed from supervision because of rising trade within the Community, because of the number

26

THE EU AND ITS MEMBER STATES

of prejudicial referrals, and of the multiplication of European regulations (Stone Sweet and Caporoso 1998) is either to make a trite quantitative observation—once again Community rules and their interpretation by the courts have been deliberately established by sovereign nation states to maintain order within an integrated area of trade—or it is wilfully to disregard all counter-arguments of which no account is taken in such quantitative treatments. How is one to account for the fact, for instance, that it required a solemn political occasion and the unanimous consent of the governments for the ruling on Cassis, the Dijon cordial, to receive general application? How is one to explain that, to this day, in spite of umpteen trial runs over the last thirty years, there is still no company that is granted European statutes? The governments, even in specialized legal contexts, are not brushed aside, and for three reasons. The ﬁrst has to do with self-censorship on the part of the authorities in Brussels in respect of what they know of the resistance put up by national governments; the second with the form of package negotiations that every government continually carries out with Brussels; the third with the state of public opinion and the electoral calendar. European administrative bodies are not merely ﬂoating in a vacuum. They work by force of circumstance towards integrating what the ﬂuctuating mobilization in favour of Europe brings forth. On public services and welfare, as on competition, they gauge how mentalities are evolving and endeavour to retain the essence of projects that never succeed without set-backs, be they real or tactical. It is time, then, that an armistice was declared between supporters of the three schools. The European Community is not a pure international organization, hence the classical theory of international relations cannot provide an account of its architecture, its functioning, and the mode of articulation between states and Community institutions. However, these institutions are not autonomous, masters of their development, because the scope of their activities has been delivered over to them by states and is subject to periodic revision. The Courts are not free-ﬂoating, their autonomy is limited. And states may increase the number of non-elected bodies having charge of segments of public policy. It is illusory to think that a simple demarcation can be made between redistributive policies which require popular consent, hence must remain national, and non-conﬂicting regulatory policies which could become the attribute of integrated European authorities. The question that needs to be asked in the future is the extent to which a model that combines governmental accord, delegated Community agencies that enjoy partial autonomy, and non-elected, non-accountable authorities that command expanding political ﬁelds is sustainable. When the euro becomes the common currency, when crises originating outside or inside Euroland produce inconsistencies between national governments and the ECB, when the EU has expanded to include the countries of Central and

MONETARY SOVEREIGNTY, DOMESTIC POLICIES

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Eastern Europe without the common body of rules affecting decision being modiﬁed, it will then be more difﬁcult to maintain the division between national policy and European policy and to continue to invoke an external or European constraint. For, in the end, what is meant by ‘economic constraint’ is the inability of our democracies to discuss fundamental political options and to draw the consequences. What is meant also covers the abdication of public élites, who would sooner fabricate a European constraint than carry out the arbitration at national level that the new global economic and geopolitical deal imposes.

Bibliography Aglietta, Michel (1997). Macro-Économie internationale (Paris: Montchrestien). Barro, Robert J., and Gordon, David B. (1983). ‘Rules, Discretion and Reputation in a Model of Monetary Policy’, in Journal of Monetary Economics, 12/1: 101–22. Cohen, Elie (1996). La Tentation hexagonale: La Souveraineté à l'épreuve de la mondialisation (Paris: Fayard). —— (1997). Intervention in Colloque de l'Assemblée Nationale: L'Europe après l'Euro: Stratégies pour la croissance et l'emploi (6 Dec.), published in Les Documents d'information de l'Assemblee Nationale (Paris: Assemblée Nationale). Cukierman, Alex, Webb, Steven, and Neypati, Bilin (1992). The World Bank Economic Review, 6/3: 353–98. Eijfﬁnger, Sylvester, and de Haan, Jakob (1999). The Political Economy of Central Bank Independence (Princeton: Princeton University Press). Elster, Jon (1984). Ulysses and the Sirens, rev. edn. (Cambridge: CUP). Emerson, Michael (1990). ‘Marché unique, monnaie unique: Une évaluation des avantages et des coûts potentiels de la création d'une CEM’, Revue Économique Européenne, 44 (Oct.). Fitoussi, Jean-Paul (1995). Le Débat interdit (Paris: Arlda). Jobert, Bruno and Theret, Bruno (1994). ‘France, la consécration républicaine du néo-libéralisme’, in B. Jobert (ed.), Le Tournant néo-libéral en Europe (Paris: L'Harmattan). Krugman, Paul (1998). The Accidental Theorist (New York: Norton). Kydland, F. and Prescott, E. (1971). ‘Rules rather than Discretion: The Inconsistency of Optimal Plans’, Journal of Political Economy, 85 (June). Majone, Giandomenico (1996). La Communauté européene: Un état régulateur (Paris: Montchrestien). Marsh, David (1992). La Bundesbank aux commandes de l'Europe (Paris and Berlin: Belin). Menudier, H. (ed.) (1993). Le Couple franco-allemand en Europe (Paris: PIA). Muet, Pierre-Alain (1995). ‘Ajustements macro-économiques, stabilisation et coordination en union monétaire’, Revue d'Économie Politique, 105/5 (Sept.–Oct.): 735–77.

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Padoa-Schioppa, T. (1987). Efﬁciency, Stability and Equity: A Strategy for the Evolution of the Economic System of the European Community (Oxford: OUP). Scharpf, Fritz (1997). ‘Européanisation et gouvernement démocratique’, Politiques et management public, 15/1 (March): 11–20. Stone Sweet, Alec, and Caporoso, James (1998). ‘La Cour de Justice et l'intégration européenne’, Revue Française des Sciences Politiques, 48/2: 195–244. Weiler, J. H. H., Haltern, Ulrich R., and Mayer, Franz C. (1995). ‘European Democracy and its Critique’, in J. Hayward (ed.), The Crisis of Representation in Europe (London: Frank Cass). Zysman, John, and Schwartz, Andrew (1998). ‘Unifying Europe in an Emerging World Economy’, Journal of Common Market Studies, 36/3 (Mar.): 391–404.

3 National Squares and European Circle: The Challenge of Adjustment Yves Mény Translated by Iain L. Fraser In 2001, the founding treaty of European integration will expire, since it was signed and ratiﬁed for a period of ﬁfty years. The most obvious pointer to the success of its initial ambitions is the considerable development of both the institutions and the policies set up in order to create a Community, then a Union, of member states. This unprecedented construction fully beneﬁted from the spillover effect expected by its founders in terms of both widening and deepening its functions. At the outset there were extremely limited powers (coal and steel) and a founding core of only six countries. When the ECSC treaty expires, the Union will have, or be about to have, over twenty members, and hardly any area will escape its intervention, in varying ways and degrees obviously, from the most advanced integration down to ﬂexible, diversiﬁed forms of co-operation. Though there has frequently been doubt cast on functionalist positions and, after Maastricht, even assertions that the method that had worked so well for forty years had exhausted its effects, one has to acknowledge that this verdict is undoubtedly too hasty and in any case premature. Not only did Amsterdam move on to partial communitization of the pillars the Maastricht Treaty negotiators wanted speciﬁcally to be ‘intergovernmental’. But we have not yet ﬁnished seeing the cascade effect of creation of the single currency, not just in budget policy but in economic and ﬁscal policy too. If the single currency succeeds, it will be the strongest instrument of integration Europe will have given itself since it embarked on this adventure. Likewise, the move from ﬁfteen to twenty or twenty-ﬁve member states will have decisive effects for institutions and decisionmaking processes. It will certainly be tempting to take the opportunity to strengthen intergovernmentality. But that temptation is doomed to failure, both because of institutional barriers preventing a retreat on this point (the Commission, the Court of Justice, and the European Parliament would all be losers in this game) and

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because of hitherto insurmountable ‘ideological vetoes’ (the ‘acquis communitaire’ being a now unchallengeable hard core). Moreover, the extent of powers already or potentially transferred necessitates a minimum of satisfactory institutional performance on pain of blocking the whole machine, or making it unproductive. Developments with Schengen, or the blockage resulting in certain areas from unanimous voting (accompanied by shameless blackmail by certain states) show that only two possible options exist: establishing a free-trade area (in which case the Brussels institutional apparatus and bureaucracy are useless) or building a union whose operation and success call for a minimum of institutional and procedural prerequisites. In ﬁfty years, the Community, now the Union, has completely changed nature. The idea was to develop limited areas of co-operation as sources of solidarity, thus preventing, it was hoped, the return of European civil wars. The declared objective was in a way negative (to make war impossible), and the means circumscribed. The paradox, though, is that while political integration in the sectors initially concerned, namely coal and steel, was a success, economic integration was almost non-existent: coal and steel remained for long among the most national of economic sectors, whatever be their status, public or private. The ECSC played a major role in the orderly retreat of European coal and the restructuring of iron and steel, but without ever ‘Europeanizing’ these sectors. The EEC's evolution was different since the pace was set both by the political and institutional motor and by the market, especially after ratiﬁcation of the Single Act. The stratiﬁcation of powers since 1958 (EEC, Single Act, Maastricht, Amsterdam, utilization of Article 235 to expand the Communities' sphere of action) has transformed an international organization with limited powers into a Union of a unique type, with missions and involvements that are almost unlimited. To be sure, states have sought recourse to the principle of subsidiarity to dam this ‘creeping expropriation’ of member states' powers, but at the cost of semantic twisting that runs counter to the concept's intrinsic dynamics. The politicians interested in limiting the Union's capacities have interpreted subsidiarity unilaterally i.e. as a synonym for devolution, whereas what it does mean is that powers should be distributed and exercised at the most appropriate levels. Decentralization and centralization are thus both covered by this Janus concept. In a grouping in process of formation, there are many factors pushing for centralization because of needs of information, co-ordination, or control of negative externalities, or quite simply because of the mutual mistrust that often marks relations among member states. Better to have a friendly ‘broker’, albeit centralized, than an autonomous ﬁfteen-player game none can inﬂuence or control. The concept of Europe has radically changed in geographical terms. For more than the ﬁrst decade, it seemed that Europe had ﬁxed frontiers. To the

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south and east, the dictatorships constituted a natural frontier. To the west and north, a free-trade area then established around Britain seemed destined to remain an alternative to continental integration. The ongoing evolution that is tending to make integrated Europe coincide with the traditional deﬁnition of the European continent is burdened with contradictions: how can one create a political identity, a sense of ‘belonging’, with so many countries, cultures, languages, traditions, and interests? An entity whose outlines are less and less deﬁned, so to speak open-ended, becomes a bearer of ever-broader powers and competencies. The gap between community and authority never stops widening. On the one hand are policymaking and policies increasingly aspired to or conditioned by Brussels; on the other, national political systems still concentrate on the main features of political legitimacy and the symbols—more formal than substantial—of sovereignty. While politics are traditionally articulated and organized on a deﬁned territory there is a vast number of sectoral and transnational policies, the scope and extent end up having a greater spatial and ipso facto political impact. This is a built-in contradiction in the Community and Union, destined to grow as powers are deepened and the frontiers (economic, political, social?) of this indeﬁnite, ill-deﬁned space change. The political sphere no longer coincides with that of public policies, and this tension is on course to bring radical changes to national public policy systems. The forerunners of this transformation are in our view only the harbingers of vast upheavals yet to come. Let us consider three dimensions of this change: the emergence of a European agenda, a new division of labour, a redeﬁnition of interests.

The Rising Emergence of a European Agenda The constitution of a European agenda has come about progressively and in a diversiﬁed fashion. Initially, despite the monopoly on initiative held by the Commission, member states kept the upper hand over the Community agenda. This was because, at the outset, integration was essentially negative in kind. The Commission thus controlled the measures aimed at abolishing obstacles and barriers to free movement. By contrast, the essential area of positive integration, namely agriculture, is almost entirely dominated by the main producer countries, in particular France or the Netherlands, whose interests in this area are crucial. Gradually, however, even in the agricultural area, the states have lost control of the agenda. The reasons for this loss of control are many: in a nine-, twelve-, or ﬁfteen-member Europe, no one country can possibly have enough weight to determine the agenda. At best it can convince, at worst it has to try and persuade the other reticent countries that

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thanks to ﬁnancial or other compensations they may ﬁnd side beneﬁts. Second, the need for collective control of negative externalities has had the result of shifting to Brussels many powers that were previously national. This was the case two decades ago for the environment, and is so today for control of immigration or illegal international trafﬁcking. Third, completion of the internal market through the Single Act created a domino effect over which member states have individually lost control. Completing the Common Market required a multitude of cascade measures with effects, whether planned or not, that are practically uncontrollable at national level, save by rearguard actions of a corporate (business) or bureaucratic kind. Such resistance is not without effect in the short term, but generally useless in the medium term, under pressure from the law (Court of Justice), the economy (harmonization through the market), and politics (pressure from other states interested in correct application of Community decisions). It does, however, happen that a state (more rarely a few of them) plays a pilot role in bringing up problems and particularly in deﬁning them. This was the case, for instance, for Britain in the 1980s, which despite its weak European credentials managed considerably to inﬂuence the process of deregulation and privatization of state monopolies. To secure this sort of result, the member state concerned must in general hold, cumulatively or otherwise, several trumps: a policy paradigm capable of becoming dominant (for instance, the monetarist as against the neo-Keynesian paradigm); a comparative advantage consisting in a supply of already tested technical, legal, or other solutions (cf. the adoption of catalytic converters against car pollution under the inﬂuence of Germany); and the capacity to intervene from the ﬁrst stages of drafting, so as to deﬁne the policy frame. Moreover, the Commission and pressure groups have an interest in drawing support from one or several states to push forward policies they hope to promote. But it is important to stress that many states, failing to control an agenda that runs away from them, have had to pay a high price to adapt to the new datum. This is the case daily for countries that prefer to be followers rather than initiators. It is also, to the point of caricature, the case for countries of Eastern Europe applying for membership, who have before anything else to swallow the ‘acquis communautaire’ as a ﬁrst principle. Finally, there is the essentially international/multinational nature of the Community decision-making process: agenda setting has totally novel features by comparison with the classic national agenda. Immigration control policy, for instance, despite the tensions it provokes nationally, is increasingly determined by discussions and negotiations in the Schengen group. Other initiatives, taken at intergovernmental conferences, display all the features of policy through international agreements, that is, secret or conﬁdential agreements formed by élites rather than in response to social movements or the vox

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populi. The same is true of many sectors (agriculture, industry, services) where the agenda results from faits accomplis created by the Commission where it has wide room for manœuvre: the negotiation of commercial agreements (a Commission responsibility), for instance, produces many indirect effects (whether sought for or not) in areas where the Commission has only a secondary or shared role. In a sense, it creates an ‘induced’ agenda that almost totally escapes states' initiative or popular mobilization. Finally, the Community agenda is increasingly inﬂuenced by decisions coming from international or supranational bodies: the Court of Justice, of course, a real European policy-maker, but also the WTO or international agreements under the GATT or international conferences on the environment, etc. The content and patterns of the European agenda are fundamentally different from the modus operandi in classic democratic systems: they are opaque, élite-driven, marked by the multinational component. These differences in agenda setting are highlighted by Vivien Schmidt in paralleling the European Union and the United States: The process of policy formulation in the EU avoids not only the politics of money increasingly evident in the United States but also to a large extent the politics of a party. The EU is a good deal less affected by partisan politics than the US, given that apolitical EU civil servants, rather than partisan legislators and their staffs, are the primary drafters of legislation, and that the EU parliament, where parties are in any case not highly consolidated, plays a minor role as co-decision maker and consultative body. Moreover, the EU Commission's decision-making culture, which puts the most value on decisions taken primarily on technical and economic arguments, enables the Commission to maintain its legitimacy while denying undue political inﬂuence to any individual country or its nationals. (Schmidt, 1999) Agenda setting in the EU is much more complex, tortuous, diversiﬁed, and unpredictable than at the national level, simply because of the constitutive elements of Europe. The diversity of opinions, cultures and ‘paradigms’ is in fact much greater than in member states, which are further generally polarized in terms of both social cleavage and around political organizations or programmes. At a European level, neither history nor common traditions nor even transnational groups or parties are capable of offering a coherent (and simplifying) interpretation of the issues. The confrontation of preferences and options is by deﬁnition more pluralist or, putting it differently, more confused. Moreover, with but few exceptions (the most notable one being agriculture), social mobilization associated with setting the agenda remains marginal, and most often the European agenda is separate from popular mobilizations and movements. At best, national governments take more or less abusive advantage of the (supposed or real) threat this or that social group might bring to bear in the event of EU action (or inaction). Moreover, the multiplicity of institutional actors involved in agenda setting

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(Commission, Council, Parliament, European Council, national governments) lends the process a tonality and patterns that are thoroughly different from those prevailing at national level: political institutions have primacy over groups and parties within the electorate; agenda setting is highly formalized, often slow and generally accessible to initiates alone. Through informal meetings at summits, a problem ends by emerging onto the agenda, via the convoluted pathways of internal reports or commissions of experts, votes, and resolutions, or surreptitious entry through an elusive reference or the use of a key term. Except in dramatic cases (like ‘mad-cow disease’), the agenda is set mainly through discreet battles among experts, even if the most vociferous support is mobilized for the occasion involving pressure groups, the media, and national political parties. But although this system is more closed to social actors than most national systems, it has forms of openness generally unknown at member state level. Nowhere but in the European Union are there institutions whose components have such diversiﬁed initial interests and viewpoints: the European ‘government’ is formed from a ‘coalition’ of at least ﬁfteen ‘parties’ (the national governments), themselves fragmented and divided according to ideological, national, or sectoral faultlines. There is no single council of ministers, but a multiplicity of specialized councils whose original feature is to organize a spatial confrontation rather than the inter-sectoral one. Summarizing, the European political agenda is essentially deﬁned in complete contrast with the typical features of national agendas: more subject to the ins and outs of the machinery than to outside pressure or demand from public opinion; more conditioned by manifold veto issues; more decoupled from electoral rhythms and partisan political issues; more ignored—though things are changing—by the press and broadcast media. In other words, the European agenda is no longer that of an international conference preparing adoption of a treaty, but not yet that of a democracy where the regular rhythms of the institutional agenda combine with the unpredicted and the imponderables of the dayto-day agenda constructed through the action, combined or otherwise, of social movements, speciﬁc interests, and political movers and shakers.

A New Division of Labour The construction of the Communities, later the European Union, affected the policy process along various dimensions: functionally, by separating powers transferred to Brussels from those remaining with member states; territorially, by clearly separating decision-making (in most cases belonging exclusively to member states) from the interest viewpoints involved, through the

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creation of new modes of consultation and participation that have short-circuited traditional networks. These changes were present from the beginnings of the European institutions, and both supporters and critics of integration clearly saw their implications, regarded as beneﬁcial or harmful according to the political approaches of these actors or observers. However, it was only gradually that the impact of these transformations was felt by national bureaucracies or political institutions, or generally by public opinion. A particularly sensitive crossover point came with adoption of the Single Act (which implied completion of the single market and the introduction of several hundred directives) and the ratiﬁcation of the Maastricht Treaty, loaded with changes, both substantive and symbolic, in such sensitive areas as currency, justice and home affairs, defence and security—this provided a suitable opportunity for mobilizing public opinion in the various states, in particular where referendums were held.

The Functional Dimension The functional shift in powers between member states and the European institutions brought a series of cascade effects. It led ﬁrst to a progressive but continuous transfer of powers to the beneﬁt of the Brussels bodies and the detriment of national institutions: it shifted the equilibria reached among the various branches of government, and more recently it has contributed to altering relations between central national institutions and local government bodies. The transfer of powers from the national capitals to Brussels has followed a process marked by blockages followed by sharp accelerations, a sort of ‘stop and go’ applied to politics. Despite some hesitations, this evolution has never stopped, since it has always found staging posts to go onward, even when the member states were the most reserved regarding continuation of the enterprise. Sometimes, as Joseph Weiler (1982) has brilliantly shown, it was the Court of Justice, sometimes the Parliament in the name of making up the democratic deﬁcit, sometimes a motley coalition of neo-liberals (Thatcher), dirigistes (Mitterrand), and integrationists (Delors, Kohl), sometimes the need to open up new fronts in order to accommodate newcomers and ‘buy’ their consensus (regional policies), and sometimes the spillover effect hoped for by the founding fathers (environment, frontier controls, currency, etc.). Despite the protests of one side or the other, despite the invocation of subsidiarity, the invisible hand of the market, the entrainment of legal machinery, the functionality of a central co-ordination and harmonization agency to such a vast and still heterogeneous economic combination, all contributed to maintaining the impetus and one-way advance in the direction of growing Brussels interventionism. This trend is additionally sustained by the very nature of the transferred powers, which are mainly regulatory and marginally redistributive in nature.

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Several consequences derive from this choice. The ‘conﬁnement’ of Community action to the ﬁeld of regulatory policies invests the Brussels institutions with a crucial role, which is not only substantive but also symbolic. The traditional division of the political process between decision-making and implementation privileges an élite which thinks and decides over and above the indistinct mass of subordinates or civil servants: the policy-makers prevail over the implementers. The noble part of political work thus seems to have been elevated to the Commission or the Council of Ministers, to the detriment of the nation states, which, however, are no longer so willing to accept this loss of inﬂuence. Whatever the reality, the dominant perception at national level (both in parliament and in public administration) is that nowadays national institutions are heavily constrained. The exercise of regulatory power is made all the more possible by the fact that—in contrast to redistributive policies— it does not encounter budgetary limitations. For regulation hardly costs any more than the spending required for the functioning of the service and the publication of decisions. Regulatory decisions, in essence, are carried by the Ofﬁcial Journals of the EU and other administrative bulletins. From then on, the costs and expenses are externalized on to other actors: national public institutions generally, but above all economic actors and consumers. These have to transform a legal decision into concrete public policy. The examples of this are legion, but one will sufﬁce. When the Community announced a number of norms concerning atmospheric pollution and imposed the catalytic converter on cars to reduce emissions of toxic gases, it not only externalized the implementation of this policy but also imposed all the costs on the car industry and, ultimately, consumers. The budgetary impact on the Community of a policy that convulsed an entire industry and redistributed beneﬁts and costs among the actors involved was practically nil. This is something which Laura Cram (1993) has aptly labelled ‘calling the tune without paying the piper’. The fact that regulatory policies are increasingly devised in Brussels profoundly transforms the process of decisionmaking and, in consequence, the way in which interests are structured. The search for the harmonization of rules within a community of states with disparate traditions and policies is an inexhaustible source of work for the Brussels regulatory machine. But since the legal harmonization of rules has turned out to be almost impossible, the Single Act has taken up the principle of jurisprudence adopted by the Court of Justice in the famous ‘Cassis de Dijon’ case—the principle that any product circulating freely in one of the producing states must be accepted in all the member states. By sweeping away the jungle of protectionist regulation, the Court of Justice shifted the onus of regulation to Community level. The autonomy apparently given back to each national system (each may regulate as it wishes, provided that its rules are not in conﬂict with the principles and

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regulations of the Community, and provided that products and services are able to circulate freely) has created such problems for economic agents that they have become the most proactive lobbyists for European regulation, thereby seeking to remove the uncertainties of fragmented markets or discordant national regulations. Thus, the development of regulatory policies is not simply a by-product of bureaucratic expansionism. That said, the ﬂow of regulations from the Commission remains impressive. The central role of the Commission in the development of Community policies (in principle, the Commission has a monopoly of the ‘supply’ side) does not derive exclusively from the institutional arrangements in Brussels. In fact, the pressure of demand for common regulations places the Commission at the centre of the game, strengthens its position, and reinforces its legitimacy—at least in the eyes of political élites and groups who see in the Commission a solution to their problems. (This is not to say that there are no costs attached to this ‘centrality’: notably the risk of being made a scapegoat by groups which lose their niche or their comparative advantage, or by governments only too happy to pass the blame for unpopular policies on to a technocratic authority.) Community institutions in general, and the Commission in particular, play the role of a clearinghouse, where economic, political, and social actors and interests converge. This frame of action has challenged many national practices, disturbing not only certain privileged links between economic sectors and their bureaucratic interlocutors, but equally traditional modes of national regulation (industrial policies, public services, etc.). This complex, and often unpredictable, game not only upsets the rules. It also introduces new principles and categories (‘subsidiarity’, ‘proportionality’, ‘good faith’), modiﬁes politico-administrative cultures (for example, the expansion of the role of the judge over that of the technocrat), and sometimes breaks with deep-rooted tradition and practice by dismantling solidly established policy communities. In other words, this regulatory policy-making framework not only creates competition over rule-making between political and economic actors from different states, it also provides an ideal opportunity for actors to seek to impose measures that best suit the interests, practices, and habits of the sector or country they represent. The choice of the catalytic converter as an answer to car pollution was not just a technical solution. It also represented the victory of German industry, which was best prepared to respond to the needs of the new market. In addition, negotiations in Brussels offer new opportunities to certain interests otherwise marginalized in national decision-making. Numerous interests (in the environment ﬁeld, for example) are, paradoxically, represented better in Brussels than in their national capitals. Thus, in the never-ending conﬂict over rules, mastering the processes of Community decision-making becomes essential. Often, the most effective results are

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achieved through controlling the initial stages of the development of a policy: reports, commissions, and working groups thus become crucial venues for deﬁning the nature of the problem to be addressed and the range of solutions to be favoured. By the time the dossier reaches the political level, it is often too late to change course. By that stage, the choice is often between acceptance and veto—if the latter is still a viable option. It is obvious that this strategy has both beneﬁts and costs. The advantages accrue to those leading countries which succeed in convincing the Community institutions and public opinion that their options or solutions are the best: the British, although they are isolated in certain sectors, have displayed great skill at this. Not only is their ‘Community professionalism’ recognized by everyone, but, what is more, the strategic choices that they have made in the past—privatization, deregulation, the opening of markets—have begun to appear more attractive to the Eurocrats and to their partners. It has been too often forgotten that ‘policies’ are also—perhaps above all—words and ideas, and, as Majone reminds us, these play a crucial role in the creation of political reality and the decisions that are made. When France, by contrast, seeks to protect the interests of Air France or Air Inter as far as it possibly can, it becomes the target of harsh criticism from numerous countries and even more numerous airlines. The idea of a national airline as a public-service commitment to air travel is apparently no longer accepted. In this policy area, France had to renounce the ambition of imposing its convictions upon its partners. To be sure, this is not a one-way game, and each partner can be both leader and follower in turn. But it means that, far from being controlled by a permanently dominant player (in the way that can sometimes happen at national level), the game is ﬂuid, unstable, and often unpredictable.

The Territorial Dimension The territorial dimension of this new division of labour is also crucial. All the States, whether federal or unitary, organize a more or less rigid distribution of tasks at a territorial level: powers reserved or shared between federal government and federated states; distribution of powers hierarchically or through decentralization in unitary states. The implementing tasks may be shared along the same lines as decision-making powers (as in the USA) or allotted to the federated authorities (as in Germany), devolved to local authorities (Britain), or distributed according to complex formulae between the government's outside services and local authorities (France). Almost everywhere, however, the formal distribution of powers gives way to compromise formulae, to collaboration, to joint tasks, to criss-cross ﬁnancing. This development, which began in the federal states (co-operative federalism), became generalized almost everywhere, with the notable exception of

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Britain under Thatcher, where a wide gap between (central) decision-makers and (local) executants never ceased to widen under the rod of a government determined to tame the local authorities. Nowhere, though, not even in Britain, is the gap between decision-making and implementation levels so marked as between the Union and the member states. In broad outline it might be suggested that the Union decides and the member states have to implement. To be sure, the implementing states take part in the collective decision, but their individual positions vary considerably: between rich and poor states, between states with solid bureaucracies and the others, between pioneering states that have already anticipated the bulk of the measures or are technically ready and states with the greatest difﬁculty in adjusting. The rule is held to be uniform, but the ﬁelds of application are considerably heterogeneous. Moreover, the Commission is in the main at the mercy of the goodwill of states, since it has practically no means of effective coercion at its disposal. It can, certainly, base itself on recourse to the Court of Justice, but implementing the decisions of the Luxembourg judges is itself subject to the goodwill of national authorities. Head-on refusals to implement are rare, but not unknown (cf. the recent infringement of the Migratory Birds Directive by the French parliament, with the benevolent complicity of the government, which refused to use the many means available to prevent adoption of the law). But refusals through inaction are numberless, be it in terms of aid, of respect for competition rules, of environment protection. Sometimes, the rules are systematically misused or circumvented, especially where ﬁnancial beneﬁts result (agriculture, structural funds). The fact that decision and implementation are almost entirely disassociated raises a multiplicity of problems: objective difﬁculties of application resulting both from protest by the actors involved (voice) and the temptation to dodge the rule (exit); temptation for states to throw all blame for unpopular decisions onto the ‘Brussels bureaucrats’, though adopted by the Council; tendency of an often poorly informed—or disinformed by national political and economic élites—public opinion to see European decisions as anonymous, remote, overly complicated rules inattentive to real problems, in short, as inapplicable. The fact that there are no possibilities of amending the rules regarded as inadequate by those involved except after long years of effort contributes to rigidifying relations between Brussels and public opinion and to nourishing a sense of frustration and misunderstanding. Is it not, for instance, paradoxical that French farmers, the great beneﬁciaries of the CAP, have been among those most critical of European institutions? Or that hunters in certain countries have organized into protesting parties out of rejection of European directives and lack of power to correct them by intervening in the policy process?

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This gap between decisional process and implementation is particularly sensitive in federal states, where the component entities (Länder in Germany, Comunidades Autónomas in Spain, regions in Belgium, etc.) generally responsible for applying many public policies have de jure or de facto secured effective participation in the national decision-making process. Any transfer of powers to Brussels affects them directly, since, while remaining responsible for implementation, the regions become excluded from the decision-making process. However, by contrast with national parliaments which, with the notable exception of the Danish Folketing, have let themselves, almost without reacting, be stripped of their powers in favour of the European bodies and national executives, the regions have been able to proﬁt from their position in the political system or exploit favourable political opportunities (ratiﬁcation of the Maastricht Treaty) to seek to regain lost powers or capacities for inﬂuence. A recent study, in course of publication, shows how this process of damming then reconquest has been easier where co-operation between federal and federated authorities was strongest (Germany). By contrast, where—as in Spain, for instance—regions had adopted a policy of confrontation rather than collaboration vis-à-vis central government, the expropriation of powers ended by being easier and more radical (Boerzel, 1999). And it was only with ‘co-operative’ transformation of these relations that the Spanish infranational authorities were able to start the effective reconquest of their lost powers. It was by bringing themselves back into the pre-Community negotiation and adjustment process (in which national positions are elaborated) that the autonomous communities—or at least the most active and dynamic of them—managed to regain an inﬂuence that the previous lack of dialogue had almost eliminated.

Redenition of Interests Any public policy mobilizes and brings into play interests that are positively or negatively affected by the decisions taken. But over and above the speciﬁc measures contained in the policy in question, whether to conﬁrm or to invalidate and change the status quo, a paradigm must be deﬁned around which the actors involved can array their actions and claim them as useful, necessary, and legitimate. European public policies bring in radical upheavals in this connection: most interest groups—with a few exceptions—are little or poorly structured in relation to the European bodies. A gap is less liable to arise between the policy decided and the groups concerned, which are still much more fragmented and divided than in the national political space. Moreover, while groups and the public authorities

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contribute through their interaction to building the common and dominant ‘reference framework’ needed for the success of any public policy, this is not so at European level where the dominant paradigms underlying the Community decisions may be at odds with the both diversiﬁed and contradictory views of national actors. The interest groups thus face a total challenge: of adjusting to the new decisional structures, though everywhere they have been created and shaped by adapting to national institutions and processes; and of revising the bodies of ideas, beliefs, and myths that ground their action within and vis-à-vis the state as well as in relation to other groups. As Stefano Bartolini stresses, in an unpublished paper: As historically the rise of the State is associated with a shift in the nature and direction of collective action, normally implying its transformation (from localized to centralized, from spontaneous to planned, from reactive to proactive, from ephemeral to enduring), so the development of the European Union (and the corresponding assumed decline of the nation State as seat of central power) may produce changes in the forms of mass political action. Though we do not have enough empirical studies available to measure the impact on interest groups of the emergence and growth of the European level, and though it is not always easy to distinguish the inﬂuence of globalization from that of European regional integration, it is already possible to highlight a number of trends: 1. The distribution of the cards between winners and losers is changed at several levels: sectoral (protected producers versus producers open to the world market); territorial (between states or within states); according to their organization (élite or mass), their institutionalization (relations with the state), and their methods of action (participation/violence). 2. The relation between Brussels and the groups is marked by imperfect pluralism. The corporatism often dominant in many states loses its points of reference and its means of action at European level. The privileged relation between the state and certain groups is most often replaced by a much more competitive relation, if only because of its multinational nature. Let us, for instance, consider the carmakers, often in monopoly or duopoly position on each national producer market. In Brussels, the dialogue attracts a dozen European manufacturers, with some states heavily involved and other ones indifferent or hostile to any system of favours, and ﬁnally representatives of non-European manufacturers who have more open access and a more diversiﬁed scene than at national level. Yet this pluralism remains imperfect, since the less well-organized, less powerful, or less rich groups are often even more marginalized than at national level, and cannot make up for their access deﬁcit by mobilizing their members at elections.

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3. This situation often surreptitiously leads to a shift in the meaning, and ipso facto a change in the role, of the nation state. Since EU policies are developed in a sort of vast bargaining among states on all sorts of issues, an assimilation between national interest and national interest groups involved becomes an almost natural inclination. Turning to cars again, Italy's national interest is quickly assimilated to that of Fiat's, France's to that of Renault/Peugeot, etc. Whereas it is illegitimate for the nation state to identify with one group when it comes to internal policy, nothing at European level prevents government representatives from speaking and acting on behalf of a particular group or industry. On the contrary, the expectations of public opinion and the parties go in the direction of an identiﬁcation between speciﬁc interests and the national interest. 4. Because of the change in issues, Europeanization produces simultaneous coagulation and dispersion effects on interest groups. Transnational sectoral coagulation, sometimes institutionalized (UNICE, etc.), sometimes oneoff (mobilization of social groups); appearance of unprecedented forms of institutional interest groups (associations of regions, of towns, etc.); destructuring of national coalitions (exporters/importers; leading ﬁrms/ declining ﬁrms). Alliances and breakups are obviously contingent and fragile. The poor regions may coalesce to get the most from Brussels, but have to split up again to divide the spoils. 5. The European level thus constitutes a new opportunity structure for the groups that have no easy access to or are in disagreement with the national authorities. The most active and most mobile groups can use the consultation and participation channels offered by the Commission, haunt the corridors of Brussels ofﬁces or of the Parliament, submit memorandums, have their eyes and ears in Brussels, invoke the Court of Justice and beneﬁt from case-law that often upsets well-established national principles, protective practices, and established interests (cf. deregulation of the price of petrol in France, free movement of footballers, the Cassis de Dijon case-law). The conclusion that may be drawn from the rare studies in existence is that the groups in fact have an unequal capacity to take advantage of the new opportunities on offer. As regards gender non-discrimination among workers, for instance, Sabrina Tesoka (1998) was able to bring out the extreme diversiﬁcation in use of the legal instruments available by groups concerned in France, Germany, and the UK. 6. The nature and forms of methods of action have also been radically changed. Groups' repertoires of action tend to change, unless the point is to bring pressure on the national government in traditional ways in order to get it in turn to put pressure on the supranational institutions. In this case, classic forms like mass protest and violence may still be part of the action repertoire (cf. the dialectic between farmers and the agriculture ministry in France

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during the agricultural marathons). By contrast, groups' forms of action vis-à-vis the Brussels bodies are much more closely related to classic American-style lobbying. And the big Anglo-Saxon ﬁrms of consultants and lawyers play a preponderant part in it. The supply of information to the authorities in charge of the matter, the preparation of notes, memorandums, dossiers, and legal arguments constitute the daily bread of this new type of pressure. Recourse to the national or Community judge is an additional form of this legal and procedural lobbying. These practices do not of course prevent subtle forms of clientelism and of favoured access ‘à l'européenne’. National solidarities, enmities, or antagonisms are sometimes stronger than the procedures set up to hinder biased choices. Despite their exacting formalism, the tendering procedures only partially prevent the creation of Brussels-style ‘steel triangles’. And of course in Brussels, as in the European capitals, privileged relations between groups and the administrations that are their interlocutors are not unknown. 7. Last but not least, the paradigms within which public policies move have a profound inﬂuence on groups' action and on their legitimation vis-à-vis the public authorities and opinion in general. Consider, for instance, the notion of public service in France, which allows the justiﬁcation and maintenance of speciﬁc forms of public action: monopoly, nationalization, equality of treatment, public status of staff, and state subsidies constitute the repertoire that permits the perpetuation of certain groups and the stability of their relations with the state and society. By perturbing this stable—though different from one state to another—environment, the European institutions bring in a ferment of change, indeed of upheaval: how can one, for instance, reconcile the principles or values just stated with such new paradigms as the market, competitiveness, free competition, proﬁt, ﬂexibility? Destabilized by the obsolescence of the old paradigms or the challenges to them, the groups that lived, acted, and were structured in terms of them are faced with radical choices: oppose or adjust, survive or decline. The panorama of the groups in Europe in the last twenty years is eloquent: under the twofold inﬂuence of European integration and neo-liberal globalization, most of the constituted groups in the democratic systems have been thoroughly shaken up, starting with the most powerful of them, the trade unions.

Conclusion The Europeanization of national political systems comes about through a twofold movement. On the one hand, a deliberate, political choice to opt for regional integration in the name of values that have evolved over time (the search for peace, for growth, the costs resulting from not belonging to the

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club). That is the ‘vorrei’ of the enterprise i.e., the deliberate option for integration. But in the sidelines of this choice, Europeanization continues its own movement, starting from a dynamic deliberately set going by the member states but often now out of their control. Because she wanted to strengthen market liberalization, Margaret Thatcher was forced to accept more integration. Because he wanted to strengthen the European construction, Mitterrand had to swallow the bitter pill of the market. On the other ‘non vorrei’, reluctant acceptance of Europeanization, may be expressed in manifold ways: through safeguard clauses, derogations in space or time, resistance to implementing decisions, optingout solutions. However, with all the hesitations, climb-downs, and postponements we are familiar with, the process does not cease to advance without being controlled by those who claim to be steering the ship. And that is where the shoe pinches. Even if politics and policies have rarely followed fully parallel routes, never has the gap between decisional processes and democratic legitimation at national level and policies de facto pursued been so great. In some respects, the situation of Europe recalls that of the nation states in the nineteenth century and the ﬁrst half of the twentieth. The legitimacy of government could be established only thanks to the widening of suffrage (formal legitimation) and the construction of the welfare state (substantive legitimation). Today in Europe the procedures and measures to enable the move from élite government without the people to that of élites legitimated by the European peoples have still to be invented (Hayward 1996). The challenge is large since no one has yet managed to ﬁnd the modus operandi for a European democratic system that would not be an—ill-adjusted—copy of the model of national democratic government.

References Boerzel, T. (1999). ‘The Domestic Impact of Europe: Institutional Adaptation in Germany and Spain’, doctoral thesis in political science, Florence, EUI. Cram, Laura (1993). ‘Calling the Tune Without Paying the Piper? Social Policy Regulation: The Role of Community Social Policy’, Policy and Politics, 21/2: 135–46. Hayward, J. (ed.) (1996). Elitism, Populism and European Politics (Oxford: OUP). Héritier, A. (1996). ‘The Accommodation of Diversity in European Policy-Making and its Outcomes: Regulatory Policy as a Patchwork’, Journal of European Public Policy, 3/2: 149–67. —— (1997). ‘Policy-Making by Subterfuge: Interest Accommodation, Innovation and Substitute Democratic Legitimation in Europe—Perspectives from Distinctive Policy Areas’, Journal of European Public Policy, 4/2: 171–89. ——Knill, C., and Mingers, S. (1996). Ringing the Changes in Europe: Regulatory Competition and the Transformation of the State. Britain, France, Germany (Berlin: De Gruyter).

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Hooghe, L. (ed.) (1996). Cohesion Policy and European Integration: Building Multi—Level Governance (Oxford: OUP). Majone, G. (1996). Regulating Europe (London: Routledge). Mény, Y., Muller, P., and Quermonne, J. L. (1996). Adjusting to Europe: The Impact of the European Union on National Institutions and Policies (London: Routledge). Sbragia, A. M. (ed.) (1992). Euro-Politics: Institutions and Policy-Making in the ‘New’ European Community (Washington, DC, Brookings Institution). Scharpf, F.W. (1997). Games Real Actors Play: Actor-Centered Institutionalism in Policy Research (Boulder, Colo.: Westview). Schmidt, Vivien (1999). ‘National Patterns of Government under Siege: The Impact of European Integration’, in Beate Kohler-Koch and Rainer Eising (eds.), The Transformation of Governance in the European Union (London: Routledge). Tesoka, Sabrina (1998). ‘A Public Policy by Default? Judicial Activism in the “Community Social Space”: The Case of Sex Equality’, Ph.D. thesis, European University Institute, Florence. Wallace, H. and Wallace, W. (eds.) (1996). Policy-Making in the European Union, 3rd edn. (Oxford: OUP). Weiler, Joseph (1982). ‘Supranational Law and the Supranational System: Legal Structure and Political Process in the European Community’, Ph.D. thesis, European University Institute, Florence.

4 State, Europe, and Republic Pierre Grémion ‘If I had to start again, I'd start with culture’: this phrase, attributed to Jean Monnet, has been used on countless occasions in speeches by French ministers. Revealingly, Monnet in fact never uttered it at all. Yet, the very ease with which this apocryphal remark could be propagated in France by a section of the politico-administrative élite says a great deal about the relationship France has with the European Union.7 Doubtless, present circumstances encourage one to wonder what Monnet might have had to say on the link between the nation and globalization, but this is not the course I intend to follow. What is of concern here is the relationship between State, Europe, and Republic which is, year by year, becoming increasingly blurred. Each represents a tangled network of powers. But, beyond this, State, Europe, and Republic represent contradictory symbolic sources of authority. And at this dual level, of power and of symbol, a form of telescoping occurs that results in the space occupied by public institutions becoming increasingly hard to decipher. In an attempt to ﬁnd our bearings in this maze, we shall be retracing the two paths—endogenous, and liberal and European—taken by modernization in post-war France. Doing so will enable us to tease out the interrelationships between these three sources of authority over almost half a century.

The Modernizing Forward-Looking State The pressing need for modernization in France had its source in the defeat of 1940. If the Second World War can be seen as a quasi-civil war, post-war modernization visualized in the context of national recovery and wholly directed to overcoming the causes of defeat was carried into effect through channels that traverse Vichy as much as the various resistance movements

7

The ﬁrst serious study of Monnet was published in Britain ﬁfteen years after his death (Duchêne 1994).

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(Crémieux-Brilhac 1990). In the course of this process, the state acquired a number of new internal features and developed certain speciﬁc links with society. Social modernization was urged on society by a forward-looking, anticipatory state. The senior civil service itself played an essential anticipatory role on three levels. First, on the conceptual level, it unreservedly adopted a Keynesian strategy (Rosanvallon 1989). On an institutional level, it created a whole range of instruments designed to improve its economic and social expertise, with a view to being better able to guide the modernization process. Thirdly, the ethical dimension of this model cannot be underestimated. In the postwar, modernizing French state, serving the state meant little else than serving the cause of social reform. This was the inspiration behind the creation of the École Nationale d'Administration (ENA). This reforming ethic acted as a unifying factor for a new generation of senior civil servants and provided them with a speciﬁc élite identity. At the same time, the reformatory mission served to deﬁne a relationship between the administrative élite and society. The senior civil service was not so much subject to the whims of government or social structures but, rather, devoted signiﬁcant attention to fostering the emergence of new actors and new powers. With regard to society, modernization was not effected by major institutions but by small activist minority networks working in a conspiratorial way (Shonﬁeld 1969) with the state. Such collective action, which comprised a number of militants, also contained a strong élitist element. The link between the forward-looking state and these minority élites took shape round the ‘Plan’, the meeting-point of the participants in the conspiracy to modernize both state and society. At that time, the Commissariat Général du Plan and its offshoots constituted a sort of alternative university for public policy-making, equidistant between the administrative machine and parliament (Hayward 1974). A mixed economy system was set up which in turn gradually brought about the social-democratization of society. It is one of the paradoxes of post-war France that it fell to the state to bring into being a social-democratic society, since there was no political party capable of realizing such an ambitious project. Following the war, the French Communist Party emerged from a ten-year period of persecution to claim its place as one of the foremost political forces at the Liberation. Its socialist adversary, however, was politically downgraded (as well as handicapped by a strong paciﬁst tradition that had induced a number of its members actively to collaborate) and in no position to provide creative leadership. Modernization, social-democratization, national recovery—if the three dimensions went hand in hand, far and away the most important was national recovery. The wave of modernization in post-war France was an important function of a determination to restore a nationalism that was rational and subject to reason, so as to avoid succumbing to the nationalist

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diseases of the 1930s and break free of any internecine conﬂict pitting Frenchman against Frenchman. The relation of the modernizing party (that ran across both state and society) to politics was achieved through two exceptional individuals, Pierre Mendès France and Charles de Gaulle. They simultaneously gave expression to their remoteness from political activity as such and incarnated the political will and determination essential to the administrative élite. In this respect, there was really no hiatus between the Fourth and the Fifth Republics. The extension under the Fifth Republic of systems that had been reinforced by Mendesian initiatives privileged the forward-looking role of the higher administration, of planning, and of encouragement for the dynamic elements in society.8

The Common Market and the Development of Economic Liberalism If the model of endogenous modernization and the role played by the state are now well-documented, perceptions of evolving relations between French society, its élites, and European institutions remain hazy. The construction of Europe operated through treaties, and it was not customary in diplomatic analyses to take account of the social implications of the creation of international institutions. Yet this was precisely the crucial aspect of the process of Europeanization. The critical phase occurred between the rejection of the Paris Treaty by the French parliament in 1954 and the signing of the Treaty of Rome in 1957. The draft proposal for a European Defence Community, set off, in Raymond Aron's words, the ‘ﬁercest ideological and political quarrel seen in France since the Dreyfus affair’ (Aron 1955: 19). The outcome of the conﬂict left French élites exhausted, and the pro-European alliance utterly defeated. Unlike those in Germany and Italy, pro-European movements in France were weak and had achieved little penetration within French society. Furthermore, they met with determined opposition from the intelligentsia. The absence of an ideational base for federalist ideas was due in part to their apparent contradiction of the notion of the one and indivisible Republic (Hayward 1983). It also owed much to the fact that France was preoccupied with attempting to transform its empire into a French Union. It was this project, rather than the European one, which absorbed what few federalist ideas existed. The Rome Treaty provided a boost for europhiles in France. This development of a ‘second Europe’, at once more economic, more pragmatic, and more liberal, must be interpreted in the light of speciﬁc internal conditions within France. It emerged just as France was becoming almost exclusively

8

For the period between 1958 and 1968, Pierre Mendès France remains an essential political reference.

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preoccupied with the Algerian question which marked a deﬁning moment in the post-war process of decolonization.9 During this period of mounting extremism, the Common Market quietly established itself without public opinion really even noticing. A crucial player in the revival of integration was Paul-Henri Spaak, the socialist Belgian Foreign Minister, selected for the task largely because of a widespread belief that, following the EDC débâcle, it would be ill-advised to appoint a French or German candidate. Quite apart from his European credentials,10 Spaak was a key ﬁgure in the promotion of American policy in Europe. In France, European integration became the responsibility of a government led by a socialist, Guy Mollet, within which, for the ﬁrst time under the Fourth Republic, a socialist, Christian Pineau, held the portfolio for Foreign Affairs. Pineau has left a scrupulous account of how France negotiated the Rome Treaty (Pineau and Rimbaud 1991). The swift departure of Mendès France from the Front Républicain government certainly made things a lot easier, since he was the object of considerable hostility on the part of Spaak, whereas Spaak's relations with Pineau were extremely warm. The two were frequently seen together in private conversation. By completely shortcircuiting the ministry and choosing to rely on Mollet, the Prime Minister, and the Belgian Foreign Minister, Pineau was able to manœuvre the Treaty through the parliament. Thereafter, the details of the Common Market were left to experts who carried out their work amidst a general lack of public interest in the undertaking (Pratt 1991: 53–5). Few people in France at that time believed the Common Market had much of a future. Furthermore, once the Treaty had been signed, the Commission acquired a status vis-à-vis states rather than societies. The experts' principal task was to apply the required polishing and search for unwarranted subsidies. Nevertheless, the opening up of the French economy via the Common Market contained a latent contradiction with the endogenous model of modernization. Not only did the removal of trade barriers inhibit the state's proactive role, but the philosophy that underlay this new Europe was derived from the German social market economy, which was unknown in and alien to France. Hence, behind the creation of the Common Market lay a German concept that put the élites of endogenous modernization at a disadvantage. The contrast between the two countries is striking when one compares the post-war impact of Keynesian ideas (Allen 1989). Their relative lack of

9

The conﬂict not only put an end to hopes for the Union française, but gave birth to a furiously anti-European movement in favour of the Third World, well represented by Sartre who rapidly took on an emblematic role in this respect.

10

Spaak was Foreign Minister of the Belgian government in exile in London during the war and was instrumental in setting up the ﬁrst customs union, Benelux. Active in the pro-European movement, he became the ﬁrst president of the Consultative Assembly of the Council of Europe in 1949.

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signiﬁcance in Germany was linked to a number of basic factors, some dating from before the Second World War and some from after. Following twelve years of national socialism, both élites and public opinion in Germany evinced considerable hostility towards the notion of state intervention. It is true that after the Second World War, Germany experienced a phase of economic interventionism, but this was conducted by the Allied powers, which explains its rejection when the occupation was over. The concept of the social market economy accorded well with the Bismarckian tradition of social insurance, whilst the organizational capability of German industry enabled it to develop modes of informal co-operation independently of the state. Further, the new Federal Republic put monetary policy—and with it, a central institution, the Bundesbank—at the heart of national reconstruction. In addition to this, the modernization process set in motion by the policy of liberalization in Europe reﬂected one of the major thrusts of American policy in Europe, so introducing yet another disparity with the endogenous model of state-driven modernization characteristic of France. When the war was over, American aid went hand in hand with the project of creating a vast European market (the USA was insistent that there should be no return to cartelization in Europe). It was the Marshall Plan which gave substance to the First Plan for modernizing infrastructure, its adoption by France being at the cost of two foreign policy objectives: the destruction of the German economy and cooperation between East and West Europe. At the level of Europe the Marshall Plan provided a dose of realism in place of more nebulous European schemes. But the Marshall Plan could no more be acknowledged by the modernizing state than could European federalism be assimilated by the Republic. So it is the abiding refusal to accept the contribution made by American aid to French recovery that is one of the essential constituents of the endogenous model for modernization in the post-war period. And this denial endures: for the ﬁftieth anniversary of the Marshall Plan there was no Frenchman present at the ceremony organized by Harvard University; nor was any book, nor signiﬁcant political or historical article, published in France to mark the occasion. There is even a place for Jean Monnet in this picture. Monnet was a man who built his entire career while disregarding Paris, the politico-administrative centre of the nation, and dealing directly ﬁrst with London, then with Washington. The means he employed in wielding the inﬂuence he did stood in stark contrast to those used collectively in France. His friendships and his references were sought out before the war in the milieu of American bankers and senior lawyers, the very ones who, after the war, formed the political establishment of wise men whose responsibility it was to implement Washington's policy for Europe. Monnet shared their concern that the mistakes of the Treaty of Versailles should not be repeated. His constant stance in negotiation

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was at the intersection of the public and the private sectors. With him the experience of business negotiation and the interplay of interests took precedence over the kinds of public action characteristic of France. If one interprets his supposed remarks on culture in this light, they can easily be seen as a kind of childish window dressing for an approach to European integration that was so clearly foreign to the French frame of mind. The ﬁnal paradox is that the Common Market, which was instrumental in the removal of trade barriers, was launched by a socialist government. The SFIO, the central party of the Fourth Republic, passed on to the state the onus for realizing a measure of social-democratization in society. For the socialists, European construction was primarily a response to the requirements of the struggle against the communists. In France the Common Market got off the ground when the Fourth Republic gave way to the Fifth. In Germany its start coincided with the SOP Congress at Bad Godesberg and the party's modernization. But in France, the Socialist Party held to its revolutionary determination to achieve a classless society while at the same time providing every assistance for the construction of a free market in Europe. Clearly, opacity here has far-reaching causes and is in no sense new.

The Destabilization of the 1970s Certainly, for some sections of French society, both modernization processes could be mutually reinforcing. The most spectacular illustration of this was the élite among the younger farmers, who largely engineered the exodus from a peasant society and the structural transformation of agriculture, and played on the two levels—European and national—to remarkable effect. In the 1970s, however, two crises would change the situation fundamentally: the crisis in society spurred by the events of 1968 and the economic recession in the wake of the oil shock. May 1968 represented, without the slightest doubt, a repudiation of the élites who had carried through endogenous modernization. Overall it was a rebuff that discredited the actors who had opted for modernization in order to overcome the 1940 débâcle. Moreover, the decline of the modernizing state was accelerated by the exhaustion of the Keynesian model. The aftermath of 1968 saw the disappearance or withdrawal of the major post-war political ﬁgures who had personiﬁed national recovery. The decline and demise of the endogenous modernization model can be clearly traced. The demotion of the Plan began with the choice made by Georges Pompidou to combine industrialization with the reinforcement of the primary institutions of French society (the family, local councils, and traditional administrative authorities), a choice which would deprive the Plan of any mobilizing capability. The

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troubled years that followed the turmoil of 1968 witnessed the breakup of the social networks of the modernizing confederacy. The higher civil service became fragmented, as illustrated by the development of ENA. A growing aversion for the Enarchy, both in the administration and in politics, was linked to the eclipse of the reforming ethos and to the disintegration of the apparatus for the social implementation of state initiatives. This internal shock wave was compounded, ﬁve years later, by the effects of the Yom Kippur war, which required the hasty assembling of an interim plan (the Plan Jonquille) whilst Électricité de France implemented an exceptional civil electro-nuclear plan without any attempt at joint consultation (and without a vote in parliament). The economic downturn dealt a severe blow to the forward-planning function of the state.11 Very soon, the notion of Les Trente glorieuses (Fourastié 1979) invested the decline of the French model of endogenous modernization with an aura of nostalgia. It remains to examine the outlook for the second model of modernization after the disappearance of the ﬁrst. The year 1968 is a point of reference for more than a crisis in French society, it was also when the provisions of the Rome Treaty achieved their full effect. The social and political transformations that came about as a result were nowhere more apparent than in the economic sector of large-scale distribution. If ‘May 1968’ called into question the consumer society, the Common Market reinforced it.12 The explosion of large-scale distribution had swift and profound repercussions on society: on the landscape, in the ﬁrst instance, with the outskirts of French towns and cities acquiring a halo of uncommon unsightliness; and then in politics, it being very largely by means of ‘commercial town-planning’ operations that political parties began to extend their hidden ﬁnancing. However, it was the decision taken by President Valéry Giscard d'Estaing and Chancellor Helmut Schmidt to establish a European monetary system that constituted the major structural decision of the 1970s—far more so than the election of the European Parliament by universal suffrage which occurred in the same period. By stabilizing a monetary zone, the EMS gave Europe an effective means of withstanding international economic crises. A Europe of politico-ﬁnancial decision-makers was taking shape. And indeed the requirement of monetary convergence introduced a new constraint upon economic actors and the state. In May–June 1968, and more so in the following years, society had shied away from calls made upon it by the state. Now Europe

11

The case of the reform of social housing in 1977, with the substitution of ‘individual aid’ for ‘building aid’, based upon estimates forecasting a high rate of continuous economic expansion, is a good illustration of this (cf. Grémion 1998).

12

An illuminating instance of Europe being a vehicle for modernization in this sector is provided by Edouard Leclerc who, beginning with a small grocery in Britanny, set up a nation-wide chain of stores, by using to advantage rulings made by the Luxembourg Court to counter the restrictive practices of wholesalers and suppliers at the time.

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became an authority that could exercise coercion in a social climate that was uncooperative and offered a substitute for an inadequate reforming ethos. This development came about in the context of an internationalization of élites that spread well beyond the construction of Europe. The launch of the ERM was also said to underline the strength of the Franco-German partnership which had, to this point, been central to the integration process. The major stages in this rapprochement, such as the Schuman Plan and the Paris Treaty of 1963, were embedded in a more widespread process of Franco-German reconciliation which involved youth exchange schemes, the churches, and a number of associations. Yet by the end of the 1970s, this movement had run its course. Contrasting socio-political mechanisms began to impose a greater distance between German and French societies. The generation of Socialist Party leaders regarded with disdain the co-management schemes developed in the Federal Republic, whilst openly declaring their intention to have done with capitalism. And they saw in the numerous professional exclusions and prohibitions in force in the Federal Republic (justiﬁed by the subversive activities of East German spies) a recrudescence of fascist attitudes. Thus, the Franco-German partnership, though no less a reference after 1978, indeed more so, came to represent a group of decision-makers increasingly preoccupied with exchange rates, whilst other social and intellectual spheres of Franco-German co-operation showed signs of decline.

Mitterrand, Delors, and the Third Europe In 1980, just over one year before the First Secretary of the Socialist Party, François Mitterrand, was elected President of the Republic, the Commissariat Général du Plan published an analysis of the possible course of Europe's future development (Pelletier and Tardy 1980). Three areas, it surmised, would become vulnerable to European interference: population, energy resources, and defence. Further, it did not rule out that the renaissance of Western Europe which had occurred between 1950 and 1970 might not be repeated. Indeed, opinion in France was profoundly sceptical about the future of the EC (Deniau 1977; Benoist 1976; Yann de l'Ecotais 1976; Fralon 1975; Bourdet 1977). In the wake of the second oil shock, Europe entered a phase of slow growth, accompanied by a rise in unemployment. Redeﬁning the welfare state became a central issue, against the backdrop of a rapidly changing international situation dominated by the ‘globalisation of problems which the development of trade and communication was encouraging’ (Pelletier and Tardy 1980). Over the Soviet bloc there hung a cloud of uncertainty. The forecast did not rule out a more authoritarian trend developing in

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the USSR but dismissed two extreme scenarios—a massive onslaught against Western Europe and a wholehearted move towards liberalization. The decisive factor would be the way in which relations between the two Germanies developed. Twenty years on, we know how history has settled the matter. The response to the dual challenge of the collapse of Soviet communism and of the reuniﬁcation of Germany is now epitomized by Maastricht in the eyes of the public. The Treaty of Maastricht marked France's entry into a third Europe, an enterprise carried through by the unlikely alliance of François Mitterrand and Jacques Delors. When the socialists took power in the spring of 1981, Europe had no place on the agenda of the new French government. Quite the reverse. Policy change was dominated by nationalizations, a return to Keynesian public control, and a preoccupation with the Third World. It is true that for the newly elected president Europe would quickly be the subject of two strategic decisions: France's remaining within the EMS and support for the deployment of Pershing missiles in Germany. However, it was Jacques Delors's tenure of the presidency of the European Commission and the preparation of the Single Act that heralded the return of Europe as a source of modernization for French society. Delors's single market initiative was an explicit recognition of an economic climate, characterized by deregulation and the return of monetarist policies (Delors 1995). The Single Act was the most effective means of dispensing both with the outmoded paraphernalia of the ‘break with capitalism’ and the phase of nationalizations buttressing ‘Keynesianism in one country’ which had motivated the left-wing government in its ﬁrst years. Besides, Delors himself, having been Finance Minister at the time, was appointed to the Commission when the ideas and the programme of socialism in France had become depleted. The partnership between Mitterrand and Delors provided an ideal extension of earlier developments by producing foreign policy options along the lines followed by the Giscard d'Estaing–Schmidt partnership and by banking on Europe in order to bring about social progress in an indirect way. Under Mitterrand there was a linear relationship between the decline of socialist ideas and the increasing centrality given to Europe. The juncture between the end of his ﬁrst septennat and the start of his second roughly coincided with the fall of the Berlin Wall, which constituted the decisive threshold. With the Treaty of Maastricht, the second Europe (initiated by the Rome Treaty and extended by the Single Act) gave way to the third. Once more, it is the encounter between this ‘third’ institutional Europe and the French socio-political dynamic which commands attention. It has often been said that if there was one point (at least) upon which François Mitterrand never wavered in his convictions, it was Europe. But this is to forget that the construction of this Europe was a discontinuous process, and one which fostered unsettled and contradictory relations within French politics in

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the post-war period. It may well be true that François Mitterrand traversed three periods of European construction, but as President of the Republic he was careful not to propound a particular vision of integration, since to do so would have been to risk rendering explicit political tensions that were better left dormant.13 In this respect what could be more emblematic (literally) than the place now occupied by the European ﬂag in presidential press conferences. One day, the French came across the fact that they now had two standards: on this point they were never consulted. Jacques Delors himself belonged to the endogenous movement for modernization. Unlike the President of the Republic, he had not played a part in the ﬁrst phase of pro-European construction set in motion by The Hague Congress (as a young trade unionist, he had in fact sided with the opponents of the EDC). At the time of the political debate unleashed by the Rome Treaty, which marked the start of the second phase, he presented a report to the executive committee of La Jeune République (the small party he belonged to at the time). The arguments that he developed (priority to French recovery, the importance of not severing contacts with popular democracies such as Poland and Yugoslavia, and the need to put Franco-African links on a new footing) were a perfect illustration of the reticence felt by this small noncommunist left-wing milieu, linked to the modernizers, about the Treaty. At the conclusion of the Algerian conﬂict, he became a member of the Commissariat du Plan. He was seconded to the private ofﬁce of Prime Minister Jacques Chaban-Delmas at the time of the New Society initiative, when Europe impinged little if at all on his thinking (see Delors 1975). When the ﬁrst elections to the European Parliament took place, he was given a secondary position in the Socialist Party list (explained by the fact that he had only recently returned to it). Further, he was not a candidate for the presidency of the European Commission.14 If the style of Jacques Delors's presidency of the Commission has been closely analysed (Ross 1995), the relationship he endeavoured to establish between his quasi-governmental activity in Brussels and French society merits exploration. When one studies his acts and his declarations, it would appear that Delors imagined that Europe could be used as a replacement for the now defunct system of planiﬁcation, to mobilize social actors as in the good old days. Yet, although Delors achieved this conversion himself, he failed to ensure that France as a whole managed to do so. Indeed, seldom

13

Thus, the Lettre à tous les Français, which President Mitterrand (1988) produced for the electorate in 1988, apart from showing his support for Jacques Delors and the odd literary ﬂourish—‘La France est notre patrie, l'Europe notre Avenir’—contains little of moment on European issues.

14

It is an open secret that Delors's ambition was to be Prime Minister. He came to head the Commission only after the ﬁrst candidate put forward by Mitterrand, Claude Cheysson, had been turned down by the FRG and by Britain.

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since the Mendès-France era has one witnessed anyone master so completely a dossier (that of the Single Act), in which technical rigour was matched both by unswerving commitment, and inexhaustible energy. True, the arrival of a Christian Democrat Chancellor in Germany in 1982 was of considerable beneﬁt to the Christian technocrat. Indeed, above and beyond the inﬂuence upon him of the ‘three Ms’ (Mounier, Mendès, Massé), Jacques Delors was closely associated with the movement for reconciliation which enabled him to acquire a strong awareness of German dynamism, and stood in marked contrast to the superﬁcial ideological vision of his party comrades. To complete the picture, Delors quickly found favour with the USA, whose recognition was to count for a great deal in creating the stature he gradually acquired. No French public ﬁgure since Monnet integrated so successfully into German and American networks. But if one turns from so outstanding an individual achievement to the overall picture, there is less to celebrate. And the admission of failure was his own. In 1994, Delors declined to become a candidate in the presidential elections on the grounds that French society was not ripe for change. Delors, in Europe a rocket, disintegrated on re-entering the dense layers of the political atmosphere in France. Such a trajectory provided ample conﬁrmation that one could more readily be a personalist and a social democrat at the European level than in France itself. This had always been suspected, but Jacques Delors provided deﬁnitive proof of the fact, and his noncandidature represented a major political turning-point.15

A Weakened Republic The current institutional confusion in France springs from the progressive weakening of Republican institutions (or of the Republican model), caught in a pincer grip by the two models of modernization and decreasingly able to absorb the pressures exercised by them. State-driven modernization gradually destabilized the ‘Republican synthesis’ which had been realized by the Third Republic (Hoffmann 1963), characterized by both the centralization and the limitation of the state's role within a conservative society so well conveyed by the world of small towns and notables living as much in the shadow of their préfectures as of parochialism (Luthy 1955). This political and social world has now been swept away. The Republic had previously been based upon a central conﬂict and a succession of compromises with society. The former pitted the intellectual and

15

In the same annus horribilis (1994), Michel Rocard, who had also emerged from the endogenous modernizing party of the post-war period, led a disastrous campaign in the European parliamentary elections, disastrous enough in fact to compromise his political future. In its way, Rocard's failure served further to invalidate the transfer theory nurtured by Delors.

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political forces of republicanism against the Catholic Church. On the one hand, the Republic had to display its moral superiority over the Church. On the other, by separating Church and state, it was led to give to the schools the role of a contre-Église (Nicolet 1982). This institutional model, however, was destabilized by a number of factors including the loss of centrality of the Church, the diminishing integrative effect of public schools under the pressure of mass education, and the presence of a signiﬁcant Islamic community. The Republic also contained a number of social compromises, and particularly a balance between centre and periphery in a political system put in place by organic laws which had instigated the system of departments and communes at the end of the nineteenth century. This integrative balance has also been undermined by the triple strain of the exodus from the countryside, urbanization and industrialization. For forty years, France has faced an unwelcome choice between a politico-administrative model centred on either regions or departments, and has baulked at the notion of a Europe of the regions. In the aftermath of the war, the main preoccupation was not so much the question of the Republic as that of the Revolution—the very term itself was made too much of. In the years that followed the disintegration of the Third Republic, there was no shortage of candidates for revolution: the national revolution of Vichy's ﬁrst phase; the epic of La France libre led by de Gaulle who understood the revolutionary undertones of the Second World War;16 the rivalry between the internal non-communist resistance movements (remember the motto ‘From resistance to revolution’) and the French Communist Party, which was at the height of its strength and inﬂuence at the time of the cold war. Yet the re-emergence of the Republican question at the centre of French concerns and anxieties was not merely the consequence of the destabilizing and contradictory effects of public policies, but of three more fundamental phenomena: the heritage of May 1968, the collapse of Soviet communism, and the resurgence of extreme nationalism. May 1968 somehow put the Revolution question back on the agenda. But the revolution aborted and ‘May '68’ was largely a cultural construct assembled in disregard of the social movement evident in May and June 1968. At the basis of the cultural triumph of the 1968 generation lay a covert disillusionment with French society which declined to go along with its revolutionary momentum. This disillusionment was linked to the neo-antiracialism nurtured by the events of May 1968, which developed following the break in the equilibrium established by previous waves of migration (Yonnet 1993). The collapse of communism had another destabilizing effect, for it was largely in the name of

16

Crémieux-Brilhac (1996: 375) quotes a sarcastic remark made by de Gaulle during the war: ‘Patience! On verra bien qui fera pour ﬁnir la Revolution nationale’ (We'll wait and see who ﬁnally brings about national revolution).

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anti-fascism that the French communists set themselves up as defenders of the Republic. In the midst of dislocation and conﬂict, a new nationalist party with an extreme right-wing core found an enduring place in the political system, and with it the ghost which the two models of modernization were thought to have exorcized reappeared. It was against this background of a Republic rendered fragile that the referendum on Maastricht which signalled the launch of the ‘third’ Europe took place. The ‘Yes’ vote won, but by a narrow margin showing that, if Europe was tacitly accepted, it aroused little enthusiasm. Analysis of the vote showed that support for Europe was in direct ratio to level of education: the higher this was, the stronger the support. Furthermore, the geographical distribution of the ‘Yes’ and ‘No’ votes coincided nearly perfectly with that of erstwhile religious practice. Regions where Catholicism predominated voted ‘Yes’, those where anticlericalism had been strong voted ‘No’. Thus, the construction of the ‘third’ Europe hastened the dismantling of the socio-economic ediﬁce built by the state after 1945 and produced a heightening of tension within the Republican culture, weakened both in its assumptions and its institutions. Nor has it yet managed to come up with convincing replacements.

References Allen, Christopher S. (1989). ‘The Underdevelopment of Keynesianism in the FRG’, in Peter Hall (ed.), The Political Power of Economic Ideas (Princeton: Princeton University Press). Aron, R. (1955). ‘Esquisse historique d'une grande querelle idéologique’, in R. Aron and D. Lerner (eds.), La Querelle de la C.E.D. (Paris: Cahiers de la FNSP and Armand Colin). Benoist, J.-M. (1976). Pavane pour une Europe défunte (Paris: Éditions Hallier). Bourdet, C. (1977). L'Europe truquée (Paris: Seghers). Crémieux-Brilhac, Jean-Louis (1990). Les Français de l'an 40 (Paris: Gallimard). —— (1996). La France libre (Paris: Gallimard). Delors, Jacques (1975). Changer (Paris: Stock). —— (1995). ‘Le moment et la méthode’, Le Débat (Jan.–Feb.). Deniau, J.-F. (1977). L'Europe interdite (Paris: Éditions du Seuil). Duchêne, François (1994). Jean Monnet: The First Statesman of Interdependence (London: Norton). Fourastié, Jean (1979). Les Trente glorieuses (Paris: Fayard). Fralon, J. A. (1975). L'Europe, c'est ﬁni (Paris: Calmann-Levy). Grémion, Catherine (1998). Primat de l'aide à la personne sur l'aide à la pierre: Histoire d'une remise en question (Paris: Comité d'histoire du Ministère de l'Équipement).

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Hayward, Jack (1974). ‘The Changing Political Context of French Economic Planning: A British View’, in Lucien Nizard (ed.), Planiﬁcation et société (Grenseioble: Presses Universitaires de Grenoble). —— (1983). Governing France: The One and Indivisible Republic (London: Weidenfeld & Nicholson). Hoffmann, Stanley (1953). ‘Paradoxes de la Communauté politique française’, in S. Hoffmann, C. Kindleberger, L. Wylie, J. R. Pitts, J.-B. Duroselle, and F. Goguel (eds.), A la recherche de la France (Paris: Le Seuil). Luthy, Herbert (1955). A l'heure de son clochert: Essais sur la France (Paris: Calmann-Lévy). Mitterrand, François (1998). Lettre à tous les Français (Paris: L'Avenir Graphique). Nicolet, Claude (1982). L'Idée républicaine en France (1781–1924): Essai d'histoire critique (Paris: Gallimard). Pelletier, Jacques, and Tardy, Gérard (1980). L'Europe des vingt prochaines années (Paris: La Documentation Française). Pineau, Christian, and Rimbaud, Christine (1991). Le Grand Pari (Paris: Fayard). Pratt, Alain (1991). Quelle Europe (Paris: Julliard). Rosanvallon, Pierre (1989). ‘The Development of Keynsianism in France’, in Peter Hall (ed.), The Political Power of Economic Ideas (Princeton: Princeton University Press). Ross, George (1995). Jacques Delors and European Integration (Cambridge: Polity Press). Shonﬁeld, Andrew (1969). Modern Capitalism: The Changing Balance of Public and Private Power (London: OUP). Yann de l'Ecotais (1976). L'Europe sabotée (Brussels: Rossel Edition). Yonnet, Paul (1993). Voyage au centre du malaise français: L'Antiracisme et le roman national (Paris: Gallimard).

5 Two French Changes Stanley Hoffmann Among the many changes that have transformed France over the years of the Fifth Republic, two will be discussed here brieﬂy. One is the constitutional system of the regime, the other is France's ‘Europeanization’.

The Constitution of the Fifth Republic France's political institutions have evolved considerably since the adoption of the Constitution of 1958. Decentralization, which de Gaulle decreed possible and necessary after the ‘events’ of May 1968, but failed to get endorsed by the public because of the linkage he had imposed with a reform of the Senate, has ﬁnally been put into effect, despite the reluctance of Pompidou and the doubts of several Gaullist ‘Jacobins’. For all its ﬂaws—insufﬁcient autonomous resources, overlapping jurisdictions, the continuing preponderance of the departments over the regions—it has given to the regions a genuine existence and contributed to the spectacular revival of provincial cities and local life. The Constitutional Council has freed itself from the limits which the drafters of the Constitution had wanted to impose upon it (so that it would be a guardian of executive supremacy); it has also liberated itself from the old Jacobin orthodoxy which denounced the ‘power of judges’ and proclaimed the omnipotence of the people's will and of the people's representatives. Since most of the laws emanate from the government, the control of their constitutionality amounts to a check on both parliament and the executive, and the Council has often given as a basis for its decisions not just the text of the Constitution but also broad general principles of public law. The Constitution itself has displayed astonishing ﬂexibility. De Gaulle had said that a Constitution is a mere envelope. The content of this one has changed considerably in the past thirty years, but it has not been torn. In a nation in which an American-style presidential regime would result in even more deadlock between the branches than is the case in the USA, and where

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the nature of the party system would doom a return to the parliamentary regime of the Third and Fourth Republics to the same impotence of the executive as in those cases, the mixed regime instituted by de Gaulle and Debré has functioned in two very different ways. Neither one corresponds to de Gaulle's ideal of a strong, indeed dominant, President representing the people's general will, above all parties and factions: after his own direct election in 1965, he himself ruled as leader of the relatively united right. But when the President and the parliamentary majority are of the same political family, de Gaulle's ideal of presidential preponderance has prevailed, with a Prime Minister in the uncomfortable position of having to choose between being a gloriﬁed chief of staff of the President, on whom unpopularity for daily policy choices accumulates, or being a frustrated would-be rival of the President whose temptations to emancipation would result in his dismissal if they became too obvious. The dissolutions of the National Assembly in 1962, 1968, 1981, and 1988, the elections of 1967, 1973, and 1978, gave to the President the majority he needed, and in these cases he was able to behave like a monarch. The other way in which the Constitution has functioned has been that of the ‘rationalized parliamentarism’ wished for by Michel Debré. De Gaulle wanted a head of state above parties, or at best sufﬁciently the master of a majority to be able to impose his will on it. Debré, an experienced parliamentarian, doubted that this could be easily achieved: ﬂuctuating factions were here to stay, and therefore the best formula would be to achieve by constitutional hedges, restrictions and constraints that supremacy of the executive over the legislative branch which results, in some parliamentary regimes (such as the UK's) from a two-party system. The beneﬁciary of this constraint on parliament would be the government: in Debré's conception, the President was not the supreme ‘arbiter’ desired by de Gaulle, but an important ﬁgure in foreign and defence affairs, and a leader in emergencies; but domestic policies were the Prime Minister's domain. Under de Gaulle, the Constitution functioned, so to speak, two-thirds à la de Gaulle, who proclaimed that there was only one head of the executive (himself), and one third à la Debré, because the General was, to use American lingo, a ‘forest man’, not a ‘tree man’ (Jimmy Carter was described as a ‘leaf man’), and he left the daily care of trees to the Prime Minister. Later, when the elections of 1986 and 1993 saddled François Mitterrand with a right-wing Assembly, and when the suicidal dissolution of 1997 burdened Chirac with a left-wing parliamentary majority, cohabitation, in 1986–8, 1993–5, and since 1997, has shown the vitality of the Debré formula. Both his and de Gaulle's conceptions ensure the preponderance of the executive, but the main beneﬁciary is not the same. When the Constitution functions in a presidential mode, the chief of state is more powerful than an American President. When it functions in the

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cabinet mode, the Prime Minister has as much authority as his British and German counterparts. It is true, as Raymond Barre never tires of pointing out, that cohabitation leads to conﬂicts and occasional deadlocks between the two rival heads of the executive. But alternatives would probably be worse. Since 1981, the Fifth Republic has demonstrated the possibility of l'alternance and of cohabitation. Mitterrand, who had denounced the regime as a permanent coup d'état, used the presidential powers to the full. Paradoxically, the narrowing of the margin for action in economic and social matters, because of the constraints of ‘globalization’, and—as was demonstrated in 1983—of European integration (a noose tightened by Maastricht and monetary union) has somewhat reduced the range of possible conﬂicts between the President and the Prime Minister in periods of cohabitation (although Jospin and Chirac have shown that there is still a great deal to ﬁght over in social policy). The fact that the envelope has not worn out does not mean that all is well. France's old tension between liberty and equality is as powerful as ever. A certain amount of deregulation, or retreat from dirigisme, for reasons of competitiveness and European directives, is still slowed down by a powerful collective desire for equality and protection, which makes it difﬁcult for governments to increase the ﬂexibility of the labour market à la Blair, or to reduce the beneﬁts citizens obtain from the many regimes of social welfare. And this desire for equality and protection limits private initiative, breeds rigidities, and results in new inequalities, for instance between the unemployed and the workers. Nor has the importance of the state in French life been drastically reduced. In a country where state activities penetrate as deeply into society as in France, where large groups (doctors, farmers) live in a kind of symbiosis with the state, where the state often subsidizes voluntary associations and gives a certiﬁcate of representativity to professional organizations, in a country where the élite trained at the ENA dominates not only the civil service but the political class and the heights of the economy (public and private), the separation between state and civil society, so dear to liberals and political scientists, makes little sense.

France and the EU France has been both the main initiator of European integration, with the Schuman Plan of 1950, and a recurrently hesitant and reluctant participant in a process that, it feared, was beyond any national control. Thus, France both launched and killed the European Defence Community (1950–4), it endorsed the Common Market created by the Treaty of Rome (1957) but, under General de Gaulle (1958–69) opposed any form of supranational integration. France pushed for the Single Act of 1987, which created a vast sphere of decisions

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that could be taken by qualiﬁed majorities, and for the Maastricht Treaty, which decided to establish a European Monetary Union with a single currency. But the Maastricht Treaty was endorsed, in a referendum, by less than 51 per cent of the French voters. The arguments of the two camps, in French debates over Europe, have not changed much over time. In the 1950s, the supporters of integration and of supranational institutions argued about the need for Franco-German reconciliation, pointed out that such institutions would sharply curtail the sovereignty of the new Federal Republic of Germany, emphasized the economic advantages of lifting trade barriers within Europe, and proclaimed that only a united and coherent European entity could speak as an equal to the USA. Thus, a pooling of some of the member nations' powers—a reduction in their sovereignty—was in their own interest, and in particular in France's. Now that FrancoGerman reconciliation has been achieved and Germany reuniﬁed, the ‘Europeanists’ focus more on the need for a ‘European’ Germany rather than having a renationalized one in the middle of Europe. The critics of the European enterprise have often argued that they are not against a European confederation of states, and that what they are opposed to is only a ‘bureaucratic and technocratic’ Europe, in which key decisions are made by faceless supranational functionaries (those of the Commission), bankers (of the new Central Bank) and judges (of the European Court of Justice) who are not accountable to the peoples of Europe. In fact, their stance amounts to a defence of national sovereignty—seen almost as a mystical and indivisible force—and a fear of entrusting important sectors of public life to the preferences of foreigners whose traditions and policies are often very different from France's. To those who fear a non-Europeanized Germany, the French nationalists oppose the fear of a European entity dominated by Germany. To those who stress that a European quasi-state can better check American power than the separate member states, the nationalists reply that, in the absence of a ‘European nation’, this quasi-state lacks the democratic legitimacy necessary for such a task, and that it results only in the dismantling of the French state, the traditional backbone of the French nation. From the beginning, the ‘sovereignists’, as some French commentators have called them, could be found both on the left and on the right. During the battle over the EDC as well as that over Maastricht, the opponents were, on the left, the Communist Party and a ‘Jacobin’ wing of the Socialist Party, eager to protect the Republic and its general will from foreign intrusions, and on the right many of the Gaullists and traditional nationalists. This does not mean that nothing has changed over the last ﬁfty years. Two developments have been notable. First, the camp of the opponents of integration has been given a new energy and a new batch of arguments by the turn of what was still, then, known as the European Community toward a single

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market characterized by complete competition, even in sectors long dominated by monopolies, such as the French public sector composed of nationalized public services. France has always been, at best, a reluctant practitioner of liberal economics, with a strong protectionist and interventionist state that often deﬁned its mission as the protection of the weak against the ravages of capitalist competition. The famous criteria of convergence imposed by the Bundesbank as a prerequisite to its acceptance of a euro that would replace the solid and stable Deutschemark were widely denounced, in France, as a recipe for economic stagnation and unemployment, as a condemnation to the ‘single way’ of the kind of ﬁnancial orthodoxy embraced by conservative bankers hostile to state interventions in the currency markets. Secondly, however, despite this new vigour in their arguments, the ‘sovereignists’ have lost ground. The reasons for this gradual shift are many. First, it is becoming difﬁcult to argue against the apatride (un-national) bureaucrats, in a system in which the key decisions are taken not by the Commission but by the Councils of heads of states and governments or of ministers, that is, in an inter- but not supranational manner. Secondly, it is becoming impossible to argue against the ‘little Europe’ of integration at a time when it includes already ﬁfteen members and is negotiating the entry of several Central and East European new members (none of which is rabidly in favour of supranational concepts). Thirdly, sovereignty has been irremediably emptied of much of its substance not only by the European process of community-building, but by globalization, that is, not only by the abolition of barriers among the members but by the opening of borders to the goods and services of the rest of the world, as agreed upon by the members of GATT and of the World Trade Organization, under the pressure of the USA. Fourth, many of the ‘sovereignists’ happen to be ﬁercely suspicious of American hegemony in foreign and defence policy matters—remember France's history of prickly relations with NATO. They realize, more or less dimly, that the best hope for being able to resist the dictates of Washington resides not in a sovereign French diplomacy and army, but in a common European foreign policy and security enterprise. Fifth, the most ardent defender of national sovereignty in the EU, the United Kingdom, has, under Blair, moved away from the anti-EU attitude Mrs Thatcher and to some extent John Major had displayed. Sixth—last but not least—the process of European integration has gone too far, in creating a single market, to be reversible. This does not mean that the nationalist camp has given up. In the elections to the European Parliament, in spring 1999, its diverse components still obtained around 40 per cent of the votes. But they represent more a protest against the inevitable than a constructive alternative. The country's economic and administrative élites are solidly proEuropean, and so are most of the intellectuals. Much will depend on how successful the strange team of

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President Chirac and Prime Minister Jospin—a Gaullist President who has moved from rabid opposition to European integration in the late 1970s to solid endorsement of it in the 1990s, and a cautious but committed ‘European’ Socialist Premier—will be in reducing unemployment and in pumping up economic growth (something which, ultimately, depends largely on Germany's performance). But the present prospect is that of the gradual development, in geographical and functional scope, of a union that will be an original, complex ‘Federation of nations’, in Jacques Delors's terms: a political entity both above, and resulting from the existing national entities. As long as there is no genuine European public space, no genuine European civil society, but only an addition of national societies and public spaces, this entity may well be a threat to the powers of the component states, but not a rival of the existing nations. Whether the nationalists nostalgic for sovereignty will ﬁnd this consoling is another matter. After all, there are now very few aspects of national life, very few policy areas, that can be handled without reference to or interference from European institutions and policies. This is the biggest change in French affairs since 1958.

6 The Further Off from England: British Public Opinion and 17

Hugh Berrington and Rod Hague ‘What matters it how far we go?’ his scaly friend replied. ‘There is another shore you know, upon the other side. ‘The further off from England the nearer is to France— ‘Then turn not pale, beloved snail, but come and join the dance. ‘Will you, won't you, will you, won't you, will you join the dance? Will you, won't you, will you, won't you, won't you join the dance?’ (Carroll 1938)

Introduction The ups and downs of public opinion about British association with Europe have long been monitored, learned, inwardly digested, and outwardly trumpeted. What is surprising, after forty years of ﬂuctuating support, is the lack of perspective that marks much of the commentary on these oscillations. In the early years of the controversy, premature assurance was understandable: ‘it seems that the battle for public opinion on this issue has almost been won’ declared a respected polling team (NOP 1966a), a judgement that its own polls refuted within a year (NOP 1967a). At the end of the century, it is less easy to excuse the kneejerk responses that characterize so many recent appraisals. The European elections of 1999 in Britain exemplify this lack of historical perspective, and an inability on the part of many observers to see the results in context. Elections are one of the means of providing linkage between the

17

Most of the data used in this chapter comes from British Social Attitudes annual surveys, ﬁnanced by the ESRC and the Sainsbury Trust, and the British General Election Studies of 1992 and 1997, also ﬁnanced by the ESRC. We are particularly grateful to the ESRC Data Archive for making the data available to us. We also wish to express our thanks to Phil Daniels and Martin Harrop and above all to Geoffrey Evans for their ready help.

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opinions of ordinary citizens and the decisions of government. The interaction, however, was less clear-cut, the meaning of the results more equivocal, than much of the media comment supposed.

The European Elections of 1999 Elections to the European Parliament, such as those held in June 1999, ostensibly afford an opportunity for voters to express their opinions on the policies of the European Union. The elections, held for the ﬁrst time in Britain under a form of proportional representation, showed a swing of 10 per cent since the 1997 general election. Conservatives won thirty-six seats, and Labour twenty-nine—a big turnaround since the previous European elections when Labour won sixty-two seats to the Conservatives' eighteen. Moreover, when broken down by parliamentary constituencies, the votes showed that, if everyone behaved at a general election as they had at the European elections, the Conservatives would have won an overall majority of forty-ﬁve (Hames 1999). Commentators argued that the unprecedented honeymoon that New Labour had had since May 1997 had come to an end. The elections had been a referendum on the euro, and showed the electors decisively rejecting the abandonment of the pound; more generally, they showed the electors' exasperation with Brussels. Labour supporters had been deterred from voting by the complications of PR, or else by the anonymity of the procedure which prevented them from voting for individuals; or Labour's core voters in the industrial heartlands had lost fervour because the government had spent too much time on placating the voters of Middle England and had not heeded working-class demands for more welfare spending. Suddenly the electoral situation seemed to be transformed; the Conservatives, written off as likely to be out of power for ten years, might now come back soon, after all. Such interpretations lacked nothing but evidence. It was true that William Hague and the Conservatives had campaigned to save the pound and, indeed, for some years opinion surveys had shown marked hostility to Britain's joining the single currency but to assume, without further warrant, that the result reﬂected that stance is to fall into extravagant post-hoc inference. What politicians talk about, and what voters vote about, are sometimes quite different things. The view that the use of PR had alienated voters was undermined by an NOP poll soon afterwards, showing that almost two-thirds of those questioned would like to see the method extended to Westminster and local council elections (Independent 1999). Interpretation of the results was made more ambiguous because fewer than a quarter of the electors actually voted. Commentators acknowledged the low

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turnout, looked it in the eye, and then marched straight past it. Local council elections, and European elections, are almost always distinguished by a low turnout. For many years, despite this difference, they have been treated as an indicator of the national standing of the parties. Indeed, when the Conservatives are in power nationally, local and other low-proﬁle elections such as the European contests do seem, despite occasional exceptions, to provide a measure of the popularity of the two main parties. (Liberal Democrats normally do better in local, though not in European, elections than their opinion poll rating would imply.) But in local council elections during the 1960s and the 1970s, it became clear that something special happened when Labour were in power nationally. Labour always did worse than its opinion poll ratings seemed to show.18 It was not merely that Labour governments, like Conservative governments, became unpopular in mid term. Labour did worse in government, at any given level of popularity, than it did in opposition. This special turnout gap seemed to be at least the equivalent of a 5 per cent swing, or a change of 10 per cent in the lead. The long Conservative rule between 1979 and 1997, and the coming of a new generation of election commentators, meant that this contrast between Labour in opposition and Labour in government had been forgotten. On past history, nothing was more likely than that Labour, despite a remarkable postelection lead in the opinion polls, would start to lose council seats when it formed the government at Westminster. In the same way, Labour were likely to suffer setbacks in the European elections. (Note that before 1999 no European elections had been held when a Labour government was in power.) Local council by-elections gave forewarning of such reverses early in the new government's life. An analysis in September 1997, when Labour's opinion poll lead reached the stratospheric level of 34 per cent, indicated that the local election results were consistent with a Labour lead of only 9 per cent, lower than at the May general election (Rallings and Thrasher 1997). A similar estimate the following April suggested that Labour's lead had fallen further, to a mere 2 per cent, a ﬁgure also implied by the annual local election results in May, when two opinion polls were signalling that Labour were ahead by nearly 30 per cent (Rallings and Thrasher 1998). These results seemed to say, that, if anything, Labour's turnout gap in low-proﬁle elections had grown since the Wilson/Callaghan era. There should, therefore, have been no surprise that Labour did so badly at the European elections in 1999. The greater reluctance of Labour voters to walk to the polling-booth must be a cause of general concern to the party's leaders, but there was nothing singular in its occurrence at the Euro elections.

18

National Opinion Polls in May 1965 pointed to the wide discrepancy between Labour's opinion poll ratings, after six months in power, and its heavy local election losses in May 1965. See NOP Bulletin May 1965.

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Nation wide opinion polls held soon afterward showed litle change in Labour's huge lead; and the Eddisbury byelection, on 22 July, illustrated the perils of extrapolating from elections held on a 23 per cent turnout to the results of a general election when there would be a turnout of 70 per cent or more. At the European elections, on 10th June, the Conservatives did even better in Eddisbury than in the country at large, recording a lead of 26 per cent over Labour and achieving a swing of 12 per cent since the general election. Six weeks later, a by-election was held and turnout doubled. The Conservative margin over Labour was a mere 4 per cent, a swing back to Labour of 11 per cent since early June.19 The lesson of such contests is that it should not be assumed that British electors always give their verdict on what an election may formally be about—namely, European policy or the record of local councils. In the same way, we should be wary of those who interpret the ﬁndings of an opinion poll on Europe, or any other measure of public opinion on the issue, as showing an independent, coherent, consistent, and settled judgement. To take one of the main themes of this book, it is clear that Europe has had major effects on conﬂict at élite level. To ask, however, what has been the effect on British politics of popular opinion about Europe is often to ask the wrong question. Much of the time, what has been important has been the effect of British politics on the perceptions British citizens have of European integration, not the other way round. Over the long term, politicians' initiatives have had more impact on what ordinary people think about Europe than public opinion has had on the behaviour of politicians. Much of what has passed for public opinion on Europe has been derivative, not original; sometimes contradictory, and often ephemeral.

V. O. Key's Framework After forty years, it is still hard to ﬁnd a better framework for the analysis of public opinion than that set out by the American political scientist, V. O. Key, in his book Public Opinion and American Democracy (1961) and scholars studying the politics of the European Community/Union have been amomg the ﬁrst to acknowledge its utility (Lindberg and Scheingold 1970, cited in Hix 1999). Key ﬁrst asked what were the patterns of distribution of opinion on particular issues. Was opinion characterized by consensus, with most members of the society agreeing about the issue, or distinguished by conﬂict? What form did its structural distribution take? In other words, what were the underlying

19

We are grateful to Vale Royal District Council for supplying these ﬁgures.

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social and geographical cleavages? Thirdly, Key asked about the properties of an opinion. Were opinions held intensely, or lightly? Was opinion stable, or volatile? Key's fourth feature was formation. What are the roles of the family, or say, the education system in shaping opinion? Key concluded by examining linkages between opinion and government action. How were opinions connected to the institutions which had the authority to embody them in decisions? How far were opinions expressed through the political parties, or through elections (Key 1961)? Key's book runs for nearly 600 pages, and we cannot hope to cover all his ground, even in relation to a single issue such as Europe. Moreover, there are some questions for which do not have the data to provide the answers. We aim therefore to use Key's framework selectively. We intend to apply it within two broadly separate periods—from the ﬁrst application in 1961 to Mrs. Thatcher's election victory of 1983; and from 1983 to 1999, a period which saw the proponents of withdrawal from the Community, the Labour Party, become its most fervent defenders, and its champions, the Conservatives, become its most severe detractors.

Europe and Key's ‘Permissive Consensus’ Key's notion of a ‘permissive consensus’, in particular, has attracted scholars studying the evolution of opinion among the early members of the European Community—an emphasis ﬁrst voiced by Lindberg and Scheingold (1970, cited in Hix 1999). A supportive but detached public opinion gave the élites in the founder states the leeway they needed to take the decisive steps, without serious challenge, towards the foundation of the Community, and the establishment of its institutions. The general goodwill that large sections of the electorate felt for European integration was not matched by any active commitment. Governments, nevertheless, were able to go ahead, conﬁdent that no major section of the public felt any strong antipathy to the construction of the European ediﬁce. In contrast, on the surface at any rate, British public opinion was marked by conﬂict rather than consensus. The issue was novel, and not surprisingly there were many who had no opinion. Among those who had, opinion was polarized. Thus at the time of the ﬁrst British application, although a big majority of voters endorsed entry (NOP 1961) support soon fell, and by the end of 1962, after fourteen months of negotiation, the country was equally split between joining and staying out (NOP 1962). For a brief time, after President de Gaulle's ﬁrst veto, there seemed to be widespread agreement, straddling supporters of both main parties, for British membership, which survived beyond the next British announcement in the summer of 1966.

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Public opinion at ﬁrst welcomed the Wilson government's declaration that it was minded to apply for membership, but this consensus did not last for long (NOP 1966b). By November 1967, just before the second French veto, an NOP sample divided 45 per cent to 39 per cent against entry (NOP 1967b). The bid's failure was followed by a ‘negative consensus’ amongst voters; the country wanted nothing to do with the Common Market (NOP 1969). The grapes were out of reach, and the British people concluded that they were probably sour. Edward Heath's election victory in June 1970 saw a new British application, and with it the collapse of any consensus, whether permissive or negative. Thereafter, except for the months on either side of the referendum of June 1975, apparent conﬂict, not agreement, informed British popular opinion until the late 1980s, when for a short time a new permissive consensus was inaugurated. In 1983, Labour fought the general election on a pledge to withdraw from the Community. As Table 6.1 shows, such a policy commanded considerable, though not majority, support—and it stretched well beyond Labour's ranks. The year after, the margin for staying in was narrow indeed. Nevertheless, Labour now acknowledged that withdrawal was no longer a practical option. This grudging acceptance of the Community gradually blossomed into liking and then into enthusiastic endorsement. With the Community now backed by all three parties, public opinion seemed as warm as it had been from being half-hearted in the early 1980s.

To Stay or to Leave? British Social Attitudes (BSA) provides us, from 1983, with an annual snapshot of responses to the question ‘Do you think Britain should continue to be a member of the European Community, or should it withdraw’'? Table 6.1 shows the overall percentages favouring continued membership, and those supporting withdrawal, for selected years between 1983 and 1997. The BSA asked this question for every year between 1983 and 1991; thereafter, it was discontinued for a while, but the British Election Study (BES) asked the same question for 1992 and BSA renewed it in their 1997 survey. The precarious margin for staying in, recorded in 1984, turned into a comfortable lead over the next two years, and then, after the Labour Party's conversion, swelled to an overwhelming preponderance by the end of the decade. The 1992 general election saw a slight recession in support, with a further, and substantial, fall in 1997. The supplementary questions, however, revealed widespread misgivings. Thus nearly a half of Conservative supporters in 1992 who wished Britain to stay in the European Union, and three-quarters in 1997, wanted to cut back the EU's powers. (BEPS 1992 and 1997). Labour

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Table 6.1. Britain and the European Community/Union: To Stay or to Leave? (%) Year 1983 1984 1985 1986 1990 1992 1997

Continue 53 48 56 61 76 73 55

Withdraw 42 45 38 33 19 21 28

Sources: British Social Attitudes annual surveys, 1983–90, 1997. 1992 British Election Panel Study. Note: Don't knows excluded.

supporters showed a similar, if less pronounced, disillusionment. Moreover, some commercial polls in the mid-1990s showed a much narrower margin for continued membership than did the British Election Study of 1992 and the British Social Attitudes survey of 1997. Maastricht exempliﬁed the dynamism of the Community. Those who had gone along with the entry into the EEC, as it was ﬁrst called, believing that they had joined nothing more ambitious than a free-trade area, and without sharing the enthusiasm of their continental partners, found that the purposes of their European colleagues were far wider than their own. It was as if they had joined a boat for an afternoon's cruise, only to ﬁnd that they had signed up for a voyage longer and more turbulent than they had ever dreamt of. It was the drive for a more perfect union which evoked the eurosceptic response. The proposals to extend the powers of the Community, and particularly the plans for economic and monetary union, seemed to provoke a backlash amongst the Conservative élite (Baker et al. 1993; Berrington and Hague 1998), once reliable defenders of British participation, and, in part perhaps by imitation, amongst the mass electorate. It was not so much that the British groom had tired of the European bride; rather, to adapt a phrase of Arthur Koestler's, the lovely Rachel had turned suddenly into the ugly Leah. ‘The permissive consensus’ has been a rare feature of British public opinion on Europe. Consensus, in so far as it has been discernible, has often been negative rather than permissive. In one sense, the dominant model has been conﬂictual but, as we shall see, such a depiction may relate more to form than to substance. ‘Pseudo-conﬂict’ is the term that best describes the main pattern.

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The Euro More recently, British reactions towards the adoption of the euro afford a classic illustration of the ‘negative consensus’. The single European currency seems to epitomize all the festering resentments against, and all the latent anxieties about, Britain's relationship with the institutions of the new Europe. Ever since the Maastricht commitment, public opinion has been almost consistently hostile to Britain's adoption of the euro and the abandonment of the pound. Even before Maastricht, in late 1991, MORI found 54 per cent against Britain's joining a single European currency, with only 33 per cent in favour (MORI 1991). There were warning signs from the pollsters. Few at élite level were now prepared to call for withdrawal from the EC, and most voters, if asked, voiced general support for British membership. Beneath the surface, there was widespread antagonism to speciﬁc proposals for greater EU powers. A MORI question in November 1991 asking respondents whether they supported or opposed transferring more power from national parliaments to the European Parliament showed support falling from 30 per cent the year before to a mere 17 per cent (MORI 1991). An Observer/Harris poll, taken in the same month, found that two-thirds and upwards believed that Parliament should not give up powers in foreign policy and defence to Europe, and around half the total sample opposed Europe taking over national powers on the environment, the setting of a European minimum wage, and European Community regulation of working conditions (Observer 1991). Responses to general questions about closer integration with Europe do not do justice to the hostility speciﬁc suggestions for a greater EU initiative often incur (Evans 1996, 1998a). The British people may still wish to go to the altar, so long as they are not required to consummate the marriage. In the British Election Study in 1992, 54 per cent of all respondents wanted to keep the pound as the only currency in Britain, against 21 per cent who wanted to replace the pound with the euro. The remaining quarter either wanted to have both currencies, or had no opinion. Of those making a clear-cut choice, the upholders of the pound outnumbered the advocates of the euro by more than two to one. By 1997 that margin had grown to between three and four to one to one. It is hard (though not impossible) to think of a single opinion poll which has found even a plurality, let alone a majority, endorsing Britain's giving up the pound. The British General Election Panels surveys show that, after Maastricht, opposition to Britain's adopting the single currency tended to harden. Attitudes to the euro bring out, in the most acute way, public ambivalence towards the European Union. They illustrate the contrast between general

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afﬁrmations of support for closer links with the Union and more grudging opinions on speciﬁc transfers of power from Britain and other member states to Europe. Even after Maastricht and the reaction which followed, there were still more people in Britain who favoured closer links than opposed them. As we have noted, however, support for closer links in general rarely translates into backing for the assumption of speciﬁc powers by the EU. The opinion polls have charted sentiment about the single currency with some regularity since the 1997 election. Their ﬁgures, while emphasizing the uphill ﬁght confronting the partisans of the euro, offer some encouragement to them. In 1998 opinion began to move towards participation in the single currency. In July, a MORI poll showed a split of 33 per cent in favour, and 50 per cent against; when the question was repeated with the condition that the government strongly urged Britain's joining, the gap fell to a mere 7 per cent (Riddell 1998). In early 1999, as the value of the euro fell on the exchanges, so did British support for participation. The new currency enjoyed a brief boost after its launch, and a month later, MORI, in a poll which distinguished between ‘strong support/strong opposition’ and ‘generally in favour but . . . /generally opposed but . . .’ showed a 1 per cent lead for the strong and conditional supporters combined (British Public Opinion 1999). By June, though, opponents led supporters by 57 per cent to 24 per cent (British Public Opinion 1999). The Euro elections seemed to endorse this negative view. Even in June, however, a further question asking people how they would vote if the British government were to strongly urge that Britain should join, showed a fall in the No majority to 19 per cent (British Public Opinion 1999). The experience of the referendum of June 1975, held to decide whether or not Britain should stay in the Common Market, offers europhiles a tantalizingly attractive precedent. In August Gallup asked respondents whether Britain had been right or wrong to join the Common Market; the number saying ‘Wrong’ led the ﬁeld by ﬁfty-three to thirty-one and those saying that in a referendum they would vote to leave outnumbered those who would vote to stay by 17 per cent. A further question, however, pointed to the overwhelming margin gained by the Yes camp in the actual referendum the following June. When people were asked how they would vote if the government negotiated terms for Britain's membership and thought it was in Britain's interests to stay, there was a 30 per cent plurality for staying in (Gallup 1974). There are, however, major contrasts between the climate of 1974/5 and that of the turn of the century. Poll questions have largely already discounted the effects of the government giving a clear recommendation to join the single currency, as the example of MORI's questions in June 1999 have shown. The difference is signiﬁcant, but smaller than that found in 1974. Opponents of the euro still held an emphatic lead. Moreover, of the two main parties in 1975, the Conservatives were ardently pressing a Yes vote, whilst Labour were split, a

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pattern that resulted in a huge vote for staying in by Conservatives and a divided vote by Labour supporters. In say, 2001, whilst one party is likely to be noisily in favour, the other is likely to be stridently hostile. There are grounds also for believing that voters will be less responsive to their party's lead in 2001 than they were in 1975. In 1974, 75 per cent of the electorate described themselves as Very Strong or Fairly Strong party identiﬁers. In 1997, the numbers fell to 58 per cent, with the fall in the Very Strong since the mid-1970s being especially sharp (Crewe and Thomson 1999). Then, too, by 2001 (assuming that Blair and his team are re-elected) the government's shine may have dulled. The devolution referendum in Scotland in 1979 shows that the backing of an unpopular government is a doubtful blessing. In sum, whilst voters may still come to approve British participation, the structure of opinion is far less propitious than it was to the advocates of staying in the Common Market.

Structural Distribution Key uses the term ‘structural distribution’ to refer to the way in which opinions are linked to basic social cleavages such as region, class, and age. The greater the consensus (in a quantitative sense), the less likely it is that opinions will mirror geographic or social divisions. Where opinion is marked by conﬂict, rather than consensus, though, opposing convictions will often reﬂect such divisions, albeit imperfectly. His chapter on the effects of occupational and class differences is the most germane to our own purposes (Key 1961: ch. 6), but interestingly, Key does not cover the two cleavages that have been most prominent in the evolution of British attitudes to Europe: party support and education.

Public Opinion and Party Support 1961–1983 Party loyalty, in the early phases of the controversy, was the major structural cleavage linked with opinion on the Common Market. Party supporters, whether distinguished by a simple intention of voting for a party at the next general election or the rather more stringent tests of party identiﬁcation, showed a willingness to follow the lead given by their party at the time or, alternatively, to react against the posture adopted by the party they most disliked (Spence 1976; Berrington 1975). Thus in December, 1962, just before General de Gaulle cast his veto against British membership of the Community, National Opinion Polls (NOP) showed that Conservative supporters of membership outnumbered Conservative opponents by 29 per cent; whilst among intending Labour voters the balance was the other way with 24 per cent more opposed to entry than approved of it. (NOP 1962).

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Public support for entry seems to have risen in the three to four years after the General's refusal and there was widespread approval of entry into the Common Market, with voters of all three parties showing agreement (NOP 1966a). The Labour manifesto of 1966 gave a cautious welcome to British membership and in November 1966 the government announced that it would test the water to see whether a British application to join the Community was likely to succeed. The Prime Minister and his Foreign Secretary, George Brown, began a tour of West European capitals to sound out the governments of the Six. In May of the following year, the government announced that it was making formal application to join. Edward Heath, a convinced European, now led the Conservatives. Public opinion began to show a marked change, with Conservative support for entry eroding, despite Mr Heath's endorsement, and majorities or at least pluralities of Labour voters continuing to back British entry. This experience qualiﬁes the view that ordinary voters took their cues on the issue from the party they supported. For Labour voters the Wilson government was a positive reference group but, though the Conservative Party remained keenly in favour of British membership, Conservative popular support began to ebb away. The likeliest explanation is that the voice of the Conservative Party went largely unheard during these months. The party in government beneﬁts from increased media exposure whilst the opposition has to struggle for its share of attention. Conservative voters saw only the spectacle of the disliked and distrusted Labour Prime Minister travelling to Rome and to Bonn, to Luxembourg and The Hague, to test the response of foreign governments to the new initiative. The still small voice of the Conservative Party went unheeded. Dislike of the opposite party, rather than liking one's own, may for some be the dominant inﬂuence. The Labour government's bid failed when General de Gaulle imposed a second veto. After this second rebuff a negative consensus formed against British entry (NOP 1969), only broken when the new Conservative government of Edward Heath applied in 1970 to join the Community. Conservative opposition at the popular level gradually faded, and then turned to heavy support, whereas Labour voters now showed consistent antagonism. The Conservatives lost ofﬁce to Labour in March 1974 and in the run-up to the referendum of 1975, Labour spoke with two voices: the Labour government, by a majority of the Cabinet, endorsed the renegotiated terms, whilst the Labour Party urged rejection. A close ﬁt between party allegiance and agreement with that party's policies (or disagreement with the opposition party's) can occur for at least three reasons. Voters may choose the party whose policies are the most congenial to them—the classic justiﬁcation of parties. Alternately, party leaders may adopt the policies favoured by their own supporters. Or, as seems most likely,

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electors may simply accept the proposals of the party they identify with (or reject those offered by their party's opponents). It would be hard, say, looking at the poll data in 1970/1, to argue that Conservative voters chose Mr Heath and his party because, at the time of the election, they wanted Britain to enter the EEC; or that Mr Heath was prompted to espouse entry because he discerned an unsatisﬁed yearning for British membership among Conservative electors. Conservatives in the country were still hostile to British entry ﬁve months after the start of negotiations with the Six (NOP 1971a). It was his initiative that eventually rallied ordinary Conservatives to his policy and repelled Labour voters, whose antagonism, fortiﬁed by their party's declaration of war against Britain's joining, persisted throughout the remainder of the negotiations, and beyond. (NOP 1971a, 1971b, 1971c, 1972b, 1972c). The crushing victory of the ‘Yes’ campaigners in 1975 seemed to put Britain's membership of the Community beyond all doubt. The Conservatives strongly backed a ‘Yes’ vote and 83 per cent of their followers voted to stay in the EEC. The Liberal Party was enthusiastically in favour and 67 per cent endorsed continued membership. Labour supporters, cross-pressured between their party's hostility and their government's approbation, divided much more evenly, with only 53 per cent voting ‘Yes’ (Gallup Poll 1975). However, the public mood soon soured. By late 1979, respondents who thought that British membership was ‘a bad thing’ outstripped those who regarded it as ‘ a good thing’ by more than two to one (Gallup 1979). Meanwhile, Labour suspicions of the Community grew again, partly fed by the leftward shift of the party in the closing years of the Labour government and the early Thatcher period. By the general election of 1983 the left had captured the party, and Labour's manifesto for the election committed the party to withdrawal from the Community. ‘Labour have turned their backs on Europe’ proclaimed Mrs Thatcher, whilst the electorate turned their backs on Labour.

Party Support and Europe after 1983 Under the former left-winger, Neil Kinnock, as party leader, Labour took the electorate's apparent message in 1983, and, at ﬁrst slowly, qualiﬁed its hostility, gradually adapting its approach, until by the early 1990s it had become the most clearly pro-European of the two big parties (Daniels 1998; George and Rosamond 1992). British Social Attitudes annual surveys from 1983 allow us to relate the growth of support for Britain staying in, to party allegiance. Table 6.2 shows that while both Conservatives and Alliance voters hardened in favour of continuing membership, it was Labour's partisans who took the big leap

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Table 6.2. Opinion on British Membership, 1983–1986, by Party Identiﬁcation (%) Year 1983 1984 1985 1986

Conservative Continue Withdraw 67 29 66 29 70 26 73 24

Labour Continue Withdraw 37 58 29 64 45 49 53 42

Sources: British Social Attitudes annual surveys (cross-section).

Alliance Continue Withdraw 57 42 50 43 63 33 63 33

Total Continue Withdraw 53 42 48 45 56 38 61 33

N 1,791 1,631 1,763 3,058

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forward. After an initial recession in 1984, support for British membership increased and by 1986 a majority of Labour identiﬁers had joined the pro-membership camp. The trend continued until the beginning of the 1990s; by 1989, measuring support by responses to the question whether the results of British membership had been bad or good, opinion was more favourable than at any time since Britain joined the Community in 1973 (Gallup 1989). A year later, on the eve of Maastricht, supporters of British membership outnumbered critics by more than four to one. The late 1980s, for Britain and its links with Europe, might be called ‘The Era of Good Feelings’. Both Flickinger and Rasmussen have argued that Labour's turnabout affords the most convincing explanation of the leap in the popularity of British membership in the late 1980s and early 1990s, and Evans has shown the importance of party, as late as 1995, as an inﬂuence on, or at least a correlate of, the opinions of the ‘hard core’—about one-third of the electorate—who had the most consistently held views on the subject (Flickinger 1995; Rasmussen 1997; Evans 1996). Unfortunately, British Social Attitudes stopped asking respondents whether they wanted Britain to stay in, or to leave, the Community, after 1991, though the question was asked in the British Election Study of 1992, and again in 1994 and 1997. Our inquiry is constrained by the availability of data in continuous form. To study the changes in opinion after 1991 we have to rely on a surrogate question. An elaborate question, in 1994 and after, which asked respondents not merely whether they wished Britain to stay in or withdraw, but whether they wanted the European Union to reduce or increase its powers (BEPS 1992, 1994, and 1997) does not cover the critical period from the high point of British endorsement in 1990/1 to the reaction after Maastricht. Three questions, however, were used throughout in 1990, 1993, and 1995. None is ideal. We chose the question ‘Do you think that closer links with Europe will strengthen or weaken the British economy?’, treating answers as surrogates for general support for closer integration. Table 6.3 charts the changes in sentiment about Europe, after Maastricht and the British withdrawal from the ERM. The entries show the percentage difference between those who thought that closer links with Europe made for a stronger economy in Britain, and those who thought that such links made for a weaker economy. In 1990, attitudes to British membership of the EEC furnish a striking example of Key's permissive consensus. Approval was high, and identiﬁers of all parties endorsed membership by big margins. There was no difference in the way their supporters reacted; by 1995, the position had been transformed. In 1990 a half of Conservative supporters thought that closer links would strengthen the British economy; ﬁve years later, that number had dropped to a quarter. Disillusionment after Maastricht, however,

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Table 6.3. Closer Links and the British Economy: Party Identiﬁers (%) Year

All Respondents Conservatives

Labour

1990 1993 1995

+35 +10 +11

+36 +17 +22

+37 +8 −2

Liberal Democrat +39 +2 +8

N 1,392 1,452 1,226

Sources: British Social Attitudes Surveys 1990, 1993, and 1995. Note: + indicates more people thought links made the economy stronger; − indicates the reverse.

stretched beyond the Conservatives; Labour supporters shared, though to a much lesser extent, in the erosion of conﬁdence in the EU, whilst the biggest paradox was furnished by the Liberal Democrats. If any party had shown enthusiasm for the European Union, it had been the old Liberal Party and their successors, the Liberal Democrats. The small samples are especially vulnerable to sampling error but results of this kind are perhaps not surprising, given the ﬂuidity of the party's support in the country. The party's line on Europe may simply not have been understood by its supporters. Thus, in the run-up to the referendum of 1975 Liberal respondents stood out in their ignorance of the party's commitment (Gallup 1975). Note, though, that the changes in the three years between 1990 and 1993 seem to have occurred among little more than a half of each party's supporters. Around 40 per cent of each party's identiﬁers chose the middle position ‘No difference’ to explain their views as to whether closer links made the British economy stronger.

Party and Europe: A Loosening Link? Overall, the movements of opinion in the 1990s suggest a fraying of the link between party and policy beliefs on Europe. The Conservative leadership temporized on the single currency until after the general election; Conservative electors nevertheless decisively rejected British adoption of the euro and on broader European policy they showed a marked lurch towards euroscepticism. Labour voters showed a less overwhelming, but still resounding opposition to the euro, and many of them also sought a reduction in the EU's powers. Whatever formal similarities there might be in the manifesto commitments of the two main parties, there was a difference of spirit in their approach. Labour's ebullience towards Europe did not leave a deep mark on their electoral followers. In the 1990s it became much harder to show that electors' choices on Europe reﬂected the stand taken by their party. The simple options of the

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1960s and 1970s ‘Do you think that Britain should join/stay in the EC or stay out/withdraw’ made it easy to test whether voters were following their party. In the 1990s the choices, except on the euro and that late in the day, became less clear-cut and parties themselves sought to evade embracing categorical alternatives.

Other Cleavages It would be easy to assume that the social divisions revealed by opinion surveys on Europe simply reﬂect party allegiance (or the stronger criterion of party identiﬁcation). Thus, in a period when Conservatives, following the cues from their party, supported British membership, we might expect middle-class, and the better educated, respondents to favour British membership and working-class, lesser educated voters to disapprove. At times when Labour electors supported British membership, and Conservatives opposed it, we might surmise to ﬁnd the reverse. The truth is more complex. Despite the importance of party support in shaping attitudes to Europe, the differences between the university-educated and others shine through; less clearly, more general educational and class divisions can sometimes be discerned. We have already seen that Conservatives in the early and mid-1980s were mostly in favour of Britain's remaining in the Community—not in itself surprising given that in 1983 there was a general election in which the two main parties were presenting opposite policies. The social class and education breakdowns20 show that this Conservative majority—more than two to one overall—for staying in the EC was reﬂected in every single subgroup, though with important variations. Whilst the middle-class groups were showing ratios of between two and three to one for staying in, the skilled manual workers mustered a bare majority; likewise, nearly two-ﬁfths of Conservatives leaving school at 15 or earlier wanted to withdraw from the Community, compared with fewer than one-ﬁfth of those going on to university. The changes, between 1983 and 1986, were fairly even across classes and educational strata, leaving the relative position much as before. Thus, almost a third of the respondents leaving school at 15 or earlier still chose withdrawal as their preferred option. Analysis of Labour respondents is hampered by the very small numbers of people in the higher social classes and higher educational groups admitting to a Labour identiﬁcation in 1983. People leaving school at 16 or younger were heavily in favour of withdrawal in 1983 whilst the small group of those ending their full-time education at 17 or later split two to one against this step.

20

The social class breakdowns are based on the Registrar-General's classiﬁcation, and the education breakdowns on the age of completing full-time education.

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The swing towards staying in the Community over the next three years was considerable, and even, across all subgroups. A narrow plurality of early school leavers were in the Continue camp by 1986, but those staying on at school beyond 16, or going to university, strengthened their stance with more than three-quarters seeking to stay in the Community. Amongst the SDP/Liberal Alliance, a formation notorious for the volatility of its support, we can trace the same class and educational split (BSA cross-sectional surveys 1983, 1986). The picture, then, in the early 1980s is one in which the class and educational minorities within the two big parties preferred a policy at odds with that of their party; whilst the classes in which the two parties found their centre of gravity endorsed, by big margins, the line espoused by their party leaderships. The later movement, over the next three years, towards acceptance of British membership seemed to be across the board (BSA cross-sectional surveys 1983, 1986). Support for staying in the Community accelerated in the late 1980s but after 1990 enthusiasm for Europe fell off, in the wake of Maastricht. Nevertheless, the educational cleavage lines remained in qualiﬁed form. To control for the effects of party identiﬁcation we show in Table 6.4 the attitudes of selected educational strata amongst Conservative and Labour identiﬁers, taken separately. Sampling error may account for some of the differences but the general message is clear. The central feature lies in the distinctiveness of the university-educated within each party. The broader tendency, found in the mid-1980s, for europhile sentiments to increase steadily as the level of education rises, is partial and blurred, whilst a university education constitutes a threshold above which proEuropean feeling grows dramatically. The contrast, especially after 1990, between degree-holders and the other educational strata is stark, a dissimilarity which holds good amongst adherents of both parties. The graduates apart, both Conservative and Labour supporters shared in the post-Maastricht disillusionment, but this mood made much more headway amongst Conservative than Labour identiﬁers. Perhaps the uncertainties at the top of the Conservative Party left its supporters on the ground free to consult their own instincts, whilst the faith of Labour partisans was fortiﬁed by the national party's new-found Europeanism. The last two years of John Major's premiership saw rank-and-ﬁle Conservatives swing towards euroscepticism even more heavily, and by 1997, Conservative discontent with the EU had become so massive that it is otiose to examine the reaction amongst different educational strata. Even the Conservative graduates deserted the cause, the difference between them and the unqualiﬁed being slight. On the Labour side, the University-educated still kept their commitment to Europe and there are some signs that, below the

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Table 6.4. Favourability Towards Europe: Closer Links and the British Economy by Year, Education and Major Party Identiﬁcation (% Favourable − % Unfavourable)

1990 1993 1995

Degree Con. +50 +42 +25

Lab. +77 +59 +63

Total +61 +36 +46

Professional Con. Lab. +53 +37 +7 +29 −10 +25

Total +40 +11 +4

Sources: British Social Attitudes Surveys 1990, 1993 and 1995.

O Level Con. Lab. +30 +33 +8 +30 −12 +12

Total +32 +16 +1

Unqualiﬁed Con. Lab. +33 +29 −2 +9 −4 +14

N Total +28 +2 +5

1,392 1,452 1,226

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graduate level, greater sympathy for the Union did increase with rising levels of educational achievement (BEPS 1992, 1997). The future of the pound seems to raise emotions that go far beyond those evoked by British membership of the European Union. Yet education, as an attribute which helps shape attitudes, remains conspicuous. Table 6.5 shows the distribution of support amongst graduates, and amongst the unqualiﬁed, broken down by party. Amongst the Conservatives, even the degree-holders can muster only minuscule backing for the single currency; the middle option ‘Use both’ attracts striking support, however, perhaps an example of the sophisticated person's escape clause. The unqualiﬁed, though, are all but united in their loyalty to the pound. Only a ﬁfth want to use both currencies and only 6 per cent were willing to see the euro replace the pound. On the Labour side, nearly half of the graduates approved of the single currency but only one in ﬁve of those who lacked any qualiﬁcations. Moreover, amongst identiﬁers of both parties, support for the single currency rises in near-linear fashion with education. A university education on this question is more than a simple threshold; each additional level of education seems to make its beneﬁciaries more receptive to the charms of the euro. Table 6.5. Education and the Single Currency, by 1997 Vote (%)

Degree Unqualiﬁed

Conservative Pro-Euro Use both 16 39 6 20

(N) Keep £ 45 74

31 114

Labour Pro-Euro 46 19

(N) Use both 36 25

Keep £ 18 56

28 230

Source: British General Election Panel Survey 1997. Note: ‘Don't knows’ and ‘No answer’ excluded.

From the Labour government's standpoint, though, these ﬁgures make bleak reading. Amongst both parties, graduates are a small minority of the electorate. Their organizational know-how may offset their small numbers to some extent, but that can hardly compensate for the huge preponderance of the unqualiﬁed—nearly a quarter of the sample amongst Conservatives, and not far off half amongst Labour identiﬁers. More encouraging for supporters of the euro, the better educated are more likely to vote in a referendum than the unqualiﬁed. Education probably helps to explain MORI's ﬁnding that supporters came out to vote in the European elections in greater proportions than did the general population (British Public Opinion 1999).

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Properties: Europe and Stability of Opinion Key looked at the properties of public opinion, such as intensity and stability. From the ﬁrst attempt to join the European Common Market, British public opinion on the issue has been ﬂuid. Butler and Stokes found that in the seven years between 1963 and 1970, public support for Britain's joining the EC ranged from a low of 18 per cent in 1970, to a high of 54 per cent in 1966 (Butler and Stokes 1974). Public volatility is not unusual on political issues in Britain. Sometimes, surface stability of opinion goes with considerable, largely self-cancelling changes at the individual level, a characteristic even found on issues that have been the staple of political controversy for many years. What have been distinctive about Europe as an issue are the dramatic net changes in public sentiment, as exempliﬁed in the ﬁndings of Butler and Stokes (1974). These net changes in opinion themselves are largely the result of volatility amongst the political élite. Most of the big movements of attitude, whether towards or against greater integration, have, at least until the 1990s, followed changes in the alignment of parties. Butler and Stokes ﬁrst highlighted the instability of public opinion on other issues in their path-breaking study Political Change in Britain, citing the question of nationalization, a perennial issue in British politics. The turnover of opinion on that and other questions was such that the authors concluded that ‘[the] changeability of attitude is a reﬂection of the sheer uncertainty that surrounds many people's beliefs’ (Butler and Stokes 1974: 282–3). British entry into the Common Market/European Community, in contrast to the nationalization of industry, was a novel issue in the early 1960s, when Britain ﬁrst applied for membership. The matter, said Butler and Stokes, was of unusual interest ‘because of the sharp ﬂuctuations in the balance of opinion’, adding: ‘There is no evidence that people felt very strongly about the issue or saw a great party difference on it’ (Butler and Stokes 1974: 309). It is hardly surprising that people tended to borrow their opinions on this topic from their party—or, as in 1967, to treat the party they most disliked as a negative guide. In the mid-1980s, volatility on this issue stayed high, according to the BSA Panel survey from 1983 to 1986. Table 6.6 shows the net movement of opinion, but the panel study helps us to capture some of the complexities of the apparent changes in attitude. Of our original sample of 769, only 408, or just over half, gave four answers to the question about British membership over the four interviews: 60 per cent gave the same answer on all four occasions; just under a quarter changed their view once and almost a sixth changed their minds twice. People were hardly more consistent in their party identiﬁcation: 38 per cent changed their party identiﬁcation at least once over the four waves of

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Table 6.6. British Membership of the EC, 1983 and 1986: To Stay or to Leave?(%) 1983 position Continue Withdraw Don't Know N

1986 position Continue 86 38 78 274

Withdraw 10 59 — 140

Don't know 4 3 22 16

N 223 198 9 430

Sources: British Social Attitudes Panel Survey 1983 to 1986.

interviews, almost as many as those who changed their opinions on Community membership. Indeed, only two-ﬁfths of the panel sample kept throughout to the same party identiﬁcation and the same opinion on British membership. Measurement error may account for some of these changes, especially where the opinion offered was not deeply grounded. However, though the issue of membership may have special features, there is nothing exceptional about the volatility of opinion. Conservatives, who had consistent signals coming from their own party, and whose party allegiance tended to be ﬁrmer than that of others, stood out in their commitment: 84 per cent gave the same response at each interview, or made the single change from Withdraw to Continue in line with the national party's long-held commitment; only 8 per cent changed more than once. Their steadfastness certainly contrasts with the ﬁckleness of Labour's identiﬁers. The Labour Party's change of front in these years was tacit, rather than open. The party admitted that withdrawal was no longer a realistic option but, for the time being, did not go beyond this grudging concurrence. Nearly a quarter of consistent Labour supporters changed more often than once, doubtless testimony to the national party's equivocation. On the other hand, among Alliance supporters, whose party showed no doubts on the question, almost as many as of Labour's partisans changed at least twice.

The Euro and Stability of Opinion ‘Public opinion’, writes the economist Anatole Kaletsky, ‘is overwhelmingly hostile to the single currency. But it is actually surprisingly volatile on the whole relationship with Europe’ (1999: 24). Both statements are right, but between them slur over the volatility of opinion on EMU itself. The British Election Panel Study asked people their views on the single currency in 1992, and again in 1994 and 1997. Offered four choices—adopt the euro, keep both

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the pound and the euro, keep the pound alone, and don't know—just 60 per cent gave the same answer after the two general elections. True, instability was much more pronounced amongst the 1992 supporters of the euro than among its opponents. More than half of the former had broken ranks ﬁve years later, whilst the pound's backers kept more than three-quarters of their following. Yet not even the advocates of keeping the pound as it stands can count on a reliable electoral following. It is easy to mistake a big preponderance of support, at a given moment, for unswerving commitment, as the opponents of Britain's continuance in the EEC in 1975, or the champions of closer integration in the early 1990s, both discovered to their cost.

Linkage Key's fourth aspect of public opinion, formation, raises issues that are too large to pursue here; the role of party has already been discussed at length. Linkage is the last of Key's ﬁve aspects of public opinion. It is one thing to describe the nature and distribution of opinion, another to show what it may mean for political outcomes. In Britain, on most questions, the ultimate mechanism for providing linkage between popular opinion and government decisions is a general election. On Europe, we must add the referendum—already used once to determine whether or not the country stayed in the EEC, and likely to be employed again to decide whether or not Britain adopts the single currency. Both elections and referendums pose a variant of the cynical question put by Stalin during the war: ‘The Pope? How many divisions has he?’ ‘Government may be regarded’, says Key, ‘as operating within a context of public opinion that conditions its actions’ (Key 1961: 423). The problem of linkage poses two questions. First, how far are politicians constrained by public opinion on European integration and, secondly, to what extent does mass opinion on the issue matter at all? There are indeed two kinds of constraint. There are those which come from politicians' perceptions of public opinion, which may often be wrong. And there are the pressures which arise from the actual character of public opinion (assuming, of course, its correct interpretation). Politicians are sometimes the victims of their own fears. The introduction of the breathalyser was preceded by anxieties about the reactions of motorists, which were allayed by public opinion polls showing big majorities for drastic action to cut road accidents (Taylor 1970 and NOP 1965). Sometimes politicians, aware of the shadow of contingency overhanging the outcome of every decision, prefer to trust their own gut feelings rather than listen to the seductive advice of the pollsters. Thus, the electorate's apparent

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response to Labour's tax proposals in 1992 dogged Labour's thinking on tax in 1997 (Butler and Kavanagh 1997). Such caution is magniﬁed by the electoral system, with its tendency to exaggerate, sometimes grossly, the effects of small movements of opinion. Politicians cannot afford to disregard the message of public opinion, even when that seems to be largely an echo of what they themselves have been saying. For public opinion on Europe never exactly replicates the declarations of the parties. There are always considerable minorities who do not share their party's attitude. Political leaders cannot ignore the possibility that a minority of their partisans who do not share their views may feel so intensely enough about an issue as to change their vote. When the ﬁnal decision is to be taken by referendum, such prudence becomes even more likely; for, on a single issue, voters can in principle choose without entertaining the question ‘Do I want this party, or the alternative, to govern for the next ﬁve years?’ Perceptions of public opinion, then, will always matter in a country whose leaders are chosen by competitive election; and public opinion itself will sometimes matter. Elections are often a blunt instrument for achieving the supremacy of the public will on a speciﬁc question. The contest is fought on numerous proposals and arouses feelings that may have little to do with the current manifestos presented by the parties. Even if there is widespread popular backing for a particular policy, few votes may change on the issue. The salience of the question may be low—as, historically, Europe has been. Moreover, a party may be unable to capitalize on its espousal of a popular proposal. The Conservatives in 1997 were closest to the public mood on Europe but the divisions within the party prevented them from reaping the reward their position might have otherwise gained: ‘the party's position’, says Evans, ‘was sufﬁciently polarised to offend both pro- and anti-integration voters simultaneously’ (1998b). Nevertheless, parties are under a compulsion to maximize their vote. The costs of adopting a speciﬁc policy, or through inertia ignoring some question on which people feel deeply, can be severe. Awareness of a substantial plurality of opinion in favour of one or other measure is likely to inﬂuence politicians to espouse it in their party's manifesto. Similarly, recognition of widespread disquiet about a party's propositions is likely to prompt some weakening of a commitment. Knowledge of public disenchantment with Maastricht swayed political leaders in the years before the 1997 election. The Labour Party, now the more pro-European of the two big parties, softened its europhile approach, and sought to disarm opposition to its predilection for the euro by promising a referendum on the matter. The need to carry out the promised referendum itself, however, lends importance to public opinion. In a wider sense, the issue of Europe could still

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instigate a major shift in voting decisions. Both the more general problem of relations with Europe, and the speciﬁc question of the single currency, now have the potential to sway many voters and so change the electoral balance. A MORI poll taken in July 1999, identiﬁed sixteen issues, and examined the opinions of those who thought a particular question was important. On only three, Europe being one, did more voters prefer the Conservatives to Labour: 30 per cent thought that the issue was Very Important, or Important, and of these 38 per cent thought that the Conservatives were better and only 26 per cent thought Labour. Amongst all electors, opinion was evenly divided (Riddell 1999). A sizeable proportion of the electorate now ﬁnd the issue salient, and of these signiﬁcantly more endorse the Conservatives than uphold Labour.

Conclusion Unlike the pattern of opinion in the six founder nations, British opinion has been marked, for most of the last forty years, not by consensus but by conﬂict. Nevertheless, the conﬂict has been of a curious kind, at one remove. British opinion on the issue seems to have acquired structure by proxy; the importance of party, apparently overarching, made attitudes highly volatile, so that almost every change of front by a party instigated corresponding changes in public opinion. The very novelty of the question seems to have left the ﬁeld clear for party. The periods of ‘permissive consensus’ have usually been short, but even here the support offered has taken the form of a general blessing, rather than a detailed mandate. When speciﬁc extensions of EU power are proposed public opinion reacts sharply. It is as though the electorate offered the government a blank cheque which it then stops as soon as the recipient tries to cash it. How much effect have negative consensus and, in default of consensus, negative pluralities had on major decisions? The electorate was in hostile mood for most of Mr Heath's term of ofﬁce but that did nothing to delay or thwart Britain's accession. The question mark about membership posed by Labour's decision to hold a referendum owed much to party manœuvres, very little to the polls. In between general elections there are no formal mechanisms to enable an adverse opinion of the electorate to overturn the will of a majority government. In default of a referendum, public opinion can only make itself felt if it seems to decision-makers that the costs and risks of espousing or implementing a contentious policy—whether in this case for or against closer integration—are too high. After the defeat of 1983 Labour dropped its call for withdrawal along with other reputedly damaging proposals. On the euro, a reckoning up of the costs and risks weighed with Labour's

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leaders and persuaded them to offer a referendum before a decision to join EMU was taken. It is that concession which is likely to defer, if not frustrate altogether, Britain's adoption of the single currency. The link between party afﬁliation and opinions on the EU remains strong but is far from being inexorable. The ties between party and opinion may be thin, and are often frayed. Indeed, over the long term (and sometimes the not so long term) voters have lacked consistent party leadership on the European question. Even where he has had clear-cut guidance, the voter may have been unaware of his party's stand. The polls in the earlier years of the controversy provide copious illustration of such innocence. He may misinterpret the information he does have; questions in the 1992–7 British Elections Study Panel showed the wide span of the perceptions that both Labour and Conservative supporters had of their party's standpoint in 1997, pointing to the idiosyncratic constructions some citizens have of the political world (BEPS 1997). Moreover, when we cite party identiﬁcation as the chain which links individual opinions to the policies of the national parties we must acknowledge voters' capacity for choice. People change their party identiﬁcation and change it not infrequently. Above all, commitment to a party has waned since the early 1970s. Such a decline is likely to weaken the responsiveness of voters to cues given by their parties. The expression of an opinion on Europe has been more than a routine response to a party allegiance laid down decades before. The increasing salience of Europe as an issue can hardly do other than reinforce such tendencies. If voters are ﬁckle, so sometimes are the parties, and the messages that parties send are sometimes opaque—often, deliberately so. Moreover, contradiction between party and individual doubtless occurs partly because the issue has an independent status in the minds of some citizens, with information drawn from sources outside the parties. The links between party and citizen are subtle, not mechanical. Changes in popular attitudes towards Europe have usually been like the revolving door of a hotel entrance. As one party declares its support, its adherents push open the door into the hotel foyer, as the followers of the other make for the exit. The exceptions, such as when Labour softened its stand after the 1983 election, were uncommon until Maastricht. The aftermath of the treaty saw a simultaneous fall in europhile sentiment amongst both Conservative and Labour voters, although the change was much sharper amongst Conservatives. Many voters checked out of the hotel, as it were, regardless of their own party's stance, a novel pattern which lends force to those who discern the rise, independent of party cues, of a new cleavage over Europe. The role of party in this controversy has served to mask more deep-lying sources of division. Important though party identiﬁcation has been for the

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adoption of attitudes to European integration, there is much that it cannot explain. Even at the height of party inﬂuence on opinion, millions of people held views which were the opposite of the policy of the party with which they identiﬁed. Although some of these dissenters would have been unaware of the stand taken by their party, the persistence of social cleavages suggests that many consciously adhered to the propositions rejected (for the time being) by their party. As early as 1975, despite ﬂuctuations in the level and party composition of support, it was clear that there were marked similarities in the attitudes of different sections of the electorate. ‘Age, sex and social class are all related to party allegiance; it is the more remarkable therefore that there have been striking continuities in the relative position of different social groups’ (Berrington 1975: 6). A quarter of a century later, the same judgment could be made. ‘The changing positions of the parties’, writes Geoffrey Evans, ‘do not seem to have affected the relative appeal of European integration to different social groups, which suggests that orientations to Europe are not merely partisan reﬂections of party positions’ (Evans 1999). Despite the shifts of parties on the issue, despite drastic changes in the overall popularity of closer integration with Europe, various educational groups, or the linked social classes, have arranged their attitudes to the issue in the same order over forty years of controversy.21 What the impact of party does is to magnify or lessen the potential electoral weight of such sections. So, for example, in 1967, when Labour espoused entry into the EEC, the balance in favour of seeking membership amongst the ABs was 16 per cent, among the DEs the balance against was 18 per cent. The spread of opinion between these two classes was much lower than in August 1972, when Britain's accession, under the leadership of Edward Heath, was only ﬁve months away. At this time the ABs stood at plus 39, the DEs at minus 35. Labour advocacy softens, though does not erase, divisions such as those of social class. Conservative sponsorship has a polarizing effect. Thus, party endorsement of a particular European policy, provokes an across-the-board rise or fall in support, leaving the relative placing of different sections unchanged. So, the growth of approval for contined British membership after 1983 occurred with roughly equal magnitude across all the class and educational groups. Thus, responsiveness to party seems to be distributed indifferently and equally amongst the various educational strata. The emphasis on party obscures as much as it reveals. Volatility amongst individuals tends to hide the continuities displayed by social groups.

21

Evans's estimates of the orientation to Europe of different classes are based upon responses to questions put after successive general elections since 1964. Most of the data cited in this chapter are drawn from surveys (often conducted by commercial polling organizations) taken between elections. There is a striking parallelism between the patterns displayed in interviews after general elections and those shown between elections.

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The question is whether the educational (and class) cleavages can sustain the growth of a popular opinion on Europe, independent of party. Evans notes the rise in 1997 of Europe as an issue, able to shape loyalties to parties, so reversing the pattern of several decades. One effect is to modify further the traditional class basis of politics, with Labour able to attract additional votes in the salariat, and the Conservatives able to draw new support from the working class. Evans accepts that so far the impact has been small. Yet the very dynamism of the European Union has shown a capacity to discompose the conventional assumptions and snug certainties of British politics. In the past, political analysts and commentators used to look searchingly within the British body politic for auguries about the future of the British polity. Perhaps they should now look eastward across the sea.

References Baker, D., Gamble, A., and Ludlam, S. (1993). ‘1846 . . . 1906 . . . 1996? Conservative Splits and European Integration’, Political Quarterly, 64/4: 420–34. Berrington, H. (1975). ‘Public Opinion and the Common Market’ (Universities Association for Contemporary European Studies) mimeo. —— and Hague, R. (1998). ‘Europe, Thatcherism and Traditionalism: Opinion, Rebellion and the Maastricht Treaty in the Backbench Conservative Party 1992–1994’, in H. Berrington (ed.), Britain in the Nineties: The Politics of Paradox (London: Frank Cass). British Public Opinion (1999). June/July, 22/5. Butler, D., and Kavanagh, D. (1997). The British General Election of 1997 (Basingstoke and London: Macmillan). —— and Stokes, D. (1974). Political Change in Britain, 2nd edn. (Basingstoke and London: Macmillan). Carroll, L. (1938) Alice's Adventures in Wonderland (London: Macmillan; 1st publ. 1865). Crewe, I., and Thomson, K. (1999). ‘Party Loyalties: Dealignment or Realignment?’ in G. Evans and P. Norris (eds.), Critical Elections: British Parties and Voters in Long-Term Perspective (London: Sage). Daniels, P. (1998). ‘From Hostility to “Constructive Engagement”: The Europeanisation of the Labour Party’, in H. Berrington (ed.), Britain in the Nineties: The Politics of Paradox (London: Frank Cass). Data Archive (n.d.). British Social Attitudes Surveys: 1983–1995 (Colchester: University of Essex). —— and ESRC (1997). British Election Studies: 1997 (Colchester: University of Essex). —— and London Guildhall University (1996). British Election Studies: 1992 (Colchester: University of Essex).

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Evans, G. (1996). ‘The State of the Union: Attitudes towards Europe’, in R. Jowell, J. Curtice, A. Park, and L. Brook (eds.), British Social Attitudes: The 12th Report (Aldershot: Ashgate). —— (1998a). ‘How Britain Views the EU’, in R Jowell et al. (eds.), British—and European—Social Attitudes: The 15th Report (Aldershot: Ashgate). —— (1998b). ‘Euroscepticism and Conservative Electoral Support: How an Asset Became a Liability’, British Journal of Political Science, 28/4: 573–90. —— (1999). ‘Europe: A New Electoral Cleavage?’, in G. Evans and P. Norris (eds.), Critical Elections: British Parties and Voters in Long-Term Perspective (London: Sage). Flickinger, R. S. (1995). ‘British Political Parties and Public Attitudes towards the European Community: Leading, Following or Getting Out of the Way?’, in D. Broughton, M. Farrell, D. Denver, and C. Rallings (eds.), British Elections and Parties Yearbook 1994 (London: Frank Cass). Gallup Political Index (1974). (London: British Institute of Public Opinion, Aug.) —— (1975). (London: British Institute of Public Opinion). —— (1979). (London: British Institute of Public Opinion, Oct). —— (1989). (London: British Institute of Public Opinion). Gallup Poll (1975). Daily Telegraph (8 June). George, S., and Rosamond, B. (1992). ‘The European Community’, in M. Smith and J. Spear, The Changing Labour Party (London: Routledge). Hames, T. (1999). The Times (15 June). Hix, S. (1999). The Political System of the European Union (Basingstoke and London: Macmillan). Independent (1999). 24 June. Kaletsky, A. (1999). The Times (16 Sept). Key, V. O., Jun. (1961). Public Opinion and American Democracy (New York: A. A. Knopf). Lindberg, L., and Scheingold, S. (1970). Europe's Would-Be Polity: Patterns of Change in the European Community (Cambridge, Mass.: Harvard University Press). Market Opinion and Research International (1991). Sunday Times (24 Nov.). National Opinion Polls (1961). Daily Mail (5 Oct.). —— (1982). Daily Mail (7 Dec.). —— (1965). NOP Bulletin (Aug.). —— (1966a). NOP Bulletin (July). —— (1966b). NOP Bulletin (Nov.). —— (1967a). NOP Bulletin (July). —— (1967b). NOP Bulletin (Nov.). —— (1969). NOP Bulletin (Nov.). —— (1971a). NOP Bulletin (Mar.). —— (1971b). NOP Bulletin (July). —— (1971c). NOP Bulletin (Sept./Oct.). —— (1972a). NOP Bulletin (Apr.). —— (1972b). NOP Bulletin (Aug.). —— (1972c). NOP Bulletin (Oct.). —— (1999). Independent (24 June).

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Observer (1991). 17 Nov. Rallings, C., and Thrasher, M. (1997). Sunday Times (5 Oct.). —— and —— (1998). Sunday Times (19 Apr.). Rasmussen, J. G. (1997). ‘ “What Kind of Vision is That?” British Public Attitudes towards the European Community during the Thatcher Era’, British Journal of Political Science, 27/1: 111–19. Riddell, P. (1998). The Times (1 Dec.). —— (1999). The Times (29 July). Spence, J. (1976). ‘Movements in the Public Mood: 1961–75’, in R. Jowell and G. Hoinville (eds.), Britain into Europe: Public Opinion and the EEC 1961–75 (London: Croom Helm). Taylor, H. (1970). ‘The Power of the Polls’, New Society (19 Mar.). Watson, R. (1999). The Times (27 Feb.).

II Social Science and the EU

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7 Policy-Making in the EU: Familiar Ambitions in Unfamiliar 22

Jeremy Richardson

Introduction: Public Policy in the EU ‘Hollow Core’ The most distinctive feature (and probably the most ignored) of the European Union is the absence of a recognizable government. Thus, European governance, rather than government, is clearly the most appropriate label for a system of policy-making which displays a considerable diffusion of power. Public policy analysts in Western Europe are more used to studying political systems, or states, which are directed, more or less, by elected governments drawn from one or more established political parties. The combination of party and government gives coherence to public policymaking in varying degrees, but, commonly, we have seen programmatic government in most Western European states in the post-war period. For example, Mrs Thatcher's government, ﬁrst elected in 1979, had a recognizable programme of reform, albeit tempered by exogenous factors, opportunism, and even learning over time. If we take an extreme example of programmatic government, Sweden, we can see a state driven by a consistent ideology, leading to a vast programme of public policy-making, for most of the post-war period (Richardson 2001). There is much talk of the ‘new governance’ in political science, but elected governments are still the core of the modern state. Indeed, one might argue that Western Europe has seen more government, not less, in the 1980s and 1990s. Although it is fashionable to talk of the hollowing out of the state, in fact we have seen governments more inclined to impose new policies and programmes against the protestations of vested interests (Richardson 1994) than in the post-war decades during which welfare states were constructed. However, at the EU level, it is difﬁcult to see either European-level parties (Hix and Lord 1997) or the Council of Ministers (Hayes-Renshaw and

22

The author wishes to acknowledge the support of the Nufﬁeld Foundation.

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Wallace 1997) performing the same ‘steering’ functions as parties and governments at the national level. European parties remain weak purveyors of public policy programmes and the Council of Ministers is more a site for disputation and resolution of radically different policy programmes and ideologies than an institution trying to introduce and implement a more or less recognizable programme of public policy. As Héritier suggests, the total mass of European policy represents a bewildering ‘patchwork’ of regulatory approaches and styles (Héritier 1999). Even in any one policy area, it is often difﬁcult to see the undiluted imprint of any one member state. In EU environmental policy, for example, it is often thought that Britain always is on the losing side of disputes with other member states. In practice, however, the patchwork principal is evident here too. The Council of Ministers makes even the most divided national governmental coalition look united. Even fundamental issues about the architecture of the state and the relative powers of the institutions of governance within it are subject to bitter and continuous dispute—hence the ﬁghts over widening and deepening, federalism and subsidiarity, one-speed or multi-speed Europe, and so on. At the more mundane public policy level, there is often very little agreement about the basic principles which underlie approaches to speciﬁc public policy problems. Similarly there is often bitter dispute over the speciﬁc policy instruments to be adopted, even when a compromise on principles has been reached. The Council of Ministers is more about ‘frame reﬂection’ (the resolution of conﬂicts about how the real world is deﬁned and understood via speciﬁc policy or cultural frames—see Schön and Rein 1994; Fligstein 1996) than about the application of an agreed policy frame to a public policy problem. An additional unique feature of the European Union is the absence of a European-level mass media. Public policy analysts in Western Europe are used to studying the public policy process in which the media plays a crucial role, the so-called ‘third estate’. There is an increased sensitivity about the general image of the European institutions and a particular anxiety within the Commission to be seen as a user- (and citizen-) friendly institution, but it is difﬁcult to imagine Commission or Council ofﬁcials scanning the European media each day to gauge public reaction to particular policy proposals. They are deeply concerned about specialized publics and much less so about electorates. Similarly, interest-group politics, though beginning to address some specialized European-level media, is generally much less concerned with manipulating public opinion via the mass media than is the case in most member states (see Mazey and Richardson 1999: 119–21). There are exceptions, such as the environmental movement, but interest-group politics is heavily concentrated on the Union's institutional venues—almost the private management of public business with which we are familiar at the national level (Richardson and Jordan 1979).

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It is, therefore, reasonable to see the European Union as a sui generis policy-making system, if only because it lacks many of the common features of the inner policy-steering core of West European states. Indeed, it could be argued that the EU has a ‘hollow’ core surrounded by a dense institutional structure, rather than a central core steering the system as a whole. As Dyson's sophisticated analysis of the process of monetary union suggests, the Union can sometimes lack key actors who can orchestrate the policy process according to some kind of grand plan, even in such important areas as monetary policy (Dyson 1994: 331–2). My central argument here is that the EU does lack one traditional central actor, an elected government, normally regarded as the key player in shaping winning coalitions or, indeed, imposing policy solutions against the wishes of opposing coalitions. Despite the absence of a conventional inner core performing the function of steering the state, some fairly predictable behaviours have emerged to enable a critical mass of European public policy to emerge over time. European public policy is now sufﬁciently broad in its scope and detailed in its impact for us to claim that it is now a ‘mature’ public policy system. It is mature in at least two senses. First, it has developed a dense and thick institutionalization of public policy-making. Notwithstanding the absence of a government, the familiar institutional paraphernalia of the modern state have emerged. Secondly, much of EU public policy-making is now a sufﬁciently continuous and ongoing business for it to become routine. The EU has reached that stage whereby public policy is its own ‘cause’ (Wildavsky 1979: 62–85). Thus, the European policy process is now as much about building on and ﬁne tuning past policy—and dealing with the problems created by past European policy—as it is about creating a whole new European policy framework. So dense is the amount of European public policy that we might need to refocus our attention, as policy analysts, away from processes by which a European ‘public policy state’ is being created towards the much more familiar ‘policymaking at the margins’. The rather sterile debates between neo-functionalists and liberal intergovernmentalists may be much less important than trying to understand the complex web of interactions between public policy professionals. Thus, the tools used by public policy analysts, organization theorists, and possibly anthropologists might be more relevant. The more the Union shifts from a process of polity building to polity maintenance, the more we might expect to see traditional key players in the policy process—particularly bureaucrats and interest groups—further increase their importance and, indeed, behave in ways familiar from the national level. Sui generis the EU might be, but some of the key actors are old friends to the policy analyst and bring to the new supranational policy game a whole raft of past experiences and familiar ‘ways of doing things’. The institutional setting is new, but the usual key actors in this policy process are merely adapting to

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a new arena, venue, or site for making public policy. In doing so, resorting to familiar behaviours is perfectly normal and is to be expected. The presence of these old friends also means that the conceptual tools which have been used to study public policy at the national level might also be appropriate for analysing the EU policy process. It is a paradox that, despite the absence of some familiar institutional features—effective parties and a government—the tools used for studying national government remain relevant. This chapter will, therefore, examine the behaviour of the Commission and interest groups and outline the procedural ambitions of the Commission in terms of its desire to maximize its legitimacy and create stable policy environments. Both the behaviour of interest groups and the Commission can be understood using familiar concepts of policy analysis. However, it will be argued that familiar procedural ambitions, which might lead to a system of policy community policy-making in the EU, will be difﬁcult to achieve in practice. The most likely outcome is a disjointed policy system, which exhibits features of policy community and garbage can politics.

Predictable Behaviour: Creating a ‘European Policy State’ In this chapter, I focus on two sets of policy stakeholders who have traditionally worked together in West European states to shape and inﬂuence public policy: bureaucrats and interest groups. My central thesis is that these two sets of actors increasingly ﬁll the ‘hollow core’ of the European Union (Mazey and Richardson 1993, 2001a) and provide much of the impetus for European-level policy-making. They also play a key role in policy maintenance. In ﬁlling the hollow core, these actors are engaged in a process of institutionalization which follows a very familiar West European pattern (Mazey and Richardson 2001b). This process of institutionalization is occurring because these actors habitually behave in certain ways, almost irrespective of the institutional architecture of a particular state. Three theoretical assumptions can be made about how the European level policy system would be constructed, maintained, and institutionalized, as follows: • • •

Bureaucracies have a tendency to construct stable and manageable relationships with interest groups in each policy domain as a means of securing some kind of ‘negotiated order’ or stable public policy environment. Interest groups generally exhibit a preference for state bureaucracies as a venue for informing themselves about and inﬂuencing public policy. Interest groups will seek to exploit new opportunity structures or venues as a means of maximizing their capacity to shape public policy to their own advantage.

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I am suggesting that different types of actors have associated behavioural patterns—or at least exhibit procedural ambitions (Richardson and Jordan, 1979)—which condition and structure their behaviour in the real world. Crucially, the procedural ambitions which have been so evident in the postwar decades in Western Europe are being replicated at the European level. In practice, the institutionalization of policy-making at the European level can be described and explained in terms of some conceptual and theoretical tools commonly utilized for the study of national policy-making. This is not to suggest that understanding the European Union policy process is simply a matter of transposing analytical concepts and models from the national to the supranational level. For a start, one needs to be really sure that they are sufﬁciently robust to explain even the simpler national policy-making processes (see discussion below). Secondly, one of the key questions to be addressed by policy researchers analysing the EU level is the degree to which the procedural ambitions we describe can be fulﬁlled when there are multiple venues, often large numbers of policy stakeholders carrying with them a multitude of policy frames and many actors being granted participation rights. Part of the explanation for the emergence of familiar patterns of behaviour and familiar forms of institutionalization is that innovation is rarely all that innovative. Borrowing from past experience is common, even if it is sometimes inappropriate (Rose 1993). Moreover, if the basic problems to be solved are familiar, there is a perfectly natural tendency to try approaches that have worked in the past. Just as armies are often prepared to ﬁght the last war, so policy actors are prepared to rerun old procedures and try old institutions in new settings. Moreover, the central problem for policy-making élites is the same everywhere. It is how to combine effective problem solving with a sufﬁcient degree of consensus that policy solutions can stand a reasonable chance of being implemented in the real world. Support for policy change has to be mobilized at some point, even in the most dirigiste of systems. The very complexity of the EU, as a policy-making system for ﬁfteen very different member states, underlines the need to construct institutions for both problem-solving and consensus-building if any public policy outputs are likely to emerge. The policy process is not simply about solving public policy problems in a technical sense. It is about constructing consensus in society and mobilizing political support over time. This pressing need to ﬁnd workable solutions and mobilize support for them amongst a diverse range of stakeholders, combined with some ‘natural’ attributes of bureaucracies and interest groups, has produced some rather familiar patterns of institutionalization in the EU.

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The Commission as a ‘Downsian’ Bureaucracy Modern bureaucracies have been adept at building effective relationships with other policy stakeholders (see Page in Chapter 9 below). The European Commission is no exception. As Anthony Downs would have predicted, the Commission has managed to generate external support for its activities, particularly in the construction of a supportive constituency of special interests with whom it can develop ‘professional’ relations (Downs 1967: 7). Moreover, as Lehmbruch suggests, this typical bureaucratic behaviour can be effective in linking macro- and meso-levels in political systems—something we can see as especially important in the EU. As he puts it, ‘in critical junctures state bureaucracies have often played an important formative part of their own . . . interactions of governmental bureaucracies with associations or other corporate economic actors seem to be of crucial importance in linking macroand meso-levels and result in the emergence of network conﬁgurations which eventually become institutionalized’ (Lehmbruch 1991: 136). Alongside consistent attempts to conﬁgure various forms of policy communities and networks (a clear procedural ambition), the Commission has had a keen sense of ‘territoriality’ (Downs 1967) and has tried to create new policy spaces or domains, over time, often via a pattern of soft law followed by hard law (see Cram 1997). New and expanded policy domains have been constructed with the help and participation of a vast array of interest organizations, encouraged by the Commission's singularly open style of policymaking. As Cram characterizes it (following Klein and O'Higgins 1985), the Commission has been a classic ‘purposeful opportunist’ and has fully exploited its Treaty-based powers as the policy ‘engine’ of the Union (Cram 1994). The Commission's purposeful opportunism has been implemented by resort to equally familiar traits of modern bureaucracies. Not only has it worked hard to create a favourably disposed constituency of interests by its very open and accessible style of policy-making and by ‘supplying’ the Euro-level regulation for which these interests have generated the ‘demand’ (see Sandholtz and Stone Sweet 1998), it has also resorted to certain policymaking techniques problems which are very familiar in developed polities. Thus, it has been adept at depoliticizing issues —what Habermas termed the ‘scientisation of politics’ (1971: 79–80)—so that high-salience issues could be processed as essentially technical and resolved by fellow professionals. The emergence of some kind of European regulatory state (Majone 1996) or of a ‘technocratic’ Europe (Radaelli 1999) are all part of a depoliticization process rather familiar in highly industrialized, and post-industrialized, democracies. This is also part of the familiar phenomenon of ‘sectorization’ of policy-making

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which usually leads to a process of intrasectoral bargaining between fellow professionals (Jordan and Richardson 1982). Yet another aspect of what we already know about policy making and bureaucracies at the national level also applies to the Commission—the need to gather technical and ‘political’ information about the external world. As Austen-Smith and Wright demonstrate, lobbying is an exercise in strategic information transmission. In a passage of special relevance to analyses of the European Union, they argue that ‘lobbying performs an important function in representative systems where public opinion is often too inchoate, and the political parties too heterogeneous, for legislators to be fully informed through these mechanisms alone’ (Austen-Smith and Wright 1992: 245). This is why, they suggest, Congress has been so reluctant to effectively regulate lobbying—its informational value is sufﬁciently high for members of Congress to want more, not less of it! This is exactly the position of the Commission in regard to the possible regulation of lobbying in Brussels: it has been extremely reluctant to do anything which would restrict the access of interest groups to Commission ofﬁcials and has little incentive to do so (see Richardson and Mazey 2001b). Rather, it has steadfastly clung to its policy of open, unrestricted access (Commission 1992). The advantage, for the Commission, in sectorizing and institutionalizing policy-making in a symbiotic relationship with interest groups is not just the production of more effective European policies, supported by powerful interests. It is also part of a typical process of bureaucratic risk reduction. As Henderson noted in his study of British policy disasters (Henderson 1977), by seating the appropriate stakeholders at the appropriate seats, bureaucrats can avoid blame for future policy failures or ﬁascos. The ‘collectivization’ of policy-making is also the collectivization of future blame, as well as a means of securing greater legitimacy here and now. The concept of the lonely dirigiste bureaucrat is alien at both the national and the European levels. Lock-in, not lock-out, is the norm. Commission bureaucrats seek to lock in a range of stakeholders in a more or less permanent and symbiotic relationship. The incentives for this lock-in strategy are especially great at the European level simply because of its characteristically multi-venue policy process (Baumgartner and Jones 1993). Where different venues are available for the raising (and eventual resolution) of policy conﬂicts, there is a real danger that cognitive gaps will occur between the dominant actors in each venue. In the EU it is not just the parliament that moves physically from one site to another. Habitually, policy issues shift between venues, with the policy cycle replicated at each, as the European policy ‘caravan’ rolls on. There is a risk that stalemate will result as policy issues move from one venue to the next. As one interviewee put it, ‘normally the Parliament is less expert than the Commission and we have to ﬁght the whole f——g thing from ﬁrst principles’

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(unattributable interview, Brussels, July 1999). The Commission, as the main institution responsible for initiating policy change, has every incentive to invest heavily in constructing and supporting advocacy coalitions (Sabatier 1998) within its own venue, as these coalitions can be effective carriers of ideas, arguments and ‘policy frames’ when the policy process shifts to other institutional sites (Dudley and Richardson 1998). This brief review of the Union's bureaucracy, therefore, can conclude by suggesting that what we see empirically is what one might expect from what is already known from theories of bureaucratic behaviour—a rather clear ‘yes’, in terms of the applicability of national models of analysis.

Interest Groups, Bureaucracy, and Venue Shopping The European interest group ‘story’ leads us to very similar conclusions—much of what we know about interest group behaviour seems to be replicated within the European Union. Similarly, many of the conceptual tools for analysing this behaviour have some utility at the European level. By and large, interest groups are rational actors—they allocate lobbying resources in ways which maximize their likely public policy beneﬁts. For example, Snyder's spatial voting model of lobbyists, who are able to buy legislators' votes on bills in order to change the status quo, concluded that lobbyists make rational calculations when offering bribes. Bribes would not be wasted on committed supporters in the legislature. Nor would they be wasted on implacable opponents—they would be concentrated on those legislators who were slightly opposed to the proposed change (Snyder 1991: 95). Similarly, groups are able to make rational calculations regarding the allocation of lobbying resources between the different lobbying arenas or venues as they do in the USA (Baumgartner and Jones 1993). In the context of West European states, it is well known that interest groups often exhibit quite strong preferences for the bureaucratic venue. The incentives to allocate greater resources here are clear. First, use of the bureaucratic venue enables issues to be processed away from the glare of publicity and reduces the likely involvement and impact of a wider set of interests. Secondly, the bureaucratic arena is, classically, concerned with much of the detailed policy work that concerns interest groups and which they have the greatest hope of inﬂuencing. They usually accept the right of the government to determine and impose the broad principles of public policy but demand (and usually get) the right to bargain over the detail. Thirdly, the bureaucratic arena is a reliable source of information—and lobbying is often as much about informing a group about likely policy change as it is about actually inﬂuencing that policy change. Groups often ‘lobby’ in order to minimize surprises, rather than in the hope of changing the world.

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It is no surprise, therefore, that we can ﬁnd the steady emergence of a system of regularized and perhaps symbiotic relations between interest groups and the Commission. As Coen suggests, ‘while ﬁrms seek to utilise and inﬂuence all the political channels available, the perceptions from interviews and surveys indicate that direct lobbying of the Commission was regarded as the best means of inﬂuencing the European policy process’ (1999: 4; see also Coen 1998, 1997; see also Butt Phillip and Porter 1997; Butt Phillip and Grey 1997). Thus, Coen (1998) sees some kind of ‘elite pluralism’ emerging, centred around the Commission. Whilst no one would suggest that interest groups focus only on the Commission, it is not just ﬁrms who have a predilection for the bureaucratic embrace. For example, environmental groups have traditionally developed symbiotic relations with what is now termed the Directorate General for Environment (previously DG XI) and might at times have become too dependent on that particular DG (Mazey and Richardson 1992). Having recognized this dependency, these groups have made great efforts to become integrated into the policy processes of other DGs as part of their strategy of ‘mainstreaming’ the environment. Similar phenomena are evident with women's groups. They have very strong links with the Directorate General for Employment and Social Affairs but also make greater efforts to develop good relations with other relevant Directorates General (Mazey 1998). The Commission's willingness to embrace groups in the furtherance of its own interests has, therefore, been matched by the familiar enthusiasm of groups for bureaucratic processes and institutions as a means of inﬂuencing public policy. Again, we see familiar national patterns of behaviour emerging at the Euro level. A second familiar phenomenon is the perception of the EU itself as an attractive new opportunity structure or venue, in addition to traditional domestic lobbying. The very clear empirical evidence that there has been a massive degree of interest group mobilization at the European level is consistent with both social-movement literature on opportunity structures and the literature on interest group ‘venue shopping’. New opportunity structures (Kitschelt 1986) can appear which then present the possibility of a different stakeholder bias in institutional power (Lindblom 1977; Dahl 1982; McAdam 1996). Interest groups will seek to exploit (and sometimes create) new opportunity structures, or venues, which they believe will maximize their chances of public policy pay-offs. Research on opportunity structures has sought to show how changes in some aspects of a political system create new possibilities for collective action (McAdam et al. 1996: 17). Compared with most of the member states (the federal and judicialized German polity being a clear exception perhaps), the EC/EU as a polity presents an American-style plethora of opportunity structures for interest groups. The creation of the EC/EU has, therefore, created a quite new opportunity for what

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Baumgartner and Jones (1991, 1993) term ‘venue shopping’ by national and cross-national interest group actors in Europe (not all of whom, of course, are ‘European’). Venue shopping is part of the explanation of the growth in EC/EU-level interest group formation and lobbying outlined below. As Baumgartner and Jones (1993: 18) suggest, political actors are capable of strategic action by employing a dual strategy as follows: ‘On the one hand they try to control the prevailing image of the policy problem through the use of rhetoric, symbols and policy analysis. On the other hand, they try to alter the roster of participants who are involved in the issue by seeking out the most favourable venue for consideration of these issues.’ Baumgartner and Jones developed the ‘venue shopping’ thesis from their study of nuclear-energy politics in the USA. Other policy areas in the USA have exhibited the same phenomenon whereby groups seek to exploit image and venue opportunities. As Fritschler argues in his study of smoking and politics, ‘public interest politics uses the policy-making power of legislatures, bureacracies, and the courts in patterns of conﬂict inducing strategies’ (Fritschler 1975: 3). The exploitation of the EU venue by interest groups may be part of a much wider phenomenon of global venue shopping, suggested by Keck and Sikkink, whereby groups seek points of leverage (Keck and Sikkink 1998: 200). The gradual shift in focus of interest groups towards the EU is due to the simple fact that national governments have transferred sovereignty over large areas of public policy-making to the EC/EU level. This is not to suggest that the domestic channel has been abandoned. Member states still have too much power in the EU policy process for that to be a sensible strategy. However, the very involvement of interest groups in transnational settings, such as the EC/EU, itself contributes to the shift in sovereignty, whether or not states (individually or collectively) see it as in their interest. Thus, in their study of activists beyond borders Keck and Sikkink (1998) argue that ‘by this blurring of the boundaries between a state's relations with its own nationals and the recourse both citizens and states have to the international systems, advocacy networks are helping to transform the practice of national sovereignty’. This is a subtle process, the core of which is the ‘production, exchange, and strategic use of information’ (Keck and Sikkink 1998: p. x). Transnational networks of private actors can help ‘reframe international and domestic debates’ and introduce ‘new ideas, norms and identities in the international system’ (Keck and Sikkink 1998: p. x). Though their study focuses on a particular type of transnational actor (such as environmental, human rights, and women's groups), much the same conclusions could be reached by studying the behaviour of more conventional groups, such as ﬁrms (Coen 1997, 1998) in the EC/EU. A central argument in the Keck and Sikkink thesis is the autonomy from states which transnational action can deliver to activists and

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interest groups. The EU represents a venue where, for many interest groups, the public policy pay-off is likely to be greater than at the national level. This seems to be as true for big ﬁrms (Coen 1997, 1998) as it is for apparently ‘weaker’ and less well resourced groups such as women's organizations (Mazey 1998). As with the brief review of the Commission, I can, therefore, conclude by suggesting that the concepts used to analyse interest group behaviour within nation states seem rather useful and apposite at the European level too. Theoretical predictions and empirical data seem to ﬁt rather well. Procedural ambitions appear familiar, as do the institutional responses. Is the EU policy system, therefore, merely a replica of what we already have in many of the Western European states—policy communities and policy networks but in a different setting? In trying to answer this question, we run into greater difﬁculties. In short, procedural ambitions are probably more difﬁcult to realize in the European Union simply because it is not a ‘normal’ political system. Hence, there may be limitations to the utility of some of our existing policy analysis approaches.

Procedural Ambitions and Complex Policy Processes Elsewhere I suggested that the EU policy process was characterized by uncertain agendas, shifting networks, and complex coalitions (Richardson 1995). How does this characterization square with the thesis argued above, that much of the EU policy process looks familiar and that familiar concepts have a good deal of utility? The most likely answer is that there are some structural features of the EU system which militate against the kind of relatively stable outcomes that the familiar procedural ambitions have produced in the postwar period in many of the individual member states of the Union. If we take the dominant paradigm for many of the West European states in the post-war period—namely, those analytical approaches based on the related concepts of policy communities and policy networks—it encompassed certain assumptions about the nature of the policy process. Central features of the ‘model’ include stability of participation; a degree of predictability in agenda setting; and an understanding that loyalty to the policy community demanded that issues should be resolved within the community—a kind of ‘intramural’ policy process (Jordan and Richardson 1982). There are at least two problems in simply transferring this analytical framework to the European level. First, one needs to ask if the empirical ﬁt still holds true at the level of the nation state, some twenty years after these frameworks were developed. Secondly, one needs to look at the empirical evidence at the EU level. Turning to the ﬁrst question, is the policy community/

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network ‘model’ sufﬁciently robust, in itself, to withstand the journey from nation state to the supranational level?

From Policy Communities to Issue Networks: Stability versus Uncertainty As suggested above, the concepts of policy community and policy network generated some fairly clear characterizations of how public policies were made—at least in the majority of Western and Northern European nation states. In trying to assess the utility of these concepts at the European level, it is worth making explicit what these original core elements were. A key feature of the approach was the notion that public policy-making had shifted from the conventional democratic institutions—such as elections, parties, parliaments, and even cabinets—to a shadowy world of semi-private institutions. Those shadowy institutions were labelled policy communities. The ‘legitimate’ stakeholders were incorporated into the governmental process as follows: In describing the tendency for boundaries between government and groups to become less distinct through a whole range of pragmatic developments, we see policies being made (and administered) between a myriad of interconnecting, interpenetrating organisations. It is the relationship involved in committees, the policy community of departments and groups, the practices of co-option and the consensual style, that perhaps better account for policy outcomes than do examinations of party stances, of manifestos or of parliamentary inﬂuence. (Richardson and Jordan 1979: 73–4) Almost twenty years later, the concept of ‘new governance’ seems to emphasize exactly the same features of the public policy process. Thus, Rhodes sees ‘governance’ as signifying ‘a change in the meaning of government, referring to a new process of governing; or a changed condition of ordered rule; or the new method by which society is governed. I employ a stipulative deﬁnition; it refers to self organizing, interorganizational networks’ (Rhodes 1997: 35, emphasis in the original). The objective of public and private actors in creating and sustaining these self-organizing interorganizational networks relates to a desire for stable policy-making and stable environments. Thus: The logic of negotiation also suggests that policy-makers in both government and groups will share an interest in the avoidance of sudden policy change. Working together they will learn what kind of change is feasible and what would so embarrass other members of the ‘system’ as to be unproductive. Members of the system will begin to debate in the same language (if not with the same values), and arguments will be treated seriously only if discussed in these common criteria. There is a role diffusion in that all members—government ofﬁcial, academic experts and group ofﬁcials—become policy professionals. (Jordan and Richardson 1982: 93–4)

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Jordan further emphasized both the stability of policy communities and the existence of shared views. He sees policy communities as: A special type of stable network, which has advantages in encouraging bargaining in policy resolution. In this language the policy network is a statement of shared interests in a policy problem: a policy community exists where there are effective shared ‘community’ views on the problem. Where there are no such shared views no community exists. (Jordan 1990: 327, original emphasis) Similarly, the considerable corpus of work by Marsh and Rhodes, which has done much to deﬁne and reﬁne the original metaphor of a policy community also emphasises stability and exclusivity. As Judge observes, Rhodes repeatedly states (Rhodes 1985: 15; 1988: 78; 1990: 204; Rhodes and Marsh 1992a: 182, Rhodes and Marsh 1992b: 13) that: ‘policy communities are networks characterised by stability of relationships, continuity of a highly restrictive membership, vertical interdependence based upon shared delivery responsibilities and insulation from other networks and invariably from the general public (including Parliament)’ (quoted by Judge 1993: 122). More recently, Rhodes has stressed that, amongst the six reasons why policy networks are important is the fact that ‘they decide which issues will be included and excluded from the policy arena’ (Rhodes 1997: 34). However, whilst there are undoubtedly networks which exhibit all the stability and exclusiveness characteristics, and do control national policy agendas, the policy process now seems much more open and unpredictable. Thus, a rather different characterization, generated from an analysis of policy-making in a federal system (and, therefore, of particular relevance to a study of the EU policy process) has been suggested in Heclo's classic analysis of politics in Washington, DC. Heclo's focus was quite the opposite of the exponents of the policy community/policy network approaches. He was concerned with uncertainty, unpredictability, and large numbers of stakeholders who were often part-time participants in the policy process. At the very time that many authors were emphasizing stable policy communities, Heclo observed a trend which appears to be still running strongly at both the national and European levels—namely, that policy problems often escape the conﬁned and exclusive ‘worlds’ of professionals and are resolved in much looser ‘conﬁgurations’ (if indeed such a structured term can be used) of participants in the policy process. Heclo argued that the nature of power in Washington had begun to change. Exercising power was not as much fun as it used to be in the ‘clubby’ days of Washington politics (Heclo 1978: 94). Politics was less ‘clubbable’ because more and more groups had entered the policy process. Thus, ‘as proliferating groups have claimed a stake and clamoured for a place in the policy process, they have helped diffuse the focus of political and administrative leadership’ (Heclo 1978: 94–5).

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He argued that: With more public policies, more groups are being mobilised and there are more complex relationships among them. Since very few policies ever seem to drop off the public agenda as more are added, congestion among those interested in various issues grows the chances for accidental collisions increase, and the interaction tends to take on a distinctive group-life of its own in the Washington community. One scene in a recent Jacques Tati ﬁlm pictures a Paris trafﬁc circle so dense with trafﬁc that no one can get in or out; instead, drivers spend their time socialising with each other as they drive in endless circles. Group politics in Washington may be becoming such a merry-goround. (Heclo 1978: 97) Correctly, Heclo argued that we needed to rethink our notions of political power. Existing conceptions of power and control were not well suited to the ‘loose-jointed’ power play of inﬂuence that was emerging. In a now classic formulation, he argued that: Obviously questions of power are still important. But for a host of policy initiatives undertaken in the last twenty years it is all but impossible to identify clearly who the dominant actors are. Who is controlling those actions that go to make up our national policy on abortions, or on income redistribution, or consumer protection, or energy? Looking for the few who are powerful, we tend to overlook the many whose webs of inﬂuence provoke and guide the exercise of power. These webs, or what I will call ‘issue networks’, are particularly relevant to the highly intricate and confusing welfare policies that have been undertaken in recent years. (Heclo 1978: 102) Heclo, however, was reluctant to accept a total disorder thesis, making at least two important qualiﬁcations to the new model of confusion, of diffuse power, and of lack of accountability. He pointed out a paradox of disorder and order, when he argued that there was a second tendency cutting in the opposite direction to the widening group participation in public policy. In the midst of the emergence of the loose issue networks cited above, we could also see what he called ‘policy as intramural activity’. Thus: Expanding welfare policies and Washington's reliance on indirect administration have encouraged the development of specialised subcultures composed of highly knowledgeable policy watchers. Some of these people have advanced professional degrees, some do not. What they all have in common is the detailed understanding of specialised issues that comes from sustained attention to a given policy debate. (Heclo 1978: 49) In a less quoted passage, he deftly links the two apparently contradictory trends, as follows: Whatever the participants' motivation, it is the issue network that ties together what would otherwise be the contradictory tendencies of, on the one hand, more widespread organizational participation in public policy and, on the other, more narrow technocratic specialization in complex modern policies. Such networks need to be

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distinguished from three or other more familiar terms used in connection with political administration. An issue network is a shared knowledge group having to do with some aspect (or, as deﬁned by the network, some problem) of public policy. It is therefore more well-deﬁned than, ﬁrst, a shared attention group or ‘public’, those in the networks are likely to have a common base of information and understanding of how one knows about policy and identiﬁes its problems. But knowledge does not necessarily produce agreement. Issue networks may or may not, therefore, be mobilized into, second, a shared-notion group (creating a coalition) or, third, a shared-belief group (becoming a conventional interest organisation). Increasingly, it is through networks of people who regard each other as knowledgeable, or at least as needing to be answered, that public policy issues tend to be reﬁned, evidence debated, and alternative options worked out—though rarely in any controlled, well-organised way. (Heclo 1978) Many of the characterizations of Washington politics, identiﬁed by Heclo, apply to the EU today. Each Directorate General appears to have its own constellation of issue networks. Moreover, these loose conﬁgurations increasingly overlap with their equivalents from other DGs. Promiscuity of this kind sits uncomfortably with notions of order and predictability.

Conclusion: Promiscuity and Predictability It is conventional wisdom (but nevertheless correct) to argue that the EU policy process exhibits a high degree of cross-sectoral variation. Descriptions which may capture the process of formulating telecommunications policy, may be totally misleading for, say, policy formulation in the Second and Third Pillars of the Treaty. There are undoubtedly also intra-sectoral and temporal variations which can be quite large. Empirical evidence, therefore, suggests that some caution needs to be exercised in adopting one analytical approach to the EU policy process. There is not one EU policy process. Nevertheless, it is reasonable to argue that the weight of empirical evidence about the behaviours of the Commission and groups is sufﬁciently great for us to claim that there is a clear procedural ambition on the part of the stake-holders to reconstruct something like the communities and networks that have been identiﬁed at the national level. This ambition appears to cut across policy areas. Space does not permit a detailed review (see Mazey and Richardson 2001, 2001b), but it is beyond doubt that consultation is deeply embedded in the organizational culture of the Commission. This culture is clearly outlined in the Commission's 1992 publication An Open and Structured Dialogue and further developed in publications subsequent to the Cardiff European Council of 15/16 June 1998. The latter stressed the need to bring the Union nearer to its citizens by making it more transparent, more understandable, and closer to everyday life. In practice this has meant an even

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greater emphasis on interest group accommodation by the Commission. In its December 1992 document, the Commission argued that it ‘has always been an institution open to outside input’. The Commission believes this process to be fundamental to the development of its policies. It is in the Commission's own interest to maintain open access, ‘since interest groups can provide the services with technical information and constructive advice’ (Commission 1992: 1). The Commission's ‘procedural ambition’ to seek out and institutionalize interest group participation in policy-making is absolutely clear. Its current statement (located in its special website devoted to its relations with interest groups) on the value of consultation states: The Commission has always been an institution open to input from special interest groups. The Commission believes this process to be fundamental to the development of sound and workable policies. This dialogue has proved valuable to both the Commission and to interested outside parties. The Commission acknowledges the need for such outside input, welcomes it and intends to build further on this practice in future. To this end the Commission is taking a series of measures intended to broaden participation in the preparation of its decisions. (Minimum Requirements for a Code of Conduct Between the Commission and Special Interest Groups, http:// europa.eu.int/comm/sg/sgc/lobbies/en/communication/) This is bureaucratic-speak for the type of bureaucratic politics suggested by Peters, in 1992, as a primary feature of the EC polity. Thus, he suggested that, ‘given the decentralised structure of policymaking in Europe, with multiple actors at the European level and even more at the national level, it should not be surprising if policies were the product of loosely organised and ﬂexible policy communities’ (Peters 1992: 18). The reference by Peters to ‘loosely organised and ﬂexible policy communities’ has more than a hint of Heclo-type issue networks about it, rather than the more strictly deﬁned sense of the term ‘policy community’ cited earlier. ‘Looseness’ and ‘ﬂexibility’ are singularly apposite adjectives to describe the system—indeed, elsewhere we prefer to use the term ‘promiscuity’ to capture both the Commission's approach to ‘networking’ and the behaviour of groups as they enmesh themselves in a huge variety of forms of consultation and coalitions (Mazey and Richardson 2001b). In practice, the procedural ambition is itself a recipe for promiscuity in terms of relations between the Commission and interest groups. The more the Commission stresses openness and consultation, the more new groups will come to Brussels. The more groups there are in Brussels, the more groups will want to come to Brussels. Thus, as Heinz et al. noted in the USA, lobbying begets more lobbying; attempts to reduce uncertainty by lobbying create more uncertainty, which in turn begets more lobbying (Heinz et al. 1993). Exactly the same phenomenon seems to be present in the EU, suggesting that Hugh Heclo's analogy for Washington politics—a congested Paris trafﬁc

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island in a Jacques Tati ﬁlm—may be equally apposite for Brussels. The slightly chaotic and almost pointless activity conjured by the Tati analogy is, of course, unfair to the EU. Brussels does generate an enormous output of public policy. Chaotic and unpredictable the process may be, but it is productive none the less. The paradox identiﬁed by Heclo is also evident in the EU. Thus, at the micro-policy-making level, it is undoubtedly possible to identify quite coherent and tightly constrained policy communities. Much of the standard setting in the EU will be of this type, for example. Thus, for some policy issues, especially those that are highly technical, the number of actors who really understand the issues and can participate effectively in policymaking can be quite small. They can also develop into rather stable constellations who get to know and trust each other quite well. More often, however, one is likely to ﬁnd the more open structures originally identiﬁed in the USA by Heclo and, more recently, by Helman et al. In their study of water policy networks in the USA the latter concluded that the sector ‘was characterised by multiple arenas but not an overarching sector-wide arrangement encompassing all of the major decision-making participants. The . . . policy ﬁeld is marked by considerable fragmentation in structure, as well as by largely unco-ordinated policy’ (Heilman et al. 1995: 80). The central difﬁculty in applying the policy community and network ‘model’ to the EU is exactly the same: the degree of fragmentation between cognate policy areas, and between competing networks and coalitions in the same policy area can be intense. The frustrating paradox is that one can see, quite clearly, the procedural ambitions which can be predicted from well-known concepts and theories regarding actor behaviour—hence the promiscuity—but it is more difﬁcult to ﬁnd the public policy theory that can predict the outcomes (and winners and losers) of the EU's promiscuous policy style. The problem for policy analysts to solve is that we need to take account of the fact that the EU is qualitatively and quantitatively more complex in its institutional arrangements and processes than any of the member states or even the complex federal system in the USA. The EU is an especially disjointed polity, in the sense that it contains so many venues at which issues can be raised. If one adds into this complex (and itself unstable) institutional mix, very large numbers of interest groups claiming and getting access to policymaking processes, it is always going to be difﬁcult for the (possibly many) policy communities which do undoubtedly exist at the meso-level to successfully constrain and restrict debate and participation. (For a discussion of different levels of policy-making see Peterson 1995.) Policy communities and networks are concerned with issue contraction. The problem facing those policy communities which have been erected in the EU is that issue expansion is so easy and so common. In practice the number and variety of stakeholders is too large to be ﬁtted into policy community-type structures. Hence, I conclude

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with a paradox which seems to capture the EU as a policy-making state. It is full of the familiar and can in part be explained by some familiar behavioural models. Yet these familiar friends and institutional devices coexist inside a huge garbage can of decision-making—namely a series of ‘organised anarchies characterised by problematic preferences, under technology and ﬂuid participation’ (Cohen et al. 1972; Richardson 1996). The challenge, which none of us has yet overcome, is to ﬁnd a model which can capture the full spectrum, from policy community to garbage can.

References Austen-Smith, David, and Wright, John R. (1992). ‘Competitive Lobbying for a Legislator's Vote’, Social Choice and Welfare, 9: 229–57. Baumgartner, F. and Jones, B. (1991). ‘Agenda Dynamics and Instability in American Politics’, Journal of Politics, 53/4: 1044–73. —— and —— (1993). Agendas and Instability in American Politics (Chicago: Chicago University Press). Butt Philip, A., and Porter, M. (1997). ‘Business Alliances, Network Construction and Agenda Deﬁnition: Recent Developments in Lobbying Activities—Brussels and Strasbourg’, paper presented to Fifth Biennial Conference of the European Community Studies Association, 29 May–1 June. —— and Grey, O. (1997). Directory of Pressure Groups in the EC (London: Catermill Press). Coen, David (1997). ‘The Evolution of the Large Firm as a Political Actor in the European Union’, Journal of European Public Policy 4/1: 91–108. —— (1998). ‘The European Business Interest and the Nation-State: Large-Firm Lobbying in the European Union and Member States’, Journal of Public Policy, 18/1: 75–100. —— (1999). ‘Business Interests and European Integration’, paper presented to a conference on Organized Interests and the European Union, Nufﬁeld College, Oxford, 1–2 Oct. Cohen, Michael, March, James, and Olsen, Johan P. (1972). ‘A Garbage Can Model of Organizational Choice’, Administrative Science Quarterly, 17: 1–25. Commission of the European Communities (1992). An Open and Structured Dialogue between the Commission and Interest Groups (SEC (92) 2272 ﬁnal; Brussels: European Commission). Cram, Laura (1994). ‘The European Commission as a Multi-Organisation: Social Policy and IT Policy in the EU’, Journal of European Public Policy, 1/1: 195–218. —— (1997). Policy-Making in the European Union: Conceptual Lenses and the Integration Process (London: Routledge). Dahl, R. (1982). Dilemmas of Pluralist Democracy (London: Yale University Press). Downs, Anthony (1967). Inside Bureaucracy (Boston, Mass.: Little, Brown & Co). Dudley, G., and Richardson, J. (1998). ‘Arenas Without Rules and the Policy Change Process: Outsider Groups and British Roads Policy’, Political Studies, 4/4: 727–47.

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Mazey, S. (1998). ‘The European Union and Women's Rights: From the Europeanization of National Agendas to the Nationalization of a European Agenda?’, Journal of European Public Policy, 5/1: 131–52. —— and Richardson, Jeremy (1992). ‘Environmental Groups and the EC: Challenges and Opportunities’, Environmental Politics, 1/4: 109–28. —— and —— (eds.) (1993). Lobbying in the European Community (Oxford: OUP). —— and —— (1999). ‘Interests’, in Laura Cram, Desmond Dinan, and Neill Nugent (eds.), Developments in the European Union (Basingstoke: Macmillan), 105–29. —— and —— (2001a). Filling the Hollow Core? Interest Intermediation in the European Union (London: Routledge). —— and —— (2001b). ‘Institutionalising Promiscuity: Groups and European Integration’, in Neil Fligstein, Wayne Sandholtz, and Alec Stone Sweet (eds.), The Institutionalisation of European Space (Oxford: OUP). Peters, B. G. (1992). ‘Bureaucratic Politics and the Institutions of the European Community’, in A. Sbragia (ed.), EuroPolitics: Institutions and Policy-making in the ‘New’ European Community (Washington, DC: Brookings Institution), 75–122. Peterson, John (1995). ‘Decision-Making in the European Union: Towards a Framework for Analysis’, Journal of European Public Policy, 2/1: 69–93. Radaelli, Claudio (1999). Technocracy in the European Union (London: Longman). Rhodes, R. A. W. (1985). ‘Power Dependence, Policy Communities and Intergovernmental Networks’, Public Administration Bulletin, 49: 4–29. —— (1988). Beyond Westminster and Whitehall: The Sub-central Governments of Britain (London: Unwin Hyman). —— (1990). ‘Policy Networks: A British Perspective’, Journal of Theoretical Politics, 2/3: 293–317. —— (1997). ‘From Marketization to Diplomacy: It's the Mix that Matters’, Public Policy and Administration, 12/2: 31–49. —— and Marsh, D. (1992a). ‘New Directions in the Study of Policy Networks’, European Journal of Political Research, 211: 181–205. —— and —— (1992b). ‘Policy Networks in British Politics’, in Marsh and Rhodes (eds.), Policy Networks in British Government (Oxford: Clarendon Press). Richardson, Jeremy (1994). ‘Doing Less by Doing More: British Government 1979–93’, in Wolfgang C. Müller, and Vincent Wright (eds.), The State in Western Europe: Retreat or Redeﬁnition? (London, Frank Cass), 178–97. —— (1995). ‘EU Water Policy: Uncertain Agendas, Shifting Networks and Complex Coalitions’, in Hans Bresser, Laurence J. O'Toole, and Jeremy Richardson (eds.), Networks for Water Policy: A Comparative Perspective (London: Frank Cass), 139–67. —— (1996). ‘Policy-Making in the EU: Interests, Ideas and Garbage Cans of Primeval Soup’, in Jeremy Richardson (ed.), European Union: Power and Policy-Making (London: Routledge), 3–23. —— (ed.) (2001). Swedish Governance under Pressure (Cheltenham: Edward Elgar). —— and Jordan, Grant (1979). Governing under Pressure: The Policy Process in a Post-Parliamentary Democracy (Oxford: Blackwell). Rose, Richard (1993). Lesson-Drawing in Public Policy (Chatham, NJ: Chatham House Publishers).

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8 Constitutional Reform and Treaty Reform in Europe David Hine This section of the book examines the usefulness of traditional approaches to the study of comparative politics in understanding the institutions and policies of the European Union. This chapter considers what lessons may be learnt from the processes of constitutional change at national level in understanding similar processes at the level of the European Union, and what contribution treaty reform and development have made to effective integration of the Union. Clearly, in a strictly legal sense, the distinction between a treaty and a constitution is a fundamental one, and lies at the heart of a long-standing conceptual dispute about the status of the European Union as a political entity. If its founding treaties are deemed to be traditional multilateral treaties in international law, squarely in the tradition of the Vienna Convention on the Law of Treaties, then it follows that they do not enjoy the status of a ‘higher law’ or a ‘constitution’, that the member states which have signed the treaties have not lost their sovereignty, that there is no ‘European citizenship’ or ‘European people’, and that the treaties do not protect any special group of ‘fundamental rights’. If, in contrast, the treaties are deemed to be a constitution, then it follows, in the memorable words of two seminal European Court of Justice judgments that: by creating a Community of unlimited duration having its own institutions, its own personality . . . and, more particularly, real powers stemming from a limitation of sovereignty or a transfer of powers from the States to the Community, the Member States have limited their sovereign rights . . . and have thus created a body of law which binds both their nationals and themselves . . . (Costa v. ENEL) and that: the Community constitutes a new legal order . . . for the beneﬁts of which the states have limited their sovereign rights, albeit within limited ﬁelds, and the subject of which comprise not only Member States but also their nationals (Van Gend en Loos v. Nederlandse administratie).

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An enormous volume of literature has been devoted to this argument. At the risk of considerable over-simpliﬁcation one might summarize its contents as follows. In strict legal terms, the international law interpretation of the European Union's status remains the operative one, yet it seems counter-intuitive to persist with it in the face of the stark facts of nearly half a century of Community/Union development. In the areas in which European law applies, and notwithstanding the unspent ammunition with which the German Constitutional Court (and some others) have armed themselves to interpret the limits of competence of EU institutions, European law has become the supreme or higher law, and strong, durable, and authoritative institutions have been developed to intepret it and enforce it. Moreover, the decision-making arenas of the Union have passed through an extended period of institutionalization, and have gradually acquired at least some ‘polity-like’ properties. However, as soon as one passes to the issue of how, should the Union be deemed to have crossed the rubicon separating an old-style international organization from a new constitutional order, the normative foundations of the new constitutional order are to be deﬁned and justiﬁed, the problems become very apparent, as indeed do the deﬁciencies of the democratic procedures which govern it. First, there does not appear to be a real European nation, with all that this concept entails, as a normative foundation, in most (though not quite all) developed liberal democracies, through shared history, goals, identity, etc. Second, the citizenship aspects of EU institutional development are the weakest and most ambiguous parts of the European design. Small wonder therefore that, for many, the principal unresolved problem the Union faces as it enters the new century is the enduring lack of legitimacy of the institutional/constitutional order it has allowed to grow up. The problem, in the perceptive words of Joseph Weiler, is not one of constitutionalism without a constitution, but of a constitution without constitutionalism.23 This chapter does not attempt to resolve this dilemma, either through some form of retrospective normative justiﬁcation of the ‘constitutional’ interpretation of the treaties, or by identifying attitudinal changes or new interpretations of multiple citizenship among Europe's peoples which might hold a future key to such justiﬁcation.24 More modestly, it seeks to consider, from the point of view of comparative politics rather than law, what general problems of comparison arise when examining treaty reform in the EU and constitutional reform in an entrenched and consolidated liberal democracy, before

23

Weiler 1996: 517. No claim is made to originality in the ideas set out in this introduction. There exists a number excellent discussions in English of the issues of constitutional interpretation to which it alludes. In addition to the previously quoted article, see also Weiler 1991, 1995, 1997; Mancini 1991; Schuppert 1995.

24

For an interesting discussion of this, however, see Weiler 1997: 269–72.

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passing to consider brieﬂy in the ﬁnal section what parallels there are between the evolution of constitutional practices and conventions, as opposed to formal texts, at state level, and analogous processes at EU level.

Assessing the Analogy In assessing how close the analogy is between treaty reform and constitutional reform, and what is to be learnt from the comparison, there might be thought to be three main criteria of judgement: substance, context or justiﬁcation, and operating procedure. The ﬁrst tells us whether treaty reform is about the same sorts of issues of governance as we ﬁnd in liberal-democratic states. The second tells us about the circumstances in which it will be possible or necessary to undertake treaty reform, compared to constitutional reform. The third will tell us whether the procedural rules—especially those concerning the legitimate location for decisions and the level and type of consensus required—are systematically different between the two types of exercise.

Substance On the ﬁrst of these, some commentators have tried to argue that discussion of the institutional framework of the EU requires a different lexicon from that used to describe political institutions at national level. They often do so on the grounds that the way to understand European institutions is in developmental terms. Thus, Schuppert (1995: 345–6) writes: the process of evolution of a European [Union] state can be properly grasped neither by contrasting the concepts of federation and federal state nor by applying the principles of national constitutional law. Instead, it has to be understood as an evolutionary process of a non-state association of states, which follows its own logic of development, thereby producing peculiar organizational and constitutional structures which are unique to the stage of integration of the day. I discuss later whether the European constitutional order is—as most orders have been at some stage in their history—still a developing one, but it is not obvious that this constitutional contingency itself makes discussion of any particular stage of development impossible to analyse in conventional terms. To consider the EU as a federal state certainly generates all sorts of problems. It is obvious that the executive power enjoyed by the centre or the federal level is extraordinarily limited. And it is certain that the democratic foundations of those institutions which make up the ‘centre’ are weak, largely indirect, and little understood by the EU's ‘citizens’. But to take refuge in a different ‘developmental’ language, by describing the Union's institutions by reference to what they are not, and to claim that what is being generated is

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somehow new and unique, borders on the metaphysical. While the EU's constitution may be a moving target, at any particular moment it is a target. It is a real set of power relationships, and it allocates real powers of decision, just as constitutions do at national level. Both EU treaty reform and state-level constitutional reform are driven by the issue of multi-tiered governance, and both entail complex imperatives that point towards quite contrasting solutions. The imperative of decisional effectiveness demands a channelling of power, at each tier of government, towards the executive. The imperative of accountability, in contrast, channels power towards both representative bodies at the central level (and to courts, bills of rights, consultative arrangements) and to devolved authorities at lower tiers than the central one. The fact is that these fundamental values—basic to any theory of political institutions—are in contrast in the EU just as they are in a nation-state polity. Just because the EU's constitutional drafters have not yet been able to resolve them, and feel dissatisﬁed with the results of their efforts to do so, it does not follow that EU institutions do not face the same dilemmas as institutions in national political systems. An alternative way of setting the EU's constitutional development apart from experience in nation-state polities is to suggest that the content of treaty reform at EU level is different from that of constitutional reform in most modern nation states—at least in Europe—because the name of the game at EU level is centralization of power, while at national level it is dispersal of power. Certainly it sometimes appears that the substantive direction of liberal-democratic constitutional reform movements of recent years has entailed a general drive towards a deepening of the quality of democratic governance, which has placed the emphasis on civil rights, judicial protection, freedom of information, the devolution of power, and the strengthening of legislative powers. But there are plenty of counter-examples—constitutional or quasi-constitutional—driven by the belief that the centre can only be properly accountable if it is effective and well co-ordinated. Thus, in the United Kingdom, we see in the Labour government elected in 1997 a profound ambivalence about constitutional reform: a strong drive towards regional devolution, yet a concern at the political centre for strong central co-ordination and control (‘joined-up government’) that vests power in the Downing Street machinery, in co-ordinated policy marketers whose task is to ensure a uniform message, and in centralized party control of candidate selection processes. In Germany and Italy there is similar ambivalence. The institutional assertiveness of the German Länder continues to grow, whichever party is in power, but with it grow serious constitutional concerns about policy deadlock at the federal level. Italy shows even greater ambiguity. Its main concern, during a decade in which constitutional reform has been a key issue on the agenda of current politics, has been as much focused on the pathology

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of weak and unstable government as it has been, under pressure from new parties with explicitly territorial appeal, on a shift in power from the central state to the regions and local authorities (see Hine 1996: 311–25). This is no different from the ambiguities in thinking about treaty reform at EU level. One important thrust has certainly been towards centralization, and the constraints of the convergence criteria and the Stability Pact which have accompanied monetary union have handed the power of monetary regulation, the capping of public expenditure, and the role of currency regulation over to an essentially unelected and unaccountable central bank. Globalization was of course already stripping national governments and national parliaments of powers in these areas for some years before the advent of the euro, but the formalization of the new order inherent in the ECB's role has greatly reinforced this. Yet a strengthening of the decisional capacities of the Union vis-à-vis member states has certainly not been the only goal of treaty reform. Democratization and an increase in accountability have also been important goals, and in some respects the European Parliament has seen signiﬁcant enhancements of its powers through the Treaties of Maastricht and Amsterdam (Laffan 1997; Hix 1999). The outcome of Parliament's efforts to strengthen the democratic linkage between itself and the Commission remains uncertain, and, to many friends of greater integration whose values are pragmatic and technocratic, it has not been entirely welcome. Moreover, the differentiation of the EU's decisionmaking powers into three ‘pillars’ with signiﬁcant procedural differences between the three does not suggest that decisional effectiveness is the only concern. If it is argued that this very differentiation is because of the need for different sources of legitimacy, with the only available legitimacy for internal and external security issues being that of member-state governments, this could be seen as showing that Europe's constitution builders are no less mindful of the normative basis of a constitution than are national ones (Schuppert 1995: 351–6). It is therefore difﬁcult to argue that it is the content of treaty reform which is different. Rather, it is when we move from our ﬁrst to our second criteria of comparison—to the context or the justiﬁcation for reform—that the differences from constitutional reform in nation-state polities start to become clearer.

Context If we ask ourselves when constitutions get revised we can, at the risk of some simpliﬁcation, distinguish between three sets of circumstances. The ﬁrst is the evolution of constitutional meaning and practice without modiﬁcation of the formal text, which I consider later. The second is what might be described as piecemeal reform: the adjustment of one or more speciﬁc provisions of the

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text, in response to perceived needs, and generally on the basis of a fairly broad political consensus. The third is wholesale reconstruction, in which the form and philosophy of government is overhauled, for example, to strengthen the central executive, or to introduce extensive federal devolution, or to shift from a parliamentary to a presidential or a semi-presidential form of government. The last of these three types of pressure looks, at ﬁrst sight, to be the most important, and certainly would-be constitution builders in the EU appear to conceive of the process of treaty reform as one in which, if not through a big bang, then at least through a teleological series of linked steps, the Union moves towards a ﬁnal state in which in has the clear characteristics of a political system in its own right. However, it is also clearly the type of change which, in advanced and consolidated liberal democracies, is much the most difﬁcult. Piecemeal constitutional reform, in contrast, is relatively easy. If we take the six largest north Atlantic democracies—the USA, Germany, the UK, France, Italy, and Spain—it is only really in the United States that constitutional reform has become almost impossible. The US Constitution has had only eleven amendments in the whole of the last hundred years (only two of which were of real institutional signiﬁcance25), and only two in the last thirty, but the German Basic Law was subject to no fewer than thirty-ﬁve adjustments between its promulgation and reuniﬁcation in 1990, and the Italian, French, and Spanish constitutions have all been amended in, for the most part,26 minor but frequently necessary ways since their respective promulgation dates. The UK's unwritten constitution is of course subject to frequent constitutional modiﬁcation because redrafting those parts of it which depend on statute law is in formal-legal terms as easy as redrafting ordinary law. When it comes to major overhaul, however, the picture for these same democracies is entirely different. The United States has never seriously sought a systematic overhaul of its constitution. However great the evolution of constitutional practice over this same period, the country's governmental architecture has, in the words of James Sundquist (1986: 3): ‘proved amazingly durable in a world of change . . . the structure that was designed for the United States government in one eighteenth century summer remains in force essentially unchanged’. Germany since 1949 presents the same story, despite

25

James Sundquist points out that of the sixteen amendments approved after the passage of the bill of rights of 1791 (which constituted the ﬁrst ten amendments), only two (the 17th Amendment of 1913, and the 22nd Amendment of 1951) affected the fundamental operation of the institutions of government. The former provided for the direct election of senators and the latter restricted the presidential terms to two. Sundquist 1986: 2–3.

26

The introduction of the direct election of the President of the Republic in France in 1962 is of course the outstanding exception to this, since it had regime-changing consequences, though it is best seen as a continuation of the process of constitutional change ushered in by the crisis of the Fourth Republic in 1958, discussed later in this section.

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the fact the Basic Law was originally a provisional constitution, to be redrafted by representatives of the whole people, thereafter to be approved by a referendum under Art. 146. When the moment came, however, the difﬁculty of major overhaul in Germany too became very apparent. Uniﬁcation took place through dissolution of the GDR into ﬁve separate states, which were then absorbed into the FGR under the fast-track aegis of Art. 23. And even though the 1990 Uniﬁcation Treaty included a provision for wholesale revision, subsequent events underlined a deep-rooted constitutional conservatism. The original idea of a ‘constitutional council’, similar in nature to a full constitutional convention, was quickly rejected in favour of the more conservative instrument of a parliamentary commission composed only of representatives of the two chambers of parliament. The council, in its turn, produced only very modest proposals for reform, and these to date have remained on the table because of the Bundesrat's unwillingness to approve them. In their own ways, Italy, Spain, and France lend further weight to the argument about the difﬁculty of major constitutional overhaul. France and Spain have both experienced such constitutional overhaul in modern times. But neither at the time was a stable democratic regime setting about the process of radical constitutional revision in a selfconscious manner, unprompted by dramatic crisis. On the contrary, Spain in 1977 was a dictatorship which had lost its raison d'être, and therefore had every incentive (as had Italy and Germany in even more dramatic fashion three decades earlier) to reconstruct both regime and constitution. France in 1958 was a completely unstable democracy faced with the threat of a coup d'état. Italy in the 1990s looked superﬁcially to have reached a similar crisis of legitimacy. The collapse of the old regime under the wave of corruption revelations that hit the country at the start of the decade certainly generated extensive efforts at a fundamental reordering of the Republican Constitution. But after six years of negotiations, and two special bi-cameral parliamentary commissions, the whole enterprise ended in disarray in 1998, before any package could be put to the people. Comparison of the Italian case with the case of the Fourth French Republic is particularly interesting in this respect, for France provides almost the only successful example of a fundamental constitutional overhaul involving a transformation from one form of democratic government to another, and not a regime transfer from authoritarianism to democracy, nor, as after 1945, in Germany and Italy, a case of outright military defeat. The difference is clearly that the crisis of legitimacy in France in the late 1950s was of a different order from that in Italy in the early 1990s, with the threat of an imminent military coup, the availability of a clear-cut and understandable constitutional project, and the presence of a hegemonic leader capable of pushing the changes through, and ensuring that subsequent constitutional

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practice consolidated and strengthened the blueprint. Outside the conditions experienced in France in 1958, however, constitutional reform is rare, and it is not hard to see why. Unless there is a crisis, one does not tend to interfere with the legitimacy accorded to a constitution by the passage of time, or with the functionality accorded by familiarity and experience. Given this evidence, it might be thought all the more surprising that in the last two decades the process of treaty reform in the European Union—or more accurately the process of attempts at treaty reform—has been so persistent. One might have expected that the years from the 1950s to the early 1980s would have provided the bedding down experience that solidiﬁed the European constitution, and pre-empted subsequent constitutional revision. There are at least two different responses to such a comment. The ﬁrst, and most obvious, might be that such a pattern is to be expected in a consolidated polity, but that the constitutional reform in which Europe has been involved in the last two decades has been a matter of creating a polity, not reforming one. It is the absence of a real European polity that generates the need for reform, this absence has assumed crisis proportions as Western Europe's circumstances have changed, and it is this crisis which is the motor of regime change, just as it was in Germany and Italy in 1945–50, in France in 1958, and in Spain in the late 1970s. The second response is that, since the early 1980s, Europe has seen a valiant but largely unsuccessful attempt to push the constitutional framework forward, and that the EU's experience in this respect is rather like Italy's: a strong imperative to reform, but an inability to carry any part of it through to a conclusion. Four IGCs in, the process is still an intergovernmental one. If it had really progressed, then the procedural rules for constitutional reform (examined in the next section) would by now be different, because the system would have evolved into a fully ﬂedged polity in its own right, and constitutional adaptation would by now be easier. This is not to say that what has been created is unstable, impermanent, or necessarily, in decisional terms, inefﬁcient. On the contrary, a strong sense of permanence and familiarity, workable and fully functioning intergovernmental agreements, strong incentives to cooperation, and a modest degree of procedural majoritarianism on substantive issues (though not on constitutional ones), provide the EU with a confederal constitutional framework which in many respects is superior to the sorts of extensive checks and balances with which a fully federal European Union constitution might be burdened. The EU, in short, like the USA, has been strongly marked by its formative constitutional period, but that formative period lies very early in its history, and has not, for all the constitutional activism of the last twenty years, been fundamentally affected by subsequent events. The reality lies somewhere in between these two extreme interpretations. Undoubtedly the 1980s and 1990s are different from the two previous

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decades. Constitutional activism may be said to have begun in earnest with the Genscher–Colombo Plan, the so-called Solemn Declaration on European Union, and the European Parliament's 1984 Draft Treaty on European Union.27 These initiatives had a scope and purpose far broader than exercises in treaty revision during the previous two decades, which had been brief, modest, and highly consensual (the Merger Treaty of 1965 and the Budget Treaty of 1970s), or which had been called to ratify changes to the EC's boundaries or external relations. The conference of the representatives of member-state governments which had always handled treaty reform was more ﬁrmly institutionalized (it is from the negotiation of the Single European Act that the concept of the ‘IGC’ dates) and charged with the task of establishing a full preparatory negotiating framework for treaty reform, under the management of the Presidency of the Council of Ministers. The result was a succession of IGCs over the following two decades. The intensity of such efforts suggests that, for many important actors, constitutional reform should be an ongoing process, must be accorded a high priority, and cannot be allowed to fail. To date, it has of course had to proceed by unanimity, the forces of constitutional inertia are well-entrenched, and ratiﬁcation by member states, once agreement has been reached between their governments, is fraught with pitfalls because the issues frequently get caught up in domestic politics. The signiﬁcance of what has been achieved, in comparison to what might have been achieved, has certainly been widely questioned. Yet the process has not stopped, and the outcomes of all three exercises completed at the time of writing were eventually ratiﬁed by member states. In short, treaty reform has become an almost institutionalized process, and herein lies the real difference from the process of constitutional reform at national level. The idea that in North America or Western Europe a country could complete (and implement the proposals of) three constitutional conventions in the space of ﬁfteen years is highly improbable. In the European Union, however, constitutional reform has become part of the ongoing process of integration. It has come to be seen by many as an iterative process, by which ‘ever closer’ common values and commonly agreed procedures emerge and are entrenched in a European political culture. From such a perspective, intergovernmental conferences are deﬁning contractual moments in state building, aimed at the eventual generation of a self-conscious political authority with its own legitimacy and authority. In this sense each IGC follows (or should follow) from the next in a clear line of teleological purpose. The problem with this perspective is that, although strong and in many respects persuasive, it has not, in practice, been hegemonic. There are plenty

27

This constitutional evolution is discussed in many sources. For an overview see Ungerer 1993. See also Edwards and Pijpers 1997.

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of other actors involved who have a different, and much more pragmatic, perspective. This is why the teleological school cannot entirely manage without playing the crisis card which its proponents have learnt from national political history. Indeed, from their perspective Europe could almost be said to have suffered one long series of such crises since the early 1980s: Eurosclerosis and the Asian and American economic challenges; the collapse of the Iron Curtain, German reuniﬁcation, and the challenge of enlargement; social and geo-political instability to the east and south-east, and the need for a common foreign policy; currency challenges, monetary union, and the need for political integration and democratization to overcome the democratic deﬁcit. Yet when this card is played, it has a hollow ring, and in comparison to the real national crises which have stimulated constitutional reconstructions at national level, has little salience or credibility. Even more seriously, it is potentially selfdefeating. ‘Europe’ cannot be easily presented as, at the same time, both the success to which greater integration must aspire, and the ‘crisis’ to which there is an irresistible need to respond with constitutional reform. Indeed, by trying to generate a mass collective consciousness of the need for reform, what in the past was an essentially élite activity of which most ordinary voters were blissfully ignorant, may be transformed into a live political issue, which then becomes politicized in unintended ways, tying the hands of the élites themselves, and reducing the scope for collaboration and compromise. However well-drafted the treaty texts (and no one pretends they are at all well-drafted) and however careful the political explanation to the mass electorates of Western Europe, treaty reform is always likely to be a complex and obscure subject. If it is obscure, it can easily get itself an undeservedly bad reputation, and in particular national political contexts can get mixed up with other domestic political issues. When this happens, difﬁcult decisions are postponed, as happened in the case of the Amsterdam Treaty in relation to the size of the Commission and the basis of qualiﬁed majority voting (QMV). Or there may be a suggestion that the decision rules for treaty reform should themselves be changed—as happened in October 1999 in the case of the advisory group set up by Commission President Romano Prodi to formulate proposals for the 2000 IGC.28 The consequence is a serious over-complication of the reform agenda. Instead of one fairly clear-cut direction in which institutional reform should proceed, the air becomes thick with conﬂicting proposals and, worst of all for the protagonists of a unilinear

28

See Commission 1999, in which the three rapporteurs (Deheane, von Weizsacker, and Lord Simon) were reported as proposing the splitting of the existing treaties into two: basic provisions on the one hand (the modiﬁcation of which would still require unanimity among member states) and less fundamental provisions which could be amended by the Council either by either a reinforced qualiﬁed majority or by unanimity. In fact, the Commission ﬁrst made a proposal along these lines to the 1996 IGC (see Commission 1996).

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‘ever-closer union’, it becomes clear that by no means all those interested in reform share their teleological approach to the purpose and meaning of IGCs. Moreover, it has never been the case that the teleological interpretation of IGCs has been shared by all participants. Some member states have regularly been opposed to it, and have been exceptionally fastidious about the formal language employed. The British opposition to the use of the word ‘federal’ is legendary, and even the UK signature on the preamble of the Treaty of European Union was not achieved without some difﬁculty (the eventual wording asserted that ‘the Treaty marks a new stage in the process of European integration . . . [and] . . . continues the process of creating an ever closer union among the peoples of Europe’). But even setting aside British euroscepticism as an extreme position, there is a perfectly respectable view of the role of treaty reform which is pragmatic, or perhaps better agnostic, about the most appropriate institutional mechanisms for achieving collective European goals. From this perspective, treaty reform is a process by which, in the face of new challenges, or simply in the light of operational experience, the EU's institutions can be brought to operate better (whether the criteria of judgement be decisional efﬁciency, democratic accountability, or greater responsiveness), without this necessarily implying a transfer of power from member states to EU institutions, or, within those institutions themselves, from unanimity-based to majoritarian decision-making. These uncertainties were decidedly in evidence in the last years of the 1990s, during which the dangers inherent in a continuous sequence of treaty revisions appeared to have increased very greatly (Dinan 1999: 307–9). Pragmatists became increasingly worried that there ought to be some sort of institutional end-state for the European ‘constitution’, rather than the cycle of permanent revolution into which the EU had apparently fallen. Even those charged in 1999 by Romano Prodi with the task of deﬁning Commission proposals for the next round of treaty revision were well aware that continual constitutional uncertainty provoked by successive IGCs could be counterproductive and destabilizing to other aspects of integration, and suggested that, following a further round of enlargement, it would in any case become all but impossible. As the 1990s ended, therefore, there was a distinct sense that, even if a line was not being drawn under the two-decade battle for constitutional revision, the battle henceforth would be, at the very least, no easier and, with many more member states just around the corner, would probably become a good deal harder. The proponents of permanent constitutional change did not appear to have won over European public opinion, not just because of the presence of convinced eurosceptics furnished with a constitutional veto, but also because many of those involved in the process were possibilists whose

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concerns were short-term, narrow, and highly pragmatic: very much as are those party or sectional interests in national politics which, except in the most unusual, crisis-laden circumstances, tend to block major constitutional reform in national politics. The key point in all this was, of course, that three IGCs in succession had done nothing to alter the procedures themselves that are used for treaty reform, and this, inevitably, meant progress at a very modest pace. It is to this last, exquisitely procedural, aspect of the comparison that we now turn.

Procedure The most fundamental difﬁculty with seeing treaty revision in the EU as analogous to constitutional revision inside national political systems is that it requires one to see the EU as a coherent ‘polity’. It is whole polities that revise their own constitutions because they already possess the legitimacy to do so. This argument has been vigorously debated in recent years, and several commentators do take the view that the EU has polity-like properties, is best seen in such a light, and can indeed be analysed as a ‘system’ (see especially Hix 1999). Clearly, if it is a single system, it might be thought that it will eventually develop a right to take decisions about its own constitutional future, and might even do so on a simple majoritarian basis: taking the word ‘majority’ to mean a majority of member states, or even perhaps a majority of citizens. The key issue is therefore whether it is the system as a whole, as opposed to the units of which it is composed, that has the legitimate right to take decisions about treaty reform. A system in which the unit of decision-making on constitutional matters is the whole system, and in which decisions can be taken by some variant of qualiﬁed majority rule, is very different from one where the ‘system’ itself has no independent legitimacy, and where the democratic sanction for change has to come from its constitutive elements: in the EU's case the member states. There are two tests that help us understand whether the EU or any similar group of states has reached this critical point. The ﬁrst, a formal-legal test, is the willingness of member states to accept provisions for treaty revision that do not require unanimity (that is, ratiﬁcation by all member states). Current treaty-revising procedures (Art. N, TEU) do not allow for this, and indeed such a state of affairs could itself only be introduced by unanimity. The second, a very practical test, is a willingness by member states not to resort to the option of secession when a constitutional change to which they are opposed is introduced under a majoritarian decision-procedure. In relation to substantive policy measures (that is, those governed in the main by the various forms of EU rule-making based on qualiﬁed majority voting), the EU is already close to the status of a polity. Member states defeated on substantive

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policy measures often express deep dissatisfaction about their defeats, and occasionally resort to obstructive behaviour, but they do not resort to secession. However, it is one thing for a member state to accept the possibility of having policy imposed on it in policy areas in which it has agreed in advance that it may be outvoted. It is quite another to accept that new decision-rules, and therefore decisions in unspeciﬁed areas of policy, may be imposed on it against its will. Before the latter stage can be said to have been reached, therefore—and a single political system created—a selfconsciously constitutive act is necessary, based at the least on the consent of every member state. It has sometimes been suggested that a new polity could emerge by a spontaneous declaration from a constituent assembly elected from the ‘European people’. The Draft Treaty on European Union approved in outline by the European Parliament in September 1983 proposed that the Parliament should be transformed into a constituent assembly and be charged with drafting a constitution for a federal United States of Europe.29 But although in successive IGCs member states have always been anxious to keep the European Parliament informed, the reality is that the Parliament has no legitimate basis on which to transform itself into a constituent assembly. Member states might of course decide to give it that right, perhaps in conjunction with some form of constitutive referendum associated with the election of a constituent assembly. Through this they could see whether there was an overall majority in favour of a new political order, and/or a majority in each member state. But so far they have not even contemplated the less radical suggestion of a procedure under which consent was granted by each state on condition that, if either its government, or its citizens in a referendum, disliked the end result, it would be free to secede. Breaking up the old order to create a new one would be risky to the institution of treaty agreements, and risky even for member states who wanted to go down such a road. Even if the new order were established only in member states where a majority of the citizens had voted in favour, and where the member-state governments had concurred, the constitutional risks of later repudiation run very high. Any popularly- underwritten constitutive act, if undertaken prematurely, would risk generating a conﬂict of jurisdictions (between the new European order and the existing well-entrenched member states), even in those cases where a popular or a governmental majority to surrender constitutional sovereignty had been registered.

29

When the European Parliament came to approve the ﬁnal version of the DTEU the following year, it had, however, much to the disappointment of the Treaty's principal architect, Altiero Spinelli, considerably watered down its proposals, though it retained the revolutionary suggestion (Art. 82 DTEU) that it would enter into force once it had been ratiﬁed ‘by a majority of the Member States of the Communities whose population represents two-thirds of the total population of the Communities’, and only the Italian and Belgian Parliaments approved resolutions supportive of the Treaty.

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This would be especially likely in any country which perceived itself to have been in some sense coerced into accepting the new order for fear of exclusion from the wider beneﬁts of membership. Such coercion does indeed seem to occur sometimes, and has probably contributed to the constitutional progress that the EU has been able to make, for even as things stand today, member states are not totally free agents in treaty revision. But the implications of this coercion are generally such that it is deployed with great caution. Thus, for example, intergovernmental conferences produce complex packages, not all the contents of which have a constitutional focus. Member states can be bought off by side payments, as all the literature on the IGC process tells us. In such circumstances, governments know that there will be costs to incur if they allow themselves to be seen as awkward or uncooperative partners. The costs are intangible, and the threats made by other member states are generally, though not invariably, well-camouﬂaged from the indignation of the popular press, but they are not insigniﬁcant. The limit case of this is the threat that the EU might dismantle itself and reconﬁgure itself with a different membership which excluded the recalcitrant states. The implications of doing so for international law might of course be alarming for those contemplating such a measure. Treaty agreements in the EU are concluded on the basis of no further conditionality beyond what is agreed at the time they are drawn up. If their continued validity suddenly became subject to entirely new conditions, it would dent not only the good faith and good name of those imposing the new conditions, but also the institution of treaty agreements in general. To deploy such a weapon against a small state would alarm other small states, and convey the distinct impression of bullying. To deploy it against a large state might also bring heavy costs. In the case of the UK, exclusion from the EU would reduce the latter's internal market and the tax base, create difﬁculties for small states that trade closely with the UK, and separate the rest of Europe from the UK's still important military and defence capabilities, to name only three disadvantages. In general, therefore, the EU has limited its deployment of constitutional coercion to its determined imposition of the acquis on new applicants, and its use in the 1990s of variable geometry in relation to issues such as monetary union, social policy, and the Schengen agreement. Variable geometry has its advantages and its drawbacks. It enables constitutional change to be introduced in advance of unanimity between member states, and there is always the hope that in different domestic political circumstances (the UK after the 1997 election in relation to the social protocol signed at Maastricht), member states will come on board, and what was previously a stumbling block becomes part of the, irreversible, acquis. On the other hand, variable geometry is constitutionally awkward, if not downright disruptive, as the three-pillar arrangements developed in the 1990s have

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demonstrated. Most seriously of all, as we have already noted, if it is the route to coercing member states to accept what they are reluctant to accept, it risks undermining the legitimacy of the entire process of constitution building, as, arguably, the difﬁculties with Maastricht and Amsterdam have demonstrated over the last decade. These considerations suggest that, procedurally, treaty reform in the EU operates under constraints which continue to make it distinctive. These constraints derive from the explicitly intergovernmental nature of the process, even if they are tempered by factors deriving from the increasing difﬁculties of non-membership for any European state. It should not be supposed, however, that this state of affairs is in practice so very different from the situation pertaining in federal states. Again, the American and German experiences are instructive in this respect. American federalism provides two important lessons for the European Union. The ﬁrst, and the critical, difference from the EU, is that the people are directly represented by the federal tier of government, which therefore draws its legitimacy and permanence from the whole people. Before 1787, the Articles of Confederation had provided a set of relationships which was classically intergovernmental in form: each state retained its own ‘sovereignty, freedom and independence, and every power jurisdiction, and right’ not expressly delegated to the confederation. After 1787, the essence of US federalism, and the crucial difference from the Articles of Confederation, was that the national government now derived its power directly from the people rather than the member states. Unlike its predecessor, it could raise revenue and military force. The US government could not abolish state governments, nor they it. There was no right of secession, as was established in brutal manner by the Civil War, and curtly conﬁrmed by the Supreme Court immediately thereafter in Texas v. White (1869), in which the USA was deﬁned as ‘an indestructible union composed of indestructible states’. Single states could not therefore hold up the entire amendment process by threat of secession. The second lesson is that the states maintained a legitimate right to participate in the process of constitutional amendment. The right was not as complete as in the case of the European Union, where every single state has a veto. Nor were the federal organs excluded from the amendment process (though the initial ideas in circulation at the 1787 Philadelphia Convention proposed this). But the ﬁnal form of amendment of the US Constitution (requiring constitutional amendments to have approval by two-thirds of each house of Congress, followed by ratiﬁcation in a seven-year period by four-ﬁfths of the state legislatures30) entrenched the rights of states very deeply. By requiring

30

The Constitution also provides for a second route (a new constitutional convention called by request of two-thirds of the state legislatures) though this has never been employed.

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approval by three-quarters of them, and in virtually all cases by both houses of the state legislature (Congress can in principle lay down that state ratiﬁcation will be by state-level convention, rather than by state legislature, but this has only happened once in twenty-six successful amendments), the US Constitution has in effect made it extremely difﬁcult to push through any major structural change which does not have almost unanimous national approval. German federalism looks superﬁcially more permissive than its American counterpart, in that constitutional amendment does not require ratiﬁcation by individual Länder, but only, under Art. 79, approval by two-thirds of the Bundesrat, following approval by a similar majority in the lower house. But we have already seen that even the German case demonstrates how deeply federalism affects the process of constitutional reform. Its one serious effort at thoroughgoing constitutional revision, following uniﬁcation, was thwarted by disagreement between the two chambers. Indeed, the growing constitutional assertiveness of the Länder on this matter and on others relating to the conduct of European Union business, combined with the frequency of split party control between the two branches of the legislature, shows how strong is the need for an elusive national consensus before constitutional reform has any chance of success. We should not therefore suppose that, even if the EU does eventually succeed in crossing the constitutional rubicon from unanimity-based to majority-based procedures for treaty revision, this will necessarily represent an immediate advance. The EU is always likely to retain a deeply entrenched federalism, and deploying majoritarian procedures is unlikely to prove a great deal easier than has been the case in the USA or Germany. As with QMV procedures in the Council of Ministers, the existence of such a device will assist in extremis, but it is unlikely to be used extensively, or against the opposition of any but the most recalcitrant and systematically isolated of member states. Just as member states in the Council of Ministers have a strong practical preference for unanimity, so will member states when sitting in IGCs, for the stresses and uncertainties of any other approach could well prove too great for the nascent federal polity to bear.

The Evolution of Constitutional Convention I have not, in this chapter, considered the issue of constitutional evolution rather than constitutional reform, even though this is just as important a part of constitutional change and hence institutional development as formal revision. In part this is because the vast bulk of the literature on European Union institutions is devoted to the issue of evolution through practice, as, in part,

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are the interpretive theoretical frameworks of European integration that have competed with one another for the last forty years. There are, in consequence, several excellent texts on EU institutions which cover the relevant aspects of institutional development. A more important reason for abjuring detailed discussion of constitutional evolution is that the range of cases and experience on which to draw at national level is so extensive that it is much less possible to extract meaningful lessons than from examples of thoroughgoing constitutional reform. That said, it would be wrong not to conclude with some reference to this issue, since for most observers it is the legitimacy that institutions derive from successful constitutional evolution which eventually facilitates successful constitutional reform. Certainly, there are good grounds for comparison. The various ways in which constitutions change in spirit without changing in letter at national level are mostly visible at EU level too. Perhaps the most subtle and pervasive way is through the gradual juridicization of political life through rights-based constitutionalism. The tradition goes back two centuries and, in the United States, has for all that time been a fundamental element of the political system, not merely in terms of upholding and gradually extending the rule of law and rights against the arbitrary exercise of power, but also in terms of interbranch regulation. Its basis in contemporary Europe is much more recent, but the establishment of constitutional courts and councils, and the evolution and acceptability of judicial review since the Second World War has been one of the most striking changes in the democratic process in Europe.31 Interestingly, it has even had its impact, mainly through the European Union, on a country like the United Kingdom, where otherwise a rights-based form of constitutionalism would have found far less fertile terrain (Prosser 1996). Certainly, there is every reason to argue that one of the most fundamental mechanisms by which the solidity and successful evolution of EC/EU institutions have been assured is through the ability of the European Court of Justice to secure, at an early date, the acceptance of two quite fundamental principles: the supremacy of European law, and the doctrine of direct effect. Without the, in practice almost universal, acceptance of these two principles, the EC could not possibly have developed as it did. In doing so, it was enormously assisted by the Commission and by the (ordinary) national courts, which co-operated closely with the ECJ, and never saw it as part of their remit to raise overarching questions of legitimacy which were the preserve of the politicians (Mancini 1991: 181–5). Paradoxically, however, the ability of the ECJ to push forward the Union's constitutional boundaries has appeared to face more constraints as it has become more visible. Partly this is because the big constitutional issues of recent years in the EU have become issues of interbranch

31

For a summary see Stone 1995.

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power and authority (Council versus Commission versus European Parliament versus individual member states), and partly because the very success of the ECJ in quietly and almost by stealth establishing the supremacy of European law has ﬂushed out into the open, but not resolved, some very uncomfortable questions about who (the ECJ or national courts) has ultimate judicial competence to interpret the limits of the Community competence (Weiler 1996: 528–33). This is a particularly serious problem when we consider other possible sources of change to the EU's constitutional conventions that have some analogy in national political systems. These include: ﬁrst, changes in the role of representative institutions; second, changes in the nature of party systems; and third, changes in the strength and centrality of the executive. Representative institutions were often able to develop much enhanced powers vis-à-vis the political executive in liberal democracies, even without formal constitutional modiﬁcation, simply in virtue of the development of norms about representative and responsible government. If this was a largely nineteenth century development, however, its counterpart in the ﬁrst half of the twentieth century tended in the opposite direction, as the need to co-ordinate policy, and extend the regulatory and distributive scope of government, led to the executive becoming the central focus of political life. In turn, changes in the process of social aggregation and hence in party systems backed these changes up, though the exact effect on constitutional practices varied hugely between liberal democracies, depending on the precise form of the party system itself. Now the common feature of all these changes is that, through familiarity and positive appraisal of their effects, they enable all actors in the political system (citizens, members of the opinion-leading élite, political leaders) to endow new or enhanced legitimacy on the relevant institutions. This legitimacy is certainly not always permanent, but it is an important part of the process by which institutional relationships develop, and institutional roles solidify. And the difﬁculty at the EU level is that institutions tend, by and large, to be second-order institutions, remote from, and only with difﬁculty understood by, ordinary citizens, and sometimes even opinion-leaders. Flags, anthems, symbols, and credit-claiming announcements notwithstanding, it is difﬁcult for the EU institutions to enhance their popular legitimacy, even when they acquire powers and use them effectively, because the effects have to be transmitted through, and by mediated by, the prism of national politics, where there are likely to be prodigious leakages of any credit that is there to be claimed. Moreover, in any inter-branch adjustments of power, it is far from clear that any loss of power by one branch when another, for very good reasons, asserts itself will really be understood and will lead to appropriate adjustments of legitimacy. It is far from clear, to take a recent example,

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whether revelations of sleaze or mismanagement in the Commission, which have enabled the European Parliament to capitalize on modest enhancements of power, vis-à-vis the Commission, already granted by Maastricht and Amsterdam, will do anything to improve its standing, visibility, or authority in the eyes of voters. Pessimists fear, on the contrary, that poor discrimination by the latter will lead to both branches suffering a net loss of legitimacy. The key point is that, linguistically, culturally, and procedurally, European institutions are remote and unfamiliar. Citizens have little contact with them, and the development of a contract-based tier of EU citizenship to conduct those policies which are most effectively conducted at a higher tier than the national state may well not actually lead to the transfer of legitimacy that might in reality be deserved, because few citizens really understand what is happening. Hence the difﬁculty of constructing a ‘European’ party system, of making the workings of the European Parliament visible and meaningful to its voters, or creating anything approaching the psychological nexus between the President of the Commission and public opinion that would enable him to assert more effective and co-ordinated leadership in the Commission. All three are key objectives of constitutional change that would-be reformers of the European constitution have held dear for many years. In principle, they do not require massive formal adjustments to the written form of the treaties, if any at all. Examples of equivalent developments in national political systems without prior constitutional change are widely available. Yet, at the EU level, such changes are, to say the least, glacially slow, even when detectable.

Conclusion What ﬂows from this discussion is that, irrespective of the theological position taken on the status of the EU's founding treaties—neo-constitutionalism in the making or traditional international law—there is a good deal to be learnt from applying the tools of comparative politics. But what is to be learnt is, unsurprisingly, not primarily that the EU itself is a nascent polity, susceptible to analysis in terms of the traditional nation state or federal system. It is difﬁcult to see either treaty reform or the development of institutions established by the treaties as very close to constitutional reform and development at national level. There are clearly very fundamental differences in the drivers, in the procedures and constraints, in the political context, and in the scope by which formal or de facto change can work through into long-term attitudinal change. The processes do however raise the same issues of governance in multitiered, institutionally complex national societies as at the EU level, and above all comparative political analysis can, by considering precisely where

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the differences lie, and by clarifying what they are, shed a good deal of light on the limits and successes of the reform process.

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Union: Legal Complexity and Political Dynamics (Brussels: Interuniversity Press), 23–34. Weiler, J. H. H. (1991). ‘The Transformation of Europe’, Yale Law Review, 100: 2403–83. —— (1995). ‘The State Über Alles: Demos, Telos, and the German Maastricht Decision’, Harvard Jean Monnet Working Paper, 6/95. —— (1996). ‘European Neo-Constitutionalism: In Search of Foundations for the European Constitutional Order’, Political Studies, 44. —— (1997). ‘Legitimacy and Democracy of Union Governance’, in Geoffrey Edwards and Alfred Pijpers (eds.), The Politics of European Treaty Reform: The 1996 Intergovernmental Conference and Beyond (London and Washington, DC: Pinter).

9 The European Union and the Bureaucratic Mode of Production Edward C. Page At ﬁrst glance, the operation of the European Union does not substantially challenge traditional empirical bureaucratic theory. The theoretical literature on bureaucracy is rather robust. Landmarks of bureaucratic theory have been based on studies conducted in highly diverse contexts, including employment bureaux, the forestry service, trade unions, hospitals, the armed forces, as well as in national, regional, and local governments. International organizations have been less speciﬁcally the focus of bureaucracy theory (but see Claude 1956). The European Union might be expected to be, in this respect, little more than another context in which such approaches may be applied. None of the cherished insights of the broad theory of organizations and bureaucracy are called into question uniquely by the particular environment within which EU bureaucrats work. Peters's (1992) analysis of the European Commission demonstrates this exceptionally well. He manages to apply, effectively and with ease, some of the landmark theoretical insights into how modern bureaucracies function, including: ‘issue networks’ and subgovernment, budget theory, the growth of government, policy failures, game theory, federalism, and bureaucratic politics. It is quite possible to envisage applying to the EU many of the other classic approaches to bureaucracy, including, to name a few, Downs's Inside Bureaucracy (1967), contingency theory, different varieties of theories of incrementalism, bureaucratic self-interest models (Niskanen 1971), not to mention power-dependence models (Rhodes 1988). Nor are the contours of the EU administration much of a puzzle for received knowledge about public administration when it comes to ﬁnding similar, if not identical, forms of structure and behaviour in the world outside the EU. The bureaucracy of the European Union has features of many different types of bureaucracy with which we are familiar—a continental European bureaucracy, an international bureaucracy, and even the federal bureaucracy of the United States. Its ofﬁcials have names familiar to those

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who have looked at continental European bureaucracies: Directors General, Directors, Heads of Unit. The institutions of the bureaucracy: Directorates, Directorates General, and cabinets are likewise common to many member-state administrative structures. The mode of appointment of ofﬁcials, through a complex mix of political and geographical balance, expertise and patronage, has many distinctive features (see Page 1997), but here the European Union would at most be one distinctive case among many, given the diversity of forms of political and merit appointments to the upper levels of member-state bureaucracies. The obvious institutional point, often raised, that the EU bureaucracy does not on the whole actually implement its own laws cannot be cited as its distinguishing feature. Central administrative structures of member states also quite often lack executant organizations for their decisions. Federal states tend not to vest service delivery functions in their national administrations. And they are not the only ones. Local governments in many states have responsibilities for delivering large areas of public policy, not to speak of non-state organizations (as in health service delivery and social security administration in some countries) or ‘arm's length’ agencies in countries such as Sweden, Germany, and the United Kingdom. Nor is there much in the argument that decision-making in the EU involves lower levels in the bureaucracy (Hay 1989: 28). If we look at the equivalent of the process of making EU regulations in a member state such as Britain, while there are obvious safeguards to ensure that junior ofﬁcials do not go it alone in developing secondary legislation, it is quite common for an ofﬁcial six grades below the top to be the most senior involved in doing the actual work in developing a regulation (see Page 2001). Very often key ﬁgures can be quite junior, belonging to grades well outside conventional deﬁnitions of a senior civil service. While we know little about the delegated legislative process elsewhere, it would be surprising if Britain were unique in this respect. So, on this basis, the EU bureaucracy is much like the rest. A few odd quirks that result from its multinational character, but nothing that looks particularly odd from the point of view of bureaucratic theory or the diverse range of empirical practice in European nation states. However, such a conclusion is counter-intuitive. The EU bureaucracy feels different. Unless this intuitive feeling is completely misplaced, understanding the nature of the difference between the EU and national administrative systems poses a challenge to existing theories of administration. There is nothing obvious about the EU that traditional theory cannot explain. And there are few obvious phenomena or structures within the EU that appear alien to the observer familiar with the public administration of member states over and above the sorts of unique features that can be found in any national bureaucracy. So

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why does it intuitively appear to be so different from that of a member-state bureaucracy? The purpose of this chapter is to put forward an argument that the differences between member-state bureaucracies and the EU bureaucracy lie in the mode of production of administrative outputs. The ﬁrst part sets out the nature of this mode of production, contrasting the ‘co-ordinate’ mode of production in the EU with the primarily hierarchical mode of most member states. The second part looks at the consequences of the co-ordinate mode of production: a level and degree of efﬁcacy of regulation that would be inconceivable under a hierarchical mode of production. The concluding part examines the limits of a co-ordinate mode of production—the legitimacy of the EU is especially closely linked to the ability of its bureaucracy to manage its programmes, and the co-ordinate mode of production is particularly weak in this respect.

Bureaucratic Modes of Production Bureaucracies produce practical expressions of public authority. Let us consider, with Weber (1972), the state as the holder of the legitimate use of the monopoly of force, and the government as the custodian of this monopoly within the framework and constraints of constitutional law. Because it is legitimate, the use of force never has to be applied or threatened—for the most part it is exercised by a whole range of laws and decisions. This exercise of authority may take the form of a major parliamentary Act or an individual land-use planning decision—both of these are generally accepted as legitimate by those to whom they apply. For the purposes of this chapter, let us look at one particular aspect of bureaucratic production: the elaboration of laws, rules, and regulations. While this is not the only output of a bureaucracy, it is one of the most important and distinctive. In member states the role of bureaucrats in the elaboration of laws, rules, and regulations can be classiﬁed as displaying a tendency towards hierarchy, in the European Union the bureaucratic mode of production can be classiﬁed as co-ordinate. Hierarchy refers to the dominance of the single bureaucracy in the deliberation and handling of regulations; in a co-ordinate mode of production bureaucrats share production with other groups and institutions. This distinction between hierarchy and co-ordinate draws on Damaška's (1986: 16) discussion of two ‘ideals of ofﬁcialdom’ developed in the context of an analysis of systems of justice and authority, although Damaška does not use the term ‘modes of production’ developed in this chapter. Moreover, the use of Damaška's terms emphasizes only one of his two main dimensions of distinguishing between systems: the predominance of a bureaucratic organization which unites ofﬁcials within a single organizational structure,

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complete with clear delimitation of a chain of superiors and subordinates. The second of his dimensions, the degree of technical specialization of ofﬁcials, is of less interest here since it does not directly produce a particularly marked difference between EU and member-state ofﬁcialdom—at the level of bureaucratic discussion of regulation it is not possible to argue that technical specialization is particularly dominant in the Commission as opposed to any or all member states. For Damaška (1986: 17) hierarchical systems are ones where ‘ofﬁcials are locked into a strict network of super- and subordination’, under co-ordinate models ‘they are rough equals, organized into a single echelon of authority’. Hierarchical systems have, according to Damaška, a variety of distinctive characteristics, many of them similar to the more familiar ‘classical’ conception of bureaucracy, such as the role of the organizational superior: conﬂicts within the organization are ‘referred to a common superior for resolution’ (Damaška 1986: 19); and decisions are subject to superior review. Yet in addition a variety of less familiar characteristics result from his ideal-type discussion. ‘Turf ’ conﬂicts are less likely under the hierarchical than the coordinate form of ofﬁcialdom since when professionals are stratiﬁed in a chain of subordination . . . and are thus under pressure toward unity and obedience, then the possessive ‘turf ’ psychology of specialists is mediated. The specter of superior audits promotes an ethic of cooperation, and the dynamics of hierarchical promotion contribute to a spirit of team playing. Those ofﬁcials whose desire to make a special impact obstructs the harmonious functioning of the organisation are likely to be bypassed for advancement. (1986: 21) Similarly, co-ordinate forms of ofﬁcialdom have distinctive empirical traits. Some are commonsense. For example, Damaška (1986: 25) points out that ‘decision makers situated in parallel can easily nullify the fruits of one another's efforts’. Others are less obvious, such as his observation that under co-ordinate authority there is a tendency for ofﬁcials to split hairs—‘as they make their way through the thickets of detail, they are driven to make ﬁne distinctions. Seldom are two cases alike; identity is elusive and divergent dispositions can easily be justiﬁed’ (Damaška 1986: 26). The question of the empirical characteristics of a co-ordinate mode of production will be developed further in the next section of the chapter. A hierarchical mode of production of laws and regulations can be found where the process takes place within a single bureaucratic organization structured by sets of hierarchical relationships. This is not to argue that bureaucrats are the only people involved in producing such regulations. Interest groups and other bureaucracies, whether national, regional, or local, may also participate. However, responsibility for law-making rests with the organization which conducts the processes of consultation and actually writes the

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law or regulation. Under a co-ordinate mode of production, ‘there is little opportunity for a spirit of exclusivity to develop. Insiders and outsiders . . . are not sharply distinguished . . . Few serious obstacles exist to block ofﬁcials from delegating some action to persons without authoritative functions’ (Damaška 1986: 24).

The Co-ordinate Mode of Production and the EU As with all ‘idealtypes’, echoes of one or other mode of production can be found in the ways in which the EU and any member state develop laws, rules, and regulations. However, the central argument of this chapter is that the EU's mode of production of legislation is uniquely close to the co-ordinate form, while that of member states is generally closer to a hierarchical form. The pre-eminence of the hierarchical mode of production in national bureaucracies derives from the concentration of authority through the parliamentary–cabinet system of government. In member states, as in the European Union, the origins of laws and other regulations are many and varied. They may originate from ‘policy’ decisions taken by political leaders, from interest-group pressure, from events, such as a public-health scare or from international treaties and obligations such as global non-proliferation agreements. Many are adjustments to pre-existing rules and regulations—abolishing one thing by creating one rule leads to consequent amendments in other related laws and regulations. Whatever the speciﬁc sources of regulations, the bureaucracy's role in producing rules and laws is, however, a delegated one. In member states as well as the EU bureaucrats are, whatever their actual power as experts with hands on control of the government apparatus, formally subordinate to political ofﬁcials, those in whom democratic legitimacy is vested. What makes the mode of production of rules in member-state bureaucracies closer to the hierarchical than the coordinate model is that the source which delegates is also the source which is generally required to approve the legislation. Characteristically in member states the authority to delegate is vested in a minister who has access to the authority of the collective government: the minister's agreement is needed before work can start on a rule or regulation and his signature or assent means that the regulation goes through. Such ministerial control clearly does not exist to the same degree in all member states. In a federal or quasi-federal system, ministerial assent is not sufﬁcient to secure the success of the legislation. Thus there is a danger that this generalization about the mode of production is at best conﬁned to unitary states. Before this question can be addressed, let us ﬁrst look at why one would characterize the EU as having a co-ordinate mode of production and see if the same applies to a federal state.

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A single source of authority for delegation contrasts with the position in the EU bureaucracy where no single authority can ensure that many of the rules produced by the bureaucracy can reach the Ofﬁcial Journal in the form they were written. While Commissioners, Directors General, or Directors may sanction ofﬁcials using their time to develop proposals for laws and other regulations, more than their sanction and agreement is generally required to make sure a law goes through. Before they can become law, proposals may require Council agreement, agreement with the Parliament, or agreement with various advisory and other ‘comitology’ committees—committees advising and supervising the Commission in its regulatory functions formalized under the 1987 Comitology Decision (Docksey and Williams 1994). This has signiﬁcant implications for the manner in which laws are determined. The concentration of authority in member states, and the variety of bodies whose agreement is required to legitimize rules, laws, and regulations in the European Union, means that the mode of production is very different in the EU to that in member states. In the development of legislation it is the norm in many member states, and sometimes a legal obligation, to consult exceptionally widely when any change in the law is being prepared. However, in member states bureaucrats conduct the consultation and have an exceptionally important role in shaping its outcome and thus have approaching a monopoly in the actual production of delegated legislation. In Britain, for example, ofﬁcials typically sift out the ‘relevant’ comments from interested parties, which should be taken on board, from the ‘irrelevant’ which can be ignored. In the EU, bureaucrats to whom rule-making is delegated do not have the same ability where, as in most cases, the rules have to be approved by some form of committee, whether advisory committee, management committee, regulatory committee under the ‘comitology’ procedures, or some other form of committee, expert group, or working group (Docksey and Williams 1994: 132–5). The composition of these groups varies, and can include representatives of interested organizations as well as ofﬁcials or delegates from member-state governments. Moreover, while the formal status of such committees varies, and while the actual inﬂuence of a committee may be stronger or weaker than its formal status (Buitendijk and van Schendelen 1995), the different arrangements and procedures constitute a ‘continuum of power to make or block decisions’ (Docksey and Williams 1984: 130). The extensive power of bureaucrats to decide which alternative views are ignored and which are taken into account in member states contrasts with the EU requirement that rules are typically negotiated with representatives of member states under the auspices of the Council, comitology, or other committees. This does not, of course, mean that Commission ofﬁcials are necessarily in a weak position, as there are plenty of examples of decisive Commission action in areas from competition to ﬁsheries policy (see Wallace

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1996). Still less does a co-ordinate mode of production mean that bureaucrats generally have a smaller role in the process of rule-making—multilateral bargaining is typically dominated by permanent ofﬁcials from the EU and member states. Rather, the co-ordinate mode of production affects the way bureaucrats go about deﬁning and securing objectives, by seeking and adapting to a wider basis of support, often support in member-state bureaucracies, rather than securing the consent or support of direct political superiors. The constitutional position of the bureaucracy which shapes the coordinate mode of production in the EU is further reinforced by the relative shortage of technical skills required to elaborate laws, rules, and regulations. We know that some technical issues cannot be handled satisfactorily by EU administrators—such gaps have to be ﬁlled by ofﬁcials from member-state bureaucracies in some form or other. The list of hazardous wastes contained in the 1991 Hazardous Wastes Directive, for example, was written largely by national ofﬁcials, above all German civil servants, as ‘each time the Commission staffers located a draft, they were inundated with criticisms that this or that waste was incorrectly listed’ (Hunter 1995: 85). Gaps in technical expertise can be ﬁlled by a variety of mechanisms. ‘External resource’ ofﬁcials can be recruited on a temporary basis, outside the formal staff establishment: in 1998 the budget of the Commission contained provision for 1,709 such appointments, 822 of these were A grade ofﬁcials. Although we have few ﬁrm ﬁgures to deﬁne precisely how widespread such practices are, temporary agent status is generally understood to be a major mode of transit for seconded ofﬁcials to pass into permanent EU employment. The permanent representations of the member states contain 660 senior national ofﬁcials who also participate in the production of rules, laws, and regulations. However, it is difﬁcult to quantify the exact number of ofﬁcials from member-state bureaucracies who travel to Brussels to participate in the making of EU policy and regulation. We do have a number of indications that it is quite substantial. The number of true secondments to the EU in 1998 is given in the EU budget as ‘582 man years’, a decline from the early 1990s peak of 650 (see Page 1997). If we regard man years as equivalent to one person in a post, this would mean that seconded ofﬁcials alone form a group about one-eighth the size of permanent A grade Commission ofﬁcials. The lack of technical skills within the relatively small bureaucracy of the EU which, along with the constitutional structure of the EU, underpins the co-ordinate mode of production, becomes even more apparent when one considers the role of member-state ofﬁcials in writing the implementing laws in their member states. Leaving aside federal systems for a moment, once a law is written in a national bureaucracy and it appears in the statute books, the ﬁnal text constitutes the law. In the European Union, the passage of a legal text is often just the beginning. With directives, these have to be transposed

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into national law, and thus the law-making process is in principle a collaborative one between national and EU ofﬁcials. Even the many regulations which have direct effect in member states have to be converted into domestic law for implementation purposes. Legislation is required to implement directives and, in many cases, regulations passed by the Commission and Council. While regulations have direct effect in member states, enforcement measures may need new legislation. In the United Kingdom, one estimate suggests that around one in six items of secondary or delegated legislation (of which between 2,000 and 3,000 items are passed each year) originate from EU obligations (Page 1998). It is not possible to estimate with any degree of conﬁdence precisely how much of the time of member-state ofﬁcials who are formally attached to national ministries is spent on helping devise EU legislation, whether by taking a leading role in drafting or by negotiating and consulting with the Commission. The whole process of member-state participation in drafting EU legislation through formal and informal mechanisms suggests a substantial contribution of administrative expertise by member states which, because it is not generally covered by the EU budget, is extremely difﬁcult to assess. There are some 300 committees that have to be consulted under comitology procedures—that is, procedures that require that legislation passed by the Commission is subject to some form of consultation with, and under some circumstances formal approval by, member-state representatives (see Docksey and Williams 1994). Moreover, there is a host of other advisory and formal and informal working groups within which national ofﬁcials play an active part. Wessels (1998) carefully assesses the impact of the impact of participating in European policymaking on national bureaucracies and concludes that ‘one quarter of all higher civil servants from Bonn ministries were in 1995 personally involved in Brussels sessions’. A co-ordinate mode of production gives the EU the capacity to develop and apply legislation that would be inconceivable if it had to try to do so through its own resources. The discussion so far has emphasized the contrast between the EU as an emerging federal system and the unitary systems of member states. The question now arises of whether the co-ordinate mode of production is simply a fancy term for ‘federalism’, and there is simply nothing distinctive at all about the EU bureaucracy in this respect. After all, Germany has been described as a system of ‘cooperative federalism’ for many years (Geib 1965). The multilevel character of policy-making in Germany has been more recently, and more critically, characterized as Politikverﬂechtung: ‘the characteristic interpenetration of federal legislation and Land [i.e. regional] administration’ (Scharpf et al. 1976: 31). Under Politikverﬂechtung neither federation, Land, nor even local governments ‘control’ the policy process. The terms used to analyse German federalism (for example, Scharpf's (1988) ‘joint decision

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traps’) can be and have been applied to the EU, so what makes the EU administration different from a federal bureaucracy? To some extent the distinction between German and EU administration in this respect is a matter of degree. The Politikverﬂechtung model was applied in its original form to speciﬁc aspects of federal activity—Gemeischaftsaufgaben and Investitionshilfen —which only account for a small portion of federal activity (Scharpf et al. 1976: 71). Certainly, other constitutional arrangements (for example, the ‘framework law’ responsibilities of the federal government) serve to give Länder a constitutional role in the development of federal initiatives. However, the role of the Länder in federal government, as opposed to the provision of public services in Germany, should not be exaggerated. While virtually all legislation is subject to some form of approval from other institutions within the EU, in Germany not all regulations require the approval of the Länder. In recent years just over one-third (38 per cent) of all federal regulations (Verordnungen) have required Bundesrat approval (that is, were zustimungsdürftig: see Statistisches Bundesamt 1998: tables 4.8, 4.9). More importantly, the difference between the EU and a federal model such as Germany lies in the fact that Politikverﬂechtung is a model which concentrates upon what may be described as ‘implementation’ of programmes. The central argument of this chapter is that in the production of laws and regulations, the EU is a highly distinctive bureaucracy because it largely depends upon other bodies and groups outside the formal structure of the Commission. German ministries, even those responsible for areas in which Länder play an important role, maintain their capacity to produce federal regulations in-house. For example, the federal German Environment Ministry and its agencies employed 2,600 ofﬁcials in 1996; DG XI, responsible for Environment, Nuclear Safety and Civil Protection employed 339 permanent and temporary ofﬁcials. As Derlien (1995: 66) points out, the ‘pattern of confederate federalism has not prevented over time more and more policy areas becoming regulated by federal legislation . . . federal legislation has now superseded Länder competences in many policy areas’. While the production of legislation in Germany, as indeed in unitary states, requires extensive consultation, federal ministries actually produce the legislation themselves in a way that the EU administration does not. Therefore it is possible to talk about a distinctive EU bureaucratic mode of production.

Consequences of a Co-ordinate Mode of Production in the EU Large-Area Implementation A co-ordinate mode of production appears in many respects to be highly effective as a means of governing Europe. To see the achievement of the

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administrative system of the EU in this light it helps to cast our minds back to the implementation literature of the 1970s. Pressman and Wildavsky's Implementation (1973) had, as part of its subtitle, ‘why it's amazing that federal programs work at all’. The book had a huge impact on the study of public policy, and it also played a large part in expanding interest in this branch of political science. Other implementation studies tended to reinforce the central message of the 1973 book: that implementation is highly complex and what results from the implementation process (if anything actually does result from it) bears little resemblance to what those who passed laws and granted money to programmes intended. One of the main reasons for implementation difﬁculties was the number of ‘clearance points’ between the original set of decisions on a policy and the activities on the ground that were supposed to follow: the host of individual decisions about hiring staff, locating ofﬁces, spending money, and such like. Christopher Hood's (1976) Limits of Administration added more reasons for us never to expect ‘perfect administration’, including lack of funding, lack of time, and ‘multiorganizational suboptimization’ (broadly, too many cooks spoiling the broth) and the imprecision of objectives. From this point of view, being able to produce laws which are implemented throughout ﬁfteen member states with very different cultures of law and public administration and speaking ten different languages is a substantial achievement, and it is difﬁcult to see how this could have been achieved without a co-ordinate mode of production. No single bureaucracy is likely to have either the numbers of staff or the technical and legal knowledge necessary to be able to develop regulation on such a grand scale. We cannot calculate how many laws are faithfully implemented on the ground in each member state. We do, however, know that formal levels of implementation are quite high, around 90 per cent (that is, where the Commission is notiﬁed of national legislation which purports to implement EU directives and it accepts it as such). In many areas, of course, such national implementation takes the form of ancillary legislation since some forms of legislation, above all regulations, have direct effect in member states and do not require transposition into national law. Moreover, while we cannot estimate the degree to which directives and regulations are strictly implemented in the ﬁeld, we can see that member states no longer shape their own policies across a wide area—customs, agriculture, environment, ﬁsheries, telecommunications, utilities, trade, to name a few—but are guided by the imperatives of EU legislation.

Productivity We can then go on to underline the impressiveness of this achievement by pointing out that this is all done with a very small staff. The efﬁciency of the

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EU politico-administrative system derives to a signiﬁcant degree from the fact that it externalizes the massive costs of governing the Union to member states. The EU is cheap and effective, in part, because, of those involved in devising, drafting, and applying EU legislation, EU ofﬁcials are probably only a minority. The permanent A grade administrative staff of the Commission is under 5,000. There has certainly been a substantial growth in the number of administrators in the Commission (Figure 9.1), especially since 1987. However, if we look at the productivity of the Commission, as measured in a rough and ready way by the number of laws (including Commission and Council regulations, directives, and decisions), we see no general decline in productivity of the Commission (Figure 9.2). Between 1967 and 1980, the productivity of the Commission rises from 0.54 to 0.99 laws per administrator, declining steadily thereafter until 1993, when it reached 0.49, but then growing to 0.82 in 1995, 0.71 in 1996, and 0.73 in 1997. Overall, however, the increase in A grade administrators, from 825 in 1967 to 4,969 in 1997 has generally not resulted in a general decrease in productivity despite the general drop in productivity between 1980 and 1993. Figure 9.1. The Growth in Commission Administrative Staff (source: Budgets of the European Union)

In addition to such positive achievements, a co-ordinate mode of production has led the EU to avoid some of the negative effects a large bureaucracy seemed destined to have on European integration. Monnet, when thinking about the design of the European bureaucracy before the creation of the European Coal and Steel Community envisaged a very small, lean group, adding that if the bureaucracy grew above 200 ‘we shall have failed’ (Monnet

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Figure 9.2. Productivity in Commission Legislative Activity (source: Celex Legislation; Annual Budgets of the Europe Union)

1978). The ECSC had more ofﬁcials than this almost as soon as it started work. Coombes (1970) took up the argument that a bureaucracy has a stiﬂing effect on European integration. He argued that the bureaucracy was a dead weight to closer integration within Europe: the Commission would get bogged down running things and would fail to look above the routine towards a vision of closer integration. The more the EU became a conventional bureaucracy, the further the prospects of European integration would recede. Such predictions appear to have been misplaced, not simply because of the progress of European integration since 1970. The role of the Commission as one of the motors of integration also suggests the fears that it would create a dead weight of bureaucracy were unfulﬁlled. One reason that such fears failed to materialize is that the Commission did not actually develop a traditional hierarchical bureaucracy as far as law-making is concerned. None of this is to suggest that the EU has produced ‘perfect administration’ (Hood 1976), with uniform application of laws throughout the EU. The variability of national implementation of directives and regulations on issues ranging from ﬁsh quotas through arms trading and water quality remains a contentious point. However, by making EU legislation central to domestic policy activity in a wide range of areas in member states, it has proved its capacity to make the major laws and minor regulations which are producing closer integration in Europe. A co-ordinate mode of production not only gives the Commission the capacity to legislate in terms of personnel, knowledge, and expertise, it also gives it greater legitimacy as member states participate in the process of law-making.

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Decision-making Characteristics While the two characteristics of the co-ordinate mode of production help us to explain the success of the EU bureaucracy, Damaška 's analysis of law and legal systems also helps pinpoint particular empirical features of the way in which policies are processed as the consequences of a co-ordinate mode of production. To develop this point we need to take the exposition of Damaška's analysis a little further. In addition to two types of ‘ofﬁcialdom’, there are two types of state: a ‘reactive state’ and an ‘activist’ state. These distinctions correspond somewhat to older distinctions between laissez-faire and dirigiste types of regimes. ‘The task of the reactive state is limited to providing a supporting framework within which its citizens pursue their chosen goals. Its instruments must set free spontaneous forces of social self-management’ (Damaška 1986: 73). The activist state does more than adopt a few propulsive policies and welfare programs. It espouses or strives toward a comprehensive theory of the good life and tries to use it as a basis for a conceptually all-encompassing program of material and moral betterment of its citizens . . . Existing social institutions and social practice command little deference: as it exists, society is defective and in need of improvement. Thus if we look not only at the mode of production, but also at the broad forms of objectives behind the production of laws, rules, and regulations, a variety of characteristic features follows. If we deﬁne the EU, certainly after the period of ‘eurosclerosis’ in the 1980s, as a system operating under conditions similar to an activist state, this places the EU close to Damaška's (1986: 226–8) activist state with co-ordinate ofﬁcialdom, for which there is ‘no precise analog in conventional theory’. While Damaška's analysis at this point moves further away from generalizations about forms of state and becomes more directly concerned with the legal process, several of the distinctive features of EU decisionmaking noted by other authors point to characteristics of Damaška's analysis of co-ordinate ofﬁcialdom in pursuit of activist goals. In terms of the origins of policy, Richardson notes the ‘uncanny resemblance’ between EU practice and Kingdon's (1984) observation that ‘it is almost impossible to trace the origin of a proposal. “This is not like a river. There is no point of origin” ’ (Richardson 1996a: 17). Such a feature is characteristic of a co-ordinate mode of production in an activist state where ofﬁcials can ‘free range’ in their approach to developing policy proposals: ‘In the activist mode, coordinate ofﬁcials are self-starting, instituting proceedings on their own, independently of any actual controversy, complaint or request . . . . [T]hey may initially stand back, letting outsiders bring forward matters needed for the decision’ (Damaška 1986:227). A related point raised by Richardson (1996a) is the tendency for policy to develop in ﬁts and starts as

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‘separate streams of problems, policies and politics come together at certain critical times . . . Solutions are joined to problems, and both of them are joined to favourable political circumstances’ and have a chance of success only when problems and circumstances coincide to form ‘policy windows’. Damaška's analysis suggests this is characteristic of co-ordinate ofﬁcialdom seeking activist objectives. Activist objectives require that ofﬁcials search for answers to policy problems, but such searches are sui generis: the methodical probing by state ofﬁcials, which can be stretched over time and divided into stages with subtasks for specialised ofﬁcials, is absent. Absent is also an all-encompassing ofﬁcial dossier—crucial to decision making—which coagulates the results of widely scattered activities into a solid whole. Inquiries carried out by coordinate ofﬁcials are less structured and temporarily more compressed; . . . the apparatus . . . functions in sporadic bursts of activity, devoting continuous blocks of time to its tasks. (Damaška 1986: 226) The co-ordinate mode of production does not limit the role of bureaucrats in the decision-making process, despite the great importance of non-state actors in EU policy-making noted by many observers of the EU and the possibility of ‘capture’ by interests (see Menon and Hayward 1996: 272). In the processing of issues in co-ordinate–activist systems, ‘the collection of material for the decision and the taking of other necessary steps are easily entrusted to outsiders, including citizens whose interests are directly implicated in the ofﬁcial inquiry’ (Damaška 1986: 226). In fact, the boundary between the ofﬁcial and the outsider is blurred. Yet in the co-ordinate system outsiders cannot ‘be placed in positions where they could frustrate or compromise the goals of the activist government; ultimate control over proceedings therefore remains in ofﬁcial hands’ (Damaška 1986: 226–7). Ofﬁcials thus may allow others to initiate the process leading to decisions but ‘intervene whenever they feel that the attainment of the right result so requires . . . activist ideology requires that they be committed to the realizaton of state policy and that they reach the optimal result’ (Damaška 1986: 227). The form this mechanism can take in the policy-making structure of the EU is suggested by Richardson (1996b: 48) who points to the ability of the Commission to ‘choose which body of expertise to mobilise at any one time’. In fact, under the co-ordinate system the role of bureaucrats can be at least as powerful, if not more so, than under a hierarchical system, since they can make use of their powers ‘unconstrained by bureaucratic routine, rigid regulation or hierarchical supervision’ (Damaška 1986: 227), but they do not use conventional bureaucratic chains of command. At its most activist, the Commission under Delors achieved its integrationist objectives through going around or even subverting formal hierarchical arrangements. Ross's (1995) study of Delors's Commission leadership showed how, by skilful use

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of networks within the Commission mobilized by his cabinet, he was able to press forward an agenda which made a decisive contribution to policies including the Single European Act and Economic and Monetary Union. The predictions of Monnet (1978) and Coombes (1970) which assumed that the EU bureaucracy would be subject to the same sorts of pressures towards inertia that they associated with national bureaucracies have been largely falsiﬁed by developments in the EU since the 1980s; the character of a co-ordinate system offers potential for activist bureaucratic entrepreneurship.

Conclusions: Limits to the Co-ordinate Mode of Production In the European context the co-ordinate mode of production represents a rather efﬁcient means of producing laws which shape domestic policies of a diverse group of member states. This is a considerable achievement, especially when viewed from the often somewhat jaundiced perspective of implementation theory. It displays many of the hypothesized characteristics of a lawmaking system based upon a co-ordinate form of ofﬁcialdom with the policy aspirations of an activist state. Yet while it is possible to locate the EU in a theoretical schema, it is not a traditional public administration schema, but rather an application of an approach designed to analyse legal processes. Moreover, the uniqueness of the EU lies in the degree to which the mode of production of laws approximates the conditions of a rather unusual co-ordinate administrative system—and, even more unusual, one with strong and extensive legislative and regulatory ambitions. The characteristics of this system do not necessarily follow widely accepted notions of how bureaucracies operate: administrative fragmentation does not necessarily lead to a bureaucratic weakness or immobilism. The co-ordinate mode of production is strongly underpinned by the fusion of intergovernmental and supranational features within the organization of the Commission. The Commission is in outward form a supranational administrative system but in just about every major aspect of its organization it incorporates to some degree the nationality principle according to which member states can make an impact. In recruitment, where ‘geographical balance’ is sought among the different nationalities of the member states, the consequences of the nationality principle include the virtual split between the most senior ranks of the bureaucracy, promotion to which generally requires some form of political contacts with the administration of a member state or a commissioner, and the lower ranks of merit appointments. Hierarchy cannot ﬂow smoothly from top to bottom in an organization where ofﬁcials have external sources of authority and external bases of identity as nationals of a particular member state.

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The nationality principle is also at the heart of the organizational mess of the Commission's highly fragmented structure. This structure has more Directorates General than national governments generally have ministries, despite being responsible for fewer services, and has many units and subunits which appear sometimes to duplicate tasks or perform tasks excessively ﬁnely divided from each other (see Page 1997). For example, until recently there were three Directorates General for external relations. While the Commission has started to reform itself (European Commission 2000), it remains to be seen whether this is truly the ﬁrst step in a longer process of comprehensive reform. The reform measures announced are partly a result of the 1999 crisis when the Commission resigned following the Committee of Independent Experts' Report which sustained some of the charges of nepotism and maladministration levelled against members of the Santer Commission. They are also partly a result of the anticipated consequences for the structures of EU decision-making that would result from the envisaged expansion of EU membership to include countries of Central and Eastern Europe and featured in this context in discussions leading up to the Amsterdam Treaty of 1998. However, there is also a longer tradition of reform aimed at streamlining the Commission dating back at least to the Spierenburg Report (Spierenburg 1979) and continuing through to Commissioner Erki Liikanen's ‘MAP 2000’ (‘Modernisation de l'Administration et de la Politique du Personnel à l'horizon 2000’) proposals of 1997 (European Commission 1998: 444). If we consider the Commission as part of a co-ordinate mode of production of legislation we may develop further perspectives on the question of the internal organization of the Commission. As Damaška points out, there is an inherent tension between a co-ordinate mode of production and an activist state. If an ofﬁcial believes a ‘decision by a parallel ofﬁcial is erroneous, he is ready to block its execution or to contemplate some other constraining action’. Since co-ordinate structures are ‘replete with jurisdictional redundancies and vaguely shared authority, the opportunities for such collateral action are legion, even when one allows for shared values and the ideological unity of coordinate ofﬁcials’. This tension between blockage and the desire to act is greater ‘the more activist the government’ and, as this tension develops, the more the system ‘begins to resemble an octopus whose tentacles lack proper neural interconnections’ (Damaška 1986: 228). Changes in organization might not be an effective ﬁx for the likely enlargement of the EU, or even address the question of corruption, if the broad principles on which the EU bureaucracy is based are left largely unchanged. The co-ordinate mode of production works exceptionally well in delivering legislation which applies throughout the Union. One lesson from the Commission

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débâcle of 1999, if it was not apparent long before, might be that co-ordinate principles do not work as well in running services or, above all, administering grants. It might therefore be worth separating out these different activities when developing blueprints for reform: what is appropriate to law-making might not be appropriate to designing an executant bureaucracy. The structures, procedures, staff rules, and regulations required for a co-ordinate bureaucracy making laws are not necessarily required for a body of ofﬁcials engaged in the direct or indirect delivery of public services which might better be organized through mechanisms closer to the hierarchical ideal. If we concentrate on the legislative and rule-making role of the Commission, the effects of any streamlining are likely to be limited in two respects. First, they are likely to be limited because of the scale of potential opposition to root-andbranch reform measures from, among others, the unions of EU ofﬁcials as well as member states eager to maintain the number of ‘their’ ofﬁcials in key positions. Second, they are likely to be limited because the working methods of the Commission, at least as far as lawmaking is concerned, are structured more by the co-ordinate mode of production it has to employ than the somewhat bewildering Commission organigram. In so far as the co-ordinate mode of production threatens to become more unwieldy in a much-enlarged EU, Damaška's analysis suggests an alternative approach to avoid the potential for delay and blockage: reducing the activism of the Union. ‘Subsidiarity’ is a rather vague notion that suggests that responsibility for regulation should be located at ‘the lowest possible level’—the EU should act only when member-state governments cannot do so effectively. One way of reducing any potential overload of the bureaucracy caused by the increase in functions and membership of the EU is to try to take the notion of subsidiarity, or something like it, more seriously.

References Buitendijk, G. J. and van Schendelen, M. P. C. M. (1995). ‘Brussels Advisory Committees: A Channel for Inﬂuence’, European Law Review 20(1): 37–56. Claude, I. L. J. (1956). Swords into Plowshares: The Problems and Progress of International Organization. London: University of London Press. Coombes, D. (1970). Politics and Bureaucracy in the European Community: A Portrait of the Commission of the EEC (London: Allen & Unwin). Damaška, M. R. (1986). The Faces of Justice and State Authority. A Comparative Approach to the Legal Process (New Haven, Conn.: Yale University Press). Derlien, H.-U. (1995). ‘Public Administration in Germany: Political and Societal Relations’, in J. Pierre (ed.), Bureaucracy in the Modern State (Aldershot: Edward Elgar). Docksey, C. and Williams, K. (1994). ‘The Commission and the Execution of Community Policy’, in G. Edwards and D. Spence (eds.), The European Commission (London: Longman).

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Downs, A. (1967). Inside Bureaucracy (Boston, Mass.: Little Brown). European Commission (1998). General Report on the Activities of the European Union 1997 (Luxemburg: Ofﬁce for Ofﬁcial Publication of the European Communities). European Commission (2000). ‘Time for a change in Europe's Public Administration’, (Brussels, European Commission), http://europa.eu.int/comm/reform/index–en.htm Geib, E. (1965). ‘Verwaltungseinheit: Prinzip und Gegentendenzen’, in F. Morestein Marx (ed.), Verwaltung: Eine einführende Darstellung (Berlin: Duncker & Humblot). Hay, R. (1989). The European Commission and the Administration of the Community (Brussels: Commission of the European Communities). Hood, Christopher C. (1976). The Limits of Administration (London: John Wiley). Hunter, R. (1995). ‘The Problematic EU Hazardous Wastes List’, Environmental Law Review (Mar.) 83–8. Kingdon, J. W. (1984). Agendas, Alternatives and Public Policies (New York: Harper Collins). Menon, A., and Hayward, J. E. S. (1996). ‘States, Industrial Policies and the European Union’, in H. Kassim and A. Menon (eds.), The European Union and National Industrial Policy (London: Routledge). Monnet, J. (1978). Memoirs (London: Collins). Niskanen, W. A. (1971). Bureaucracy and Representative Government (Chicago: Aldine). Page, Edward C. (1997). People Who Run Europe (Oxford: OUP). —— (1998). ‘The Impact of European Legislation on British Public Policy Making: A Research Note’, Public Administration, 76/4: 803–9. —— (2001). Governing by Numbers: Delegated Legislation and Everyday Politics (Oxford: Hart). Peters, B. G. (1992). ‘Bureaucratic Politics and the Institutions of the European Community’, in A.M. Sbragia (ed.), Euro Politics: Institutions and Policymaking in the ‘New’ European Community (Washington, DC: Brookings Institution). Pressman, Jeffrey L., and Wildavsky, Aaron V. (1973). Implementation (Berkeley, Calif: University of California Press). Rhodes, R. (1988). Beyond Westminster and Whitehall: The Sub-Central Governments of Britain (London: Allen & Unwin). Richardson, J. J. (1996a). ‘Policy Making in the EU: Interests, Ideas and Garbage Cans of Primeval Soup’, in J. J. Richardson (ed.), European Union: Power and Policy Making (London: Routledge). —— (1996b). ‘Actor-Based Models of National and EU Policy Making’, in H. Kassim and A. Menon (eds.), The European Union and National Industrial Policy (London: Routledge). Ross, G. (1995). Jacques Delors and European Integration (Cambridge: Polity Press). Scharpf, F. W. (1988). ‘The Joint Decision Trap: Lessons from German Federalism and European Integration’, Public Administration 66/239: 239–78. ——Reissert, B., and Schnabel, F. (1976). Politikverﬂechtung: Theorie und Empirie des kooperativen Föderalismus in der Bundesrepublik (Kronberg: Scriptor).

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Spierenburg, D. (1979). Proposals for Reform of the Commission of the European Communities and its Services (Brussels: Commission of the European Communities). Statistisches Bundesamt (1998). Statistisches Jahrbuch für die Bundesrepublik Deutschland 1998 (Wiesbaden: Statistisches Bundesamt). Wallace, William (1996). ‘Government without Statehood: The Unstable Equilibrium’, in Helen Wallace and William Wallace (eds.), Policy Making in the European Union (Oxford: OUP). Weber, M. (1972). Wirtschaft und Gesellschaft, 5th ed. (Tübingen: JCB Mohr). Wessels, W. (1998). ‘Comitologie: Fusion in Action. Politico-Administrative Trends in the EU System’, Journal of European Public Policy, 5/2: 209–34.

10 Image and Illusion in the Design of the EMU James Forder If the euro is a success, its introduction may well develop into the foundation myth of a new European nation, just as that of the currency reform did in the Federal Republic of Germany. For that to happen, amongst many other things, the construction of the European Central Bank must be shown to be able to meet the tasks before it, and the hope that it will do so seems to rest gently on some fashionable economic theory, but much more heavily on the idea that a successful central bank can be created on the model of existing examples. The theory in question is the doctrine that monetary policy can have no lasting effect on the level of employment, and no beneﬁcial effect on the rate of growth. Therefore that it should succeed in stabilizing the price level is as much as can be hoped for from it. Even this, it is said, is impossible if elected governments have control of it. On this basis, it is supposed that there are no serious normative issues for monetary policy-makers to resolve, and therefore no loss in their not being subject to democratic control. On the other hand, the advantage of that arrangement is a smoother operation of policy, and the avoidance of avoidable ﬂuctuations. So the statutes of the European Central Bank aim to isolate it from all political inﬂuence by making it the most independent central bank in the world. But in any country, or group of countries, there are many more inﬂuences on the conduct of monetary policy than the statutory provisions of the central bank, and how the behaviour differs from what might be envisaged on the basis of the statutes is a problematic and unpredictable matter. Certainly one would expect historical inﬂuences, whether shortterm or long-term, as well as the self-perception of the central bank and other actors to be important. And the political circumstances in which policy is made should not be ignored, because these go well beyond the question of reducing unemployment before an election.

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In the European case, although the existence of a number of academic studies purporting ﬁrst to measure independence and then to discover that it is a key determinant of inﬂation outcomes have become well known, it is not clear that they were really essential in the design of the European Central Bank. One consideration is that the example of the Bundesbank was much more important than simply as one data point in these studies. The idea that West German policy-making was special and enviable because of the status of the Bundesbank came to be both a large part of the effective substance of the case for independence, and part of the explanation of the great inﬂuence exerted by the Bundesbank over the Maastricht negotiations. In addition, there was the issue of what alternative there might be to independence if monetary union was to symbolize European Union by having policy-making brought within the Community institutions. It is no great concession to the case for independence to doubt that effective policy would be made by the Council of Ministers on the basis of any of their voting systems. Equally, however much one might hope for the European Parliament to grow into an effective supervisor of a wider range of executive activities, to hand over monetary policy to it at present would be a dangerous—not to say farcical—way of proceeding. But if these were the factors that led to the design of EMU, whether any of them, coolly considered, really makes a convincing case for the institutional design we have is another matter. Is it, ﬁrst of all, the case that one can have conﬁdence in multi-country studies of ‘independence’ in designing or redesigning institutions for other countries? Or is it safe to suppose that a working model—or apparently working model—from West Germany can be imposed on the EU, to similar good effect? And if these things are not safe presumptions, what are the consequences of having proceeded willy-nilly to create such an institution for want of a better way to satisfy a dream?

States and Independence: The Limits of Economic Theory To many observers, multi-country empirical studies of central bank independence are the scientiﬁc anchor of all proposals relating to the subject. The underlying supposition has been that elected governments beneﬁt from a loosening of policy before elections despite the eventual economic damage this does. Since politicians are presumed to be self-interested, and voters incapable of punishing this behaviour, it is concluded that democratic control of monetary policy is dysfunctional. This view has been taken to be conﬁrmed through the construction of indexes of statutory characteristics of central banks, and the discovery that these are correlated with inﬂation. Of these, a series of unpublished papers, starting with Parkin and Bade (1980), and given

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much publicity by Alesina (1988), is the most inﬂuential, being picked up by Emerson et al. (1992) speciﬁcally in relation to the European Central Bank. Many objections have been made to this analysis, ranging from those of Forder (1998) and Mangano (1998), to the effect that their data are wrong, to those like Posen (1998) that the hypothesis stands no detailed econometric scrutiny. But perhaps the most fundamental doubt concerns the issue of whether there is any assurance that the statutes of central banks determine their behaviour. The analysis in effect assumes without comment, and one might speculate, misleadingly, that a common legal pattern applied to different countries will generate a common outcome. At the very least, this is an assertion that would be questioned by many if not most political scientists. Indeed, Wright (1997: 172) speciﬁcally attributes his interest in institutions to the question of ‘why apparently similar institutions [in different countries] have taken such divergent paths’. In particular, I believe that three aspects of the question deserve more consideration than they have had. The ﬁrst is whether the legislation really determines who sets policy or whether, in contrast, there might be an informal rule, or a normal practice, which gives practical control to the government even when the legislation says that the central bank sets policy. Equally, the circumstance of a non-independent central bank having practical control over policy is entirely conceivable. If it happened to be that the central bank's advice was respected, it could be overwhelmingly the norm for it to be accepted. There is no real issue here of the respect for the rule of law since, even if it is the case that practice differs from what the statutes suggest, there need be no implication that any of the parties concerned believe that policy is set in an inappropriate manner, particularly when the statutes themselves may have been inherited from a period when understandings about policy priorities, and therefore of the appropriate way to make policy, were very different. Yet the statute-reading methodology in effect defends the hypothesis that ‘What the statutes say, irrespective of the actual underlying behaviour of the actors, is a key determinant of outcomes.’ Secondly, there is the issue of what objectives the central bank pursues even if it does have practical control over policy. There is a well-established view in public choice theory, originating with Weingast and Moran's (1983) study of the change of policy of the ‘independent’ Federal Trade Commission when the political make-up of their Congressional overseers changed, that he who pays the piper can get his tune played without needing actually to call it. In extreme form, the claim would be that, whilst ultimate power resides with the government, their wishes will be implemented by the central bank. The precise nature of ‘ultimate power’ depends on the motivations of those in the central bank but it would be unexceptionable to suppose that important considerations would include maximizing its budget and its control over its

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budget; its inﬂuence over as wide a range as possible of policy; its prestige both domestically amongst policy-makers and sectoral interests, perhaps particularly the ﬁnancial sector, and internationally, perhaps amongst other central banks. The range of the elected government's control over these things varies, but is probably never negligible, and in some cases is almost complete. Why, then, it is supposed that a central bank will ﬁnd it in its interests to defy what it knows to be the wishes of the government, even if statutes and norms of behaviour give it the power to do so, is something of a puzzle. Leaving aside these inconveniencs for the statute-reading methodology, a third problem really becomes the crux. Even supposing that the central bank has complete, practical control over the setting of interest rates, and has no interests beyond the control of inﬂation, does one suppose it would never have an incentive to set policy according to political, and indeed, party-political objectives? Such a central bank would, by assumption, be immune to socialization into the policy-making community, and to manipulation of its bureaucratic incentives, but it would still, at least on occasion, have incentives to manipulate elections. This is because an exclusive focus on the achievement of low inﬂation would in itself motivate assistance to a government which is expected to pursue counter-inﬂation policies outside the area controlled by the central bank. Similarly, opposition to one disposed otherwise would be entirely in accordance with self-interested behaviour of a central bank intent on nothing but controlling inﬂation. Therefore, even a central bank which is entirely careless, on its own account, of its continued independence would take note of the likely reaction in ﬁnancial markets to the election of a government which seemed likely, if necessary, to repeal that independence. If, because of this, an exchange-rate crisis threatens, then a central bank that cares only about inﬂation will certainly act, if it can, to avert the election of such a government. Even if its independence is secure, perhaps because of strong public support speciﬁcally for that arrangement, it would take note of the implications for inﬂation of an excessively expansionary ﬁscal policy. And an inﬂationary impetus can be generated in many other ways—it is an argument advanced against a minimum wage, for example, that they cause a general increase in wages, and hence in prices. Many other examples could be suggested which would give a central bank, even one immune to all other inﬂuences, every incentive to set policy in accordance with electoral objectives: the very essence of nonindependent behaviour. None of these points, it should be noted, is to suggest that independence is impossible, nor that statutes could never have an effect on policy. They are merely to say that ‘independence’ should be understood as a pattern of behaviour, and speciﬁcally one that ignores elections and other matters of similar political, but not monetary, importance. The hypothesis that underlies the enquiry is that a certain kind of behaviour (manipulating policy to try to win

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elections) leads to poor economic outcomes (high inﬂation). But to establish that, one needs a correlation between the manipulation and the inﬂation. Clearly it is possible that ‘independent’ (meaning non-manipulating) behaviour occurs. And the statutes may affect behaviour in a variety of ways. The assumptions that are unsafe, however, are that the effect of the statutes is whatever is indicated by a straightforward reading of them with no cultural context of any kind, and hence that similar statutes will have the same effect in different countries. One cannot expect the historical presumptions, norms, and objectives to be identical in different countries just because they have similar statutes, and it is even less likely that this will result as a consequence of copying the statutes of one to another. Equally, it should be clear that to suppose these criticisms are in the nature of suggesting that statutory measures of independence are only an approximation to a true measure of ‘independence’ would be a mistake. It would certainly be a rash claim on the part of the composers of statute-reading measures of independence to claim that they are perfect, but the critique is much deeper. The difﬁculty is that the statute-reading measures miss the point that the hypothesis that is supposed to be tested is about behaviour, and so some test of the effects of different behaviour patterns is required. Having a statute that says the central bank controls policy simply is not an approximation to there being no norm of behaviour by which things are done otherwise. Similarly, a statute that says that policy is to aim at price stability is not roughly the same as there being no rational incentive to favour one party rather than another in government as a means to that objective. The statute-reading methodology therefore seems to dismiss the emphasis placed by the new institutional economics on norms of behaviour, public choice on the analysis of agency incentives, and even the general presumption of economic analysis that, if an agent has a preference for a certain outcome, he will tend to act so as to bring it about. Some may feel this is quite in order, as none of those styles of analysis has an ordained claim on applicability. Nevertheless, these dismissals would be damaging to the case for statutory independence because all these presumptions are deployed in making the case for it. What is it, after all, that motivates the assumption that elected governments behave in a way that is economically damaging if it is not the assumptions of the new institutionalists, the public choice theorists, and the ‘economic theory of democracy’? Similarly, in order to solve this problem, no one, to my knowledge, has suggested passing a law, or even a constitutional amendment, simply prohibiting the creation of political business cycles. Presumably the reason for this is that they feel that, with politicians still in charge of policy-making, such a law would be ignored. But then the view is evidently that one cannot determine what happens simply by looking at what the law says. Rather, one forms an

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understanding in part by considering the norms of behaviour and incentives under which the agents operate. Simply to apply the same consideration to the central bankers should be sufﬁcient to undermine the faith that has been placed in the statute-reading methodology. Even so, it might be said, the studies in question have revealed a pattern which links statutes with outcomes. If the objections are left on a theoretical level, it might be that in practice they amount to little, and it does not make sense to dismiss an evident pattern because of a priori doubts about the likelihood of ﬁnding it. But there are two further considerations. The ‘pattern’ in fact is substantially an illusion. There are several measures of statutory independence which show no relationship to inﬂation. These have been dismissed from consideration as poor measures of independence, but no convincing reason for relegating them has been advanced. So, choosing between two measures of independence, Alesina (1988: 41) says ‘[P]olitical independence appears more relevant’, meaning that it is the one related to inﬂation, ‘and is the criterion emphasised in this paper’, meaning that the other is dropped from consideration well before the conclusion is formally drawn that independence reduces inﬂation. This, and other equally striking examples considered in Forder (1999), conﬁrm that the testing of the hypothesis through the statute-reading methodology despite appearances (and no doubt hopes), lacks the scientiﬁc content for which it is valued. Even if we admit a pattern, there is still a deﬁciency in the argument. The claim that is made, and certainly the one which supports the design of institutions of European monetary union, is not just one of scientiﬁc explanation, but also one of the possibility of control. But it is possible, as has been noted by some of the advocates of independence, that the pattern could be explained by a tendency for countries where the policy-making establishment became highly averse to inﬂation to create independent central banks. This would certainly be the case in the 1990s, and to some extent may have been true of earlier periods. Another possibility which points in the same direction is that central banks have tended to lose their independence when there has been conﬂict between them and the government, or when conﬂict has been anticipated. Consequently, the central banks which remained independent when the statute-reading studies became fashionable included a disproportionate number from countries where there had never been such conﬂict, and which, unsurprisingly tended to be those whose economic performance had been successful, including with respect to inﬂation. The nationalization of the Bank of England in 1946 would be a case where conﬂict was anticipated; the removal of independence from the Bank of Canada, in 1967, one where it actually materialized. Finding a relationship between independence and inﬂation might therefore be a ﬁnding of some scientiﬁc value in pointing towards the historical and

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sociological explanation of inﬂation. But it would not offer a means to reduce inﬂation. Passing legislation to mimic that which has evolved in tandem with an attitude and policy towards inﬂation in the low-inﬂation countries is by no means sufﬁcient to achieve price stability. The correlation may be interesting, but it certainly does not create a programme for action. If the construction of the European Monetary Union depends on the soundness of the statute-reading methodology, then, a serious mistake would seem to have been made. By supposing, contrary to the usual tenets of analysis in economics and the approaches in politics most inﬂuenced by economics, that the incentives of central bankers can safely be ignored and, contrary to those in a more traditional political science, that one can ignore the historical and sociological context in which policy is made, the conclusion has been drawn that replicating statutes will replicate outcomes.

Aping the Bundesbank: Misleading Comparisons One suspects of course, that it is not really the statute-reading measures that have led to the enthusiasm for independence which is evident in much of Europe, but rather that other factors, and in particular the status and selfperception of the Bundesbank, have had a great inﬂuence. As a factor in the negotiations themselves, the attitude of the Bundesbank has often been regarded as a decisive inﬂuence over much of the programme. The implication seems to be that the Bundesbank's setting of the rules of the European game was the price to be paid if it was to refrain from exercising an effective veto over the whole project. Whether the existence of such a veto can really be established must be open to some doubt, but one need not dismiss the view that the Bundesbank had considerable structural power in order to emphasize the idea that it also had other important kinds of power over the negotiations. In particular its status as, by repute at least, the most successful of the major central banks, the widespread view that it deserved the credit for the low West German inﬂation, and the idea that this record of price stability was instrumental in West German economic success, all acted to give weight to its opinions, whether backed by institutional power or not. As it became fashionable to doubt the desirability of political control of monetary policy, its status as, again by repute, the most independent of central banks added further kudos and, one presumes, weight to its already weighty statements. Together with these things, it must not be forgotten that EMU was treated as a development of the European Monetary System, and to a degree, the Bundesbank was already playing the role of a supranational institution in that system. Although the arrangements were unsatisfactory in certain ways

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to some of the participants, the focus of discontent arose more from its national orientation than from its independence. Indeed, the idea that the Bundesbank was the leader, or the ‘anchor’ of the system because of low West German inﬂation was probably not clearly separated in many minds from the idea that it was leader because its independent status gave it ‘credibility’. Such considerations, although they may not make every participant in negotiations entirely happy with the idea of an independent European Central Bank might still go some way to blunting the opposition to it of some, whilst increasing the enthusiasm of others. Veto threats might, consequently, stay some way in the background. If the Bundesbank's inﬂuence ﬂowed from a number of sources, its objectives in the design of EMU reﬂected its selfperception as an independent and necessary guardian of the currency. And indeed, studies of policy-making in West Germany have frequently conﬁrmed what they call the ‘independence’ of the Bundesbank, and attributed low inﬂation to it. Such studies are also in many respects, at least potentially, the antidote to concerns about the adequacy of the statute-reading methodology, since they seek to uncover the objectives of the various agents at different points in time, and the constraints on them and thereby to establish the counterfactual of what policy would have been followed under different institutional conditions. Inﬂuential in this mode, for example, has been Goodman (1992), who speciﬁcally addresses the possibility that West German policy is better explained by the experience of inﬂation having deeply affected policy-making presumptions, so that the status of the Bundesbank would be a symptom of this, rather than a determinant of policy. The general tendency of studies of this kind, has been to identify moments when the Bundesbank has been in conﬂict with the government or parts of it, and deduce the power of each from the outcome. Occasions when the government evidently suffered as a result of its conﬂict with the central bank are taken as the most powerful demonstration of independence. So, in addition to Adenauer's public bruising after a dispute with the central bank in 1955, and Lahnstein's in 1979, Goodman emphasizes the resignation of Schiller in 1972, suggesting that the policy of the central bank may have been framed to bring this about. And Kennedy (1991: ch. 3) implies that the Bundesbank sought to bring down the Schmidt government. Similarly, although with less analysis, Marsh (1992: 170) attributes the fall of Erhard, Keisinger, and Schmidt all in part to the Bundesbank, and the claim is repeated on Marsh's authority by Marshall (1999: 73). In the nature of the thing, speciﬁc factors apply in each case, and one might read either a lot or little into them. So the hand of the Bundesbank was strengthened in 1979 when Lahnstein held a press conference speciﬁcally to criticize it, only to ﬁnd the press siding with the central bank; and again in

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1981 and 1982 when the FDP was an inﬂuential force in an ailing government happy to see the Bundesbank take a hard line on the weakening Deutsch mark. On the whole, however, the Bundesbank has been found to have signiﬁcant power to defy the government, and in most of the disputes this has resulted in a more anti-inﬂationary policy than the government has wanted. It is an interesting characteristic of these studies that they typically draw no very clear distinction between the ‘independence’ of the Bundesbank and what might be called its power. If the Bundesbank has indeed adjusted policy to change the composition of the government, then certainly it is powerful. If ‘independent’ is simply to mean ‘beyond the government's control’, then these examples do show it is that. But one wonders how much of a case that kind of behaviour really makes for central bank ‘independence’. It has been argued, after all, that independence is desirable because it prevents monetary policy being used to electoral ends. It is rather peculiar if it is determined that central banks are ‘independent’ whenever they use their power for just that purpose. And indeed, on the understanding that ‘independent’ means ‘powerful’, rather than ‘politically neutral’, a rather serious normative question might be thought to arise as to whether the suspension of democratic control of monetary policy might degrade it very much more than has been implied by the advocates of ‘independence’. The Bundesbank, of course, continued to enjoy public support and against that background it is harder to make a powerful case that there is a crucial infringement of democratic principles. Whether such support will be maintained for the European Central Bank in comparable circumstances must be open to some doubt. One could, therefore, imagine the issue of the democratic legitimacy of an independent European Central Bank coming to the fore much more forcefully than that of the Bundesbank ever has. Alternatively, if one takes the view that public support has been essential to the Bundesbank's ability to maintain its position, as some of those who study it do, then these studies conﬁrm the most substantial of the doubts about the statute-reading methodology, and in particular the improbability of legislated independence being fruitful in the long run. Leaving aside this issue, there are further doubts. One can make much of a government calling for lower interest rates and the central bank refusing, but even if it is a sign of independence, it is not necessarily a sign of policy being affected by independence. Such conﬂicts may reﬂect an underlying conﬂict of policy desires or they may themselves be a symptom of the political environment within which policy is made. For example, the government's interest in a policy which will speed growth at the expense of increasing inﬂation may be increased if the status of the central bank allows the government to avoid being held responsible for inﬂation by the public. Then, the independence of the central bank gives the government extra incentives to try to inﬂuence it.

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Even when this is not the case, there may be political credit available to the government in criticizing the central bank in the knowledge that a more inﬂationary policy will not be implemented. In either case, the appearance of conﬂict between the central bank and government is not a true indicator of a policy dispute since, if the government were held responsible for policy, it would follow the same one as the central bank. In such cases it would be an error to conclude that policy would be more inﬂationary if the central bank were not independent. It hardly needs to be said that to avoid such ambiguities is extremely difﬁcult in any study. We cannot always resolve such issues ﬁnally. But that is a poor reason for discounting them from consideration, particularly when a decisive example might be available. In the particular case in question, there is an interesting one, which is the case of the West German debate over revaluation in 1961. On that occasion, as recounted by Emminger (1977), the government opposed revaluation and the Bundesbank, required to follow the government's exchange-rate policy, relaxed monetary conditions. The government then objected that it created a danger of inﬂation and chose instead to permit a revaluation. Emminger presents this as an intellectual victory for the Bundesbank, but it also clearly shows that, despite their earnest desire to support the Bretton Woods system, the government also had a commitment to price stability. Indeed, looking at the long-term trends of West German experience, rather than the minutiae of particular decisions, it is easy to form the impression that the status of the Bundesbank has relatively little explanatory role in either low inﬂation or speedy economic growth. An independent central bank is after all only one of a number of characteristic institutional features which have at one time or another featured prominently in the explanation of West German economic success. The organization of the banking sector, and the interest banks take in industrial development is another; and the degree and effectiveness of worker participation, and the closely related willingness—on the whole—of organized labour to refrain from inﬂationary wage demands is a third. Even the construction of the social market economy itself, as is emphasized by Allen (1989), although it is increasingly derided by supply-side economists, was at one time based on the idea that welfare is complementary to economic development. The German historical experience is also potentially relevant in a number of ways. It is often said—again with the effect of undermining the focus on statutory characteristics—that the experience of hyperinﬂation has predisposed policy-makers to both a nervousness about inﬂation and a willingness to tolerate central bank independence. One might make more of the historical experience than that, however. In the ﬁrst place, the Reichsbank, which presided over the ﬁrst of the great inﬂations was ostensibly independent. The

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implication of that is clearly not that certain statutes make for price stability, but the historical lesson drawn might be that those statutes must be taken seriously—an attitude which there is no reason to suppose will transfer readily to other countries. And the explanation of that inﬂation in any case is often thought of as the consequence of some combination of reparations and extreme ﬁscal laxity, perhaps itself ultimately the result of reparations. It is much easier to see how these considerations would lead to an avoidance of ﬁscal and balance-of-payments deﬁcits than to any particular view about the central bank. Indeed, ﬁscal conservatism and current account surpluses are both characteristics of the post-war West German experience. Furthermore, the idea—possibly itself a reaction to the centralization and dirigisme of the Reich—that the state is responsible for creating the framework within which capitalist development may operate occupied much of the rhetoric of the social market economy, and in its macroeconomic aspect at least, also much of the substance. This is a natural foundation for a policy of price stability, but it was the position of the federal government long before the Bundesbank was credited with the major role in economic success. One aspect of this attitude was that even the idea of the government aiming at full employment, let alone trying to smooth business cycles to maintain high and stable employment, was slow to take root. Indeed, so tardy was the government in adopting the idea that policy might stabilize the business cycle that Shonﬁeld (1965: ch. 12) even felt that it was the Bundesbank, under President Blessing, which led the way in the development of these ideas in West Germany. The role of ﬁscal policy in achieving price stability should certainly not be underestimated. Particularly in the earlier post-war period the German government was deeply committed to ‘good housekeeping’, meaning the avoidance of ﬁscal deﬁcits, and indeed it was often in surplus. Unemployment was not a priority, but sharp rises were prevented by the possibility of increasing exports to replace domestic sales. This, it might be argued, along the lines of Mundell (1962), is in any case the effective way to maintain price stability in a ﬁxed-exchange-rate system. Indeed, in the period in question the contribution of the Bundesbank to maintaining price stability can be brought into considerable doubt. As Shonﬁeld implies and Holtfrerich (1999) has argued in some detail, West German policy in the Bretton Woods period is characterized by a monetary expansion which did not bring excessive inﬂation because domestic demand was held in check by ﬁscal policy, with no great damage to employment because of the ease with which exports were expanded in the context of improving competitiveness. Whether by luck or judgement, this combination was successful at least until the mid-1960s and this did nothing to diminish either the view that price stability was instrumental in achieving economic success or the status of the

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Bundesbank. Consequently, even when the policy framework came into question, as it did with the arrival of Schiller at the Economics Ministry, the German polity was both quicker to question and more sensitive to doubts about Keynesian prescriptions than in other countries. In particular, the danger of a policy of domestic demand stimulation in the absence of a secure way to control wages was quickly recognized, making once again for government policy more conducive to price stability than one would have expected in many other countries had they happened to have similar central bank statutes. In the period of ﬂoating exchange rates and the EMS, the Bundesbank took a more prominent role. And in this period more attention is paid by commentators to its independence. The long-standing historical presumptions remained important, and if there were more signs of conﬂict between the government and central bank, it was usually the latter which beneﬁted in public esteem from the successful record of the earlier post-war period. The idea that the Bundesbank's position might have been strengthened by the public perception that it was responsible for low inﬂation and that was responsible for economic success receives little attention in studies of independence. Even Goodman, ostensibly concerned with whether the historical legacy bequeathed special conditions to West Germany, presumes that as the memories of hyperinﬂation fade so does their effect on policy making, apparently without even entertaining the possibility that by that time the institutional realities of policy-making may have been transformed. If the single example of the Bundesbank is the explanation of the design of the European Central Bank—whether because of threat of veto or adoption by acclaim—that would seem to be no safer than to base it on the statute-reading methodology. It dismisses as causal factors the historical formation of policy attitudes, the idea of distinctive national policy styles, the self-perception of the actors, and the evolution of the institutions under the challenges of day-to-day policy-making, and replaces them with a simplistic model of policy-making in a simplistic model of the economy.

Conclusion Out of all the historical experience of West Germany, the EU has chosen to copy the only part that can be copied: the statutes of the central bank. From one point of view—the sound money view—one can still hope that the European Central Bank will be successful. Controlling interest rates offers it some scope for macro-economic management. And the ﬁscal rules of the Stability and Growth Pact might bind governments to an anti-inﬂationary policy. Even if ﬁnes are never implemented, the desire to avoid being shamed

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by their being waived may prove a powerful inducement to conservatism, at least while the current policy consensus lasts. And the European labour market, if it does not as easily adopt the co-operative attitudes that the West German has for most of the post-war period, can surely, ultimately, be subdued. But the European Central Bank would be foolish to believe it will receive much credit merely for the maintenance of price stability. It is also the fourth institution of the European Union and is entrusted with the success of that organization's greatest venture. Ironic it may be that the European Central Bank should be designed to be so independent of a narrow range of inﬂuences, and yet that it should be born into such a political environment, but nevertheless it is now much more than the guardian of the stability of the currency. The European Central Bank is the custodian of the European dream. That dream requires economic success, like that of West Germany, across a range of indicators. If the European labour market needs to be subdued by recession, the central bank will already have failed. If ﬁscal contraction in the absence of the large export markets that beneﬁted West Germany causes unemployment, the central bank will not receive credit for stable prices. Whether blame for unemployment can successfully and permanently be shifted—in deﬁance of the evidence of the social market economy—onto ‘supply-side rigidities’ remains to be seen, but little popular support is likely to be earned by a central bank that puts itself at the forefront of the betrayal of the Social Chapter. And so public support, when conﬂicts arise, must be in doubt, and with it—except on the most literal-minded statute-reading presumptions—must be even the central bank's practical ability to guarantee price stability. Further woes threaten if it becomes apparent that signiﬁcant distributive issues do exist. To the extent that it is perceived, correctly or otherwise, that inﬂation is controlled by increasing unemployment, the idea that monetary policy involves no substantial normative decisions (see Cohen, in Chapter 2 above) will become unthinkable, and how a serious case for independence will then be maintained is difﬁcult to see. Furthermore, a whole new distributive issue threatens to arise in the form of differential developments in various parts of the monetary union. How the central bank is going to react to inﬂation in one area and unemployment in others is yet to be seen, but however it reacts, it must expect local resentments to develop. In this regard also, the model of policy-making in a single state is a foolish way to conceive of policymaking for a continent of many states. There may be little resentment within West Germany, or indeed—although the case is already less clear—within united Germany, but to suppose that there will be none across the European continent places a remarkable faith in the power of money instantaneously to abolish more than just economic frontiers.

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If these things seem to point to the improbability of an entirely ﬁrm stance of policy, it should also be remembered that the pressures go both ways. The European Central Bank is also the self-conscious inheritor of the mantle of the Bundesbank and there are few within it who do not believe that the function of independence is to achieve price stability and that this and this alone is the route to prosperity. That is, after all, the lesson that has been drawn from the West German experience. It is also a commonplace of casual monetary discussion that the credibility of the policymaker is all-important. The Bundesbank earned its credibility over a long period, it is said, and the European Central Bank will need to do the same. Despite the evident contradiction of the statute-reading approach to independence, this view holds that only actions can achieve credibility, and for that reason, a display of determination to control inﬂation is warranted, and an obvious, constant vigilance against its return essential. We cannot say which tendency will have more force in guiding policy. Will it be the pressures to avoid economic distress and achieve a reasonable outcome of competing desires, or will it be the burden of succeeding the Bundesbank, and a certain perception of its success? Whichever, or even indeed if the optimists are right and the euro ushers in a new golden age of growth, bonding Europe into its Union, we can still be amazed that such simple models of economic policy could have been so naïvely applied.

References Alesina, A. (1988). ‘Macroeconomics and Politics’, NBER Macroeconomics Annual (Cambridge, Mass.: MIT Press), 13–52. Allen, Christopher (1989). ‘The Underdevelopment of Keynesianism in the Federal Republic of Germany’, in P. Hall (ed.), The Political Power of Economic Ideas (Princeton: Princeton University Press). Emerson, M., Gros, D., Italianer, A., Pisani-Ferry, J., and Reichenbach, H. (1992). One Market, One Money (Oxford: OUP). Emminger, O. (1977). The DM in the Conﬂict between Internal and External Equilibrium 1948–75 (Princeton Essays in International Finance, 122; Princeton: Princeton University Press). Forder, James (1998). ‘The Case for an Independent European Central Bank: A Reassessment of Evidence and Sources’, European Journal of Political Economy, 14: 53–71. —— (1999). ‘Central Bank Independence: Reassessing the Measures’, Journal of Economic Issues, 33: 23–40. Goodman, J. (1992). Monetary Sovereignty (Ithaca, NY: Cornell University Press). Holtfrerich, Carl-Ludwig (1999). ‘Monetary Policy under Fixed Exchange Rates’, in Deutsche Bundesbank (ed.), Fifty Years of the Deutsche Mark (Oxford: OUP).

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Kennedy, E. (1991). The Bundesbank (London: Royal Institute of International Affairs). Mangano, G. (1998). ‘Measuring Central Bank Independence: A Tale of Subjectivity and of its Consequences’, Oxford Economic Papers, 50: 468–92. Marsh, D. (1992). The Bundesbank (London: Heineman). Marshall, Matt (1999). The Bank (London: Random House). Mundell, R. (1962). ‘The Appropriate Use of Monetary and Fiscal Policy for Internal and External Stability’, IMF Staff Papers, 9: 70–9. Parkin, M., and Bade, R. (1980). ‘Central Bank Laws and Monetary Policy’, unpublished, University of Western Ontario. Posen, A. (1998). ‘Central Bank Independence and Disinﬂationary Credibility: A Missing Link?’, Oxford Economic Papers, 50: 335–60. Shonﬁeld, Andrew (1965). Modern Capitalism (Oxford: OUP). Weingast, B., and Moran, M. (1983). ‘Bureaucratic Discretion or Congressional Control? Regulatory Policymaking by the Federal Trade Commission’, Journal of Political Economy, 91: 765–800. Wright, V. (1997). ‘The Path to Hesitant Comparison’, in H. Daalder (ed.), Comparative European Politics: The Story of a Profession (London: Pinter).

III The EU and Social Science

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11 Interacting States Bruno Jobert European integration, like the internationalization of economies, places states and societies in complex interdependent relationships. These are not conﬁned to the realm of economic exchange. Political regulation is equally the product of an enormous reshaping which places state actions in the context of larger, polycentric groupings. Nation states are prone to various pressures, ranging from those in favour of decentralization to integration to the internationalization of norms. Simply to speak of the nation state to cultivate nostalgia, or to speak of its civilizing mission in the face of the market, is not of much use in trying to understand the real processes reconstituting political regulation. In order to do so, our starting-point must, rather, be the various forms of interdependence within which are situated both the cognitive frameworks of public action and the actual conduct of public policy. In the ﬁrst case, the central question is that of hegemony. If the international circulation of ideas is not a recent phenomenon, the production of norms and frameworks for public action has become one of the major vectors of interstate conﬂict: interstate competition encompasses competition over the deﬁnition of the model or models of public policy that are to be adopted. In this sphere, traditional rhetoric concerning the defence of a model of European society is weakened, as we shall see, by the joint hegemony of the USA and the international ﬁnancial institutions in the epistemic communities of the macro-economy. In the second case, the notion of the negotiating state emerges, in place of the traditional, now mythical, sovereign state. Lately, the European electorate returned a number of left-wing governments to power. Yet no one interpreted these victories as predicting any radical change in public policy systems, and there is no sign of a paradigmatic revolution, to borrow Peter Hall's expression (1993). No member of these governments mentions a return to a broad interventionist policy, with the purpose of reducing social inequality. More radical left-wingers merely detect a novel version of the omnipresent neo-liberalism they denounce. And the

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question arises as to why part of the electorate plumped for these recent converts to the virtues of the market in preference to those for whom such virtues had long provided the basic stock-in-trade. The reappearance of politicians for whom pragmatism is a profession of faith is more or less indicative of the current state of political debate, where the question of intervention on the part of government is no longer a dogmatic one and where decisions are taken on the merits of the case and as the situation demands. The purpose of this chapter is to trace the passage from earlier assumptions made about the withdrawal of the state to the complex processes for reordering the public domain that characterize contemporary Europe. To this end, I shall argue for a structural approach to public regulation. I reject the argument of systematic erosion of the state function and, in its place, put forward that of the emergence of a state that is not so much sovereign as open to negotiation, working within an international system where credible economic norms are produced within a polycentric continental entity.

The Three Poles of Political Regulation My starting-point is a structural approach to politics (Commaille and Jobert 1998). We posit as a principle that each political system constitutes a distinct entity, each of whose components has a differential sensibility to contextual change. Viewed thus, the classic distinction between state and civil society does not appear to be challenged by the numerous studies that demonstrate both the degree of penetration of the machinery of state by social forces and the extent to which states may channel and structure social actors. The experience of totalitarian regimes on the contrary reveals that there are invariably limits to this ability and that the dynamics of civil society are not reducible to those of the state. But the state itself needs to be analysed as a differentiated institution: it is helpful to make a distinction between the state as it coalesces with society and contributes to the process of regulation involving other protagonists and the sphere of competition for the conquest and preservation of political power. The coalescing state and political competition exercise their activity upon a society which is not merely the positive receptacle of their actions sunce as they directly contribute to their legitimation. Thus Figure 11.1 deﬁnes the scope of the three structural components of politics. There is now an abundance of studies dealing with the politics of coalescence in terms of regimes of regulation or governance. They reveal the diversity of welfare-state systems (Esping Andersen 1997), the nation and sector based variety of production regimes (Soskice 1998), and institutions governing professional relations (Regini 1997). They have further brought to light

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Figure 11.1. Structural Components of Politics

contradictory images of the state and of politics in this area, whether they represent institutional concentrations, ordinary partners in the social mechanism, or actors provided with speciﬁc resources which enable them to bend the rules applying to transactions and regulate access to the spheres of governance. The wealth of research that has accumulated on regimes of governance means serious consideration must be given to the marked institutional differentiation of public action and so puts a more uncertain light on the problem of its relations to the sphere of political competition. What I here term political competition cannot be epitomized in the workings of a quasi-political market. The questions of the construction of the political collectivity itself, of its frontiers and legitimate participants, are problems that have acquired greater visibility with the new emphasis on the locality and the region and with Europeanization. In a word, the political order is never given—it is an uncertain process of construction which at some moments weighs heavily on the direction of public action. Neither of the two components of regulation referred to here can function without the principle of legitimation. Following Jane Jenson (Jenson and Phillips 1996), I deﬁne regimes of citizenship as a particular conﬁguration of these modes of legitimation at a given moment. This deﬁnes a relationship of inclusion and exclusion from the public arena. In the sphere of political competition, the relationship is frequently founded on identiﬁcation between nationality and citizenship; in the area of regimes of governance, wage-earners for long constituted the point of reference. These individual identiﬁcations constitute the bases upon which conﬁgurations of legitimate collective actors are built (parties and social partners). Thus regimes of citizenship deﬁne a body of rights and trace the limits of intervention by politics in society. They constitute hierarchical bodies of status. Alongside the normal citizen, groups with diminished status make their appearance, both in the ﬁeld of civil rights (foreigners, colonial subjects, women in certain countries) and in that of social rights. This relationship of inclusion and exclusion, and the rights it gives rise to, is in each case founded upon particular representations of political order and

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social justice. This is what accounts for the fact that the regime of citizenship is something other than the inscription in civil society of forms of domination that characterize political regulation. Balibar's distinction (1995) between citizenship as status and citizenship productive of status appears illuminating here.

Destabilizing Tendencies The recent instances of economic change effecting change in regimes of governance mean that it is possible to overlook the dynamic proper to other components of political action. In fact, the reshaping of the public domain becomes comprehensible only by taking them into consideration. With regard to regimes of regulation, a number of observers have shown how these have responded differently to similar pressures. Such differences have to do as much with styles of action—confrontation, decentralization, or dialogue and centralized social compacts—as with rules emerging from them, in particular concerning the regulation of the wage relationship. Nevertheless one may ask whether certain tendencies do not transcend these institutional differences. Certain essential markers of public policies seem to become blurred. Thus it is with the ﬁgure of the stable wage-earner who constituted the implicit or explicit referent of a political initiative aiming to make social statuses and conditions homogeneous. Today one observes a marked tendency on the part of employers towards differentiation, which is more or less contained by wage-earning organizations. Further to this, there is the cleavage between wage-earners and people who are excluded on a long-term basis from the labour market. The diversiﬁcation of statuses thus tends to reverse earlier tendencies towards greater homogeneity. Furthermore, the reduction of inequalities in condition would no longer appear to be the central motive for public action. This was markedly the case in the decades following the war, legitimizing a policy of expanding public services and redistributive ﬁscal policies with the aim of extending the place of wage-earners and low-income groups in the ﬁnal shareout. The new imperative of competitiveness makes the abandonment of this objective appear likely. Renewed attention to proﬁt margins has turned into the pivot of a system where wage moderation and public austerity are extolled as cardinal virtues. These new currents at work in regimes of regulation have an ambiguous relationship with the ongoing process of transformation in political culture. With the close of the 1960s, evidence grew of a profound change of attitude towards the traditional claims made by the bureaucracy and the major professions to pose as the moral mentors of society, the only ones entitled to

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speak for society in deﬁning the common good. New social movements also emerged. In cities, those responsible for reconstruction and urban expansion were increasingly called to account by those for whom they catered. Large-scale investment projects (for example, airports, motorways, nuclear power stations) which had been prescribed, virtually unchallenged, in the name of growth and progress were then effectively held up or axed by the volume of protest. The ‘Nimby’ phenomenon (Jobert 1998) localized environmental defence groups and began to assume permanence for developers who faced constant upfront challenge and hostility in the courts. Out-and-out production was further challenged by some union federations, such as the CFDT in France which brought out a sensational report on the ‘damage caused by progress’ in the 1970s. However, protest is generally engineered by groups on the fringe of the productive apparatus and is mobilized with particular aims (Richardson 1995)—one thinks of the signiﬁcant pressure exercised by groups associated with a particular disease. Such cultural changes have complex relations with neo-liberal doctrines. The legitimacy of state intervention, as of interested professions and organizations, can no longer be taken for granted, and this can provoke an attack on bureaucracy and corporatism in favour of market reform. But the same strain may also induce signiﬁcant demand for public intervention in areas where the state hitherto remained inactive. And the urge to call the nanny state into question may well coincide with a similar urge in favour of interventionism, albeit with a different style. This at any rate is revealed in opinion surveys which show that, in every European country, a large majority of those whose opinion is sought favour strong state intervention as a guarantee of their social security and rights. Certainly, such attachment to social welfare in Europe is virtually an article of faith in political rhetoric, but in practice the resistance it calls forth is highly disparate and depends on the groups and the practical issues at stake in any proposed reform. Similarly, one should dispense with the outdated view of European construction purely as a side effect of economic internationalization. Its initial purpose was to conciliate the continental political order, in fact to exorcize the experience of two world wars. Throughout the 1980s, much of the arbitration determined by the French President can best be explained by the will to construct a new political entity based on the axis formed by two former enemies. The more complex and involved the accumulation of agreements in the European Union, the more costly the withdrawal of support becomes. The furtherance of the Union and the prestige implied by taking on an active and respected role in pursuing this end probably accounts for the vigour with which a number of European governments have adjusted their economies to the criteria agreed at Maastricht.

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The Political Debate: Between Credibility and Legitimacy Conﬂicting trends in the structural components of politics are revealed in the widening gap between guidelines set out by experts who advise those with political responsibility (Lordon 1997) and the expectations nourished by citizenship regimes. And choice between the alternatives of economic credibility and political legitimacy has become no easier since such credibility is governed by an institutional set-up which to a large extent is beyond the control of Europe. The tide of pressure to promote a return to ‘liberalism’ stems from the paradigmatic revolution which has occurred in institutionalized forums of science and which has been taken up by those whose economic opinion counts at the international level, including the experts who advise on public policy decisions. The critical turning-point for European economists occurred well before the shifts of the last twenty years or so (Jobert 1994). Early in the 1970s the very people who had investigated market failures set about investigating government failures. Armed with the approved tools of rational choice, they demonstrated that state intervention frequently does more harm than the evil it is designed to remedy, generating expense, distortions, and rigidities. In this operation aimed at intellectual conversion, the USA played a dominant role, particularly felt at the level of academic theory in the social sciences where its monopoly went largely unchallenged. The same was true with policy brokers, working at the point at which ideas are transmuted into practical counsel. The growth of think tanks and the training of specialists and top executives were both essential in carrying the operation through. It is worth noting that the crusade against the ‘road to serfdom’ by independent institutions had its beginnings more or less at the time when Keynesian policies were most in favour, though the development of neo-conservative think-tanks which were designed to preach the market gospel to the various political élites took place in the 1970s (Théret 1998). The body of international ﬁnancial institutions constitutes one of the more signiﬁcant agents of the new global outlook, both because of the authority attached to their diagnoses for decision-makers and because decision makers themselves were amenable to the same cast of thought. The same academic and professional sources fed the ‘epistemic community’ of economic analysts (Santiso 1997) who guided the choices made by international investors, either because they worked for them or via risk-rating agencies whose inﬂuence on their behaviour was marked. The various establishments that help to create world economic opinion form a fairly coherent system, with the same intellectual currents predominating in scientiﬁc forums, in the formation of élites, in the advice given to

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politicians and investment managers, and in the area of market regulation. One might mention the 1997 award of the Nobel prize in economics to two ﬁnancial market specialists, advisers incidentally to large investment funds, as an instance of the interpenetration of the different forums which establish the principles of economic credibility. Within the global system that sets the norms of economic policy the preponderant inﬂuence of the USA seems to be barely questioned. European élites have shown themselves more concerned to take up positions of power within this institutional arrangement than to work for the construction of an alternative system. In the context of science, publication in American journals and reviews is considered prestigious, as is the pilgrimage to one of the centres of academic excellence in America. Similarly, ﬁnancial élites have been inclined to consider such an arrangement as affording a beneﬁcial extension to their domestic careers and have themselves sought to excel in purveying the prevailing doctrines. Of course, European states have maintained their own powerful system of higher education institutions. But they lose out in the battle for preponderance on account of their subjection to the dominant currents in social sciences in America and to the fact that institutions feed their principles to the decision-makers. One of the particularities of this new frame of economic policies is its claim to universality. Hence it is possible to envisage a formula for policies that can be applied in any country, once its degree of development and institutional stability are taken into account. Such a situation implies a systematic depreciation of the corpus of studies and ideas which aims to develop national or regional public policy models. There would then be no European models for state regulation and any particularities would be at best obsolete elements in the past heritage of these nation states that were destined to disappear. Being aware of the dominance exercised by the USA over this apparatus for producing norms, it is difﬁcult to rid oneself of the suspicion that such universalism owes many of its features to the American model. It is hardly surprising if the conversion of European élites to these new models creates misunderstandings and signiﬁcant tensions between them and the public in general who seek to continue to beneﬁt from the comprehensive welfare services provided by the state. In fact, analysis of public opinion data reveals the limits of the neo-liberal conversion of the different European societies. Data from the ISST or the Eurobarometer lead one invariably to the same conclusion: a marked consensus prevails everywhere for government having a prominent role in providing protection against social risks, promoting public services in education and in health, and in spearheading economic development. Certainly, there is also a signiﬁcant minority, in business and among the self-employed, which argues the contrary case for state withdrawal. But everywhere it remains a minority (Ferrera 1993).

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What is particularly striking here is the lack of a clear correlation between the prevalence of conservative governments and the degree of mistrust in public opinion over the question of state intervention. Public opinion in Britain in this respect shows little variance with public opinion in other European countries. More than a dozen years of neo-liberal indoctrination have failed to induce the British to deny the legitimacy of state intervention in order to promote and safeguard social security. But the demand for security need only be denied by circumstances for the legitimacy of public intervention to ﬁnd itself under threat. For example, the nationalization of major industrial groups was a popular measure in France in 1981, because state enterprises had a reassuring image as models of social management. Their subsequent privatization after 1986 caused no heart-searching for the simple reason that their policy of ﬁnancial stringency and the maintenance of competitiveness had earlier produced a fairly ruthless wave of redundancies, in conditions that were reminiscent of the private sector. Nevertheless, adoption of an interventionist policy in no sense implies adherence to action models that would give a free hand to professionals and bureaucrats entrusted with the services. A more acute perception of the damage dealt by progress shows a concomitant rise in groups representing consumer interests which impugn the monopoly of producers and professionals whose work lies in the public domain. The change in attitude towards producers of services opens the way towards profound changes in the organization and supply of services based on the principle of separation between the operational organs and the regulatory institutions of public services. Thus, the restructuring of states results from interaction between reform projects which aim to consolidate economic credibility and forms of social mobilization which, in their different ways, have made clear to those in government the limits to what can be achieved or accepted without posing a threat to their own legitimacy. The privatization of state-owned industries working for the global market is in general progressing at a faster rate than that of public services. Network services are in a half-way position, tending towards privatization in the case of telecommunications, whereas, apart from Britain, the privatization of energy and of the railways has been postponed. Public social services, such as health, remain in the public domain, but have been subject to profound changes linked to separation between producers and regulatory institutions. The effort involved in redeﬁning the frontiers of the public domain has produced a change in political rhetoric which may be interpreted at once as a manner of hybridizing neo-liberal doctrines via elements of national culture and as a means of advancing the requirements—real or supposed—of European construction (Jobert and Théret 1994). Thus at the close of the century

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the political debate in France takes its symbols and its vocabulary from the Républicains radicaux who themselves were active at its dawning. The farewell to the egalitarian social programme which had been advanced during the post-war period has been succeeded by another less egalitarian concept embodied in the idea of republican solidarity. The Republic must honour the social debt it incurs towards each of its citizens, in the face of social risks and danger that no single individual can avert. But this solidarity is conjugated in the plural: national solidarity can only acceptably come into play, according to the new discourse, when the various forms of professional solidarity, managed by the machinery of social insurance, have been shown to have failed. The emergence, alongside systems of insurance, of a new policy sector dealing with the marginalized ﬁnds itself thus legitimated by the activation of earlier symbolic repertoires which had been put on hold during the time when a universalist social security system was under construction. The ritual invocation of the Republic, of solidarity, and of the virtues of citizenship, has now come to replace the confrontation of global ‘social projects’ in the forum of political communication in France. It is suggestive of an unsettled period when there is mourning for a degree of state interventionism whose claim it was to ‘change the conditions of living’ and when the evidence is also there for all to see of the cases of deadlock and the damage resulting from general application of neo-liberal recipes. Doubtless it is this uncertainty, consecrated as a virtue, the height of prudence and pragmatism, that explains the success of those who have been recently voted into ofﬁce and who hail from European social democracy. European construction has shown itself to be both a pretext and a means of transmission for new norms in the difﬁcult business of redeﬁning the public domain. For those at the head of major state concerns and public services, the liberal arguments advanced by Leon Brittan were seen to provide a good occasion to do away with the productivist pact binding these élites to their employees and make the European institutions bear responsibility for the change. In more general terms, governments and higher civil services seem to have grasped the occasion offered by European construction to distance themselves from interest groups which till then had been closely associated with the administration of public policies. Even though interest groups are sometimes associated with the management of social pacts, these appear less like the result of internal political exchange than as a way of co-managing an adjustment decided by politics and whose premisses are not open to discussion. Even so, European actors are not content with the role of scapegoat. They have tried to strengthen their own legitimacy. First, they were inﬂuential in putting onto the agenda themes and ideas emanating from actors who were marginalized at the level of government. In this way both consumer interests and environmental

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issues received special attention. National governments have indeed engaged in permanent negotiation with producers who are themselves raised to the rank of quasi-exclusive social partners and so have more of a problem in withholding attention from these new forms of mobilization. The same holds for women in the workplace: Mazey and Richardson (1998) have shown that the Commission has played a large part in setting up a women's pressure group at European level on which it relies in publishing its directives. Secondly, the European Union has favoured the emergence of shared expertise and appraisal and diagnosis in crucial areas of public policy. European studies of poverty have had a signiﬁcant impact on policy-making in that area. More recently, continental and British doctrines of public service have enabled viewpoints that were traditionally antagonistic to draw closer to one another, hence the recognition of services of general interest in the Treaty of Amsterdam (Bauby 1998). Such production of a common normative framework often generates ambiguities, misunderstandings, and incomprehension, in the initial phase at least. This was the case with the initiative on the part of the French—and of Jacques Delors's team—in introducing the notion of exclusion into the European debate. But it is also conducive to focussing attention upon the action taken by states in a comparable context, even in areas which fall outside the scope and competence of the Union, so awarding good or bad marks in connection with a number of policies. Consequently it has an inﬂuence in modifying the terms of the national debates, hence the effect of public action. The involvement of European actors does not constitute a direct challenge to the world-wide predominance of a body of specialist institutions which prepare criteria for the economic credibility of governments. But the slow business of reciprocal recognition which has started in all spheres of public life may in time serve to sketch out a speciﬁc European model which would be more than just a variant of the universal model advocated by international ﬁnancial institutions. Its main features, which are now clearly visible, are appreciably different from that model. It shows not a withdrawal of the state but a redeﬁning of the public domain. The nation state is not eroded, rather it manifests itself less as sovereign subject than as actor engaged in permanent and unceasing negotiation with other states. As a consequence, the state as negotiator is more vulnerable to the juridical treatment of political relations.

The Reconstruction of the Public Domain In all European countries schemes to obtain a generalized withdrawal of the state are now obsolete. Even the World Bank (1997) maintains as much: the

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state has not ceased to grow in the course of recent decades, whether or not the government in question favoured a neo-liberal policy. Therefore, the thesis of a shift from the state as producer to the state as regulator is not veriﬁed. This was founded on the notion that where a degree of tension existed over public expenditure, the state could attain its objectives no longer by organizing the production of services and redistribution but by regulating transactions between the different interests concerned in this or that ﬁeld. The future of the modern state would thus be that of a state relieved of its productive tasks and centred on its primary skills—arbitrating, regulating, assessing, and approving. In reality, the regulatory surge tends most often to be an adjunct to the existing activities of production and redistribution. As Majone (1996) shows, the European Commission, whose redistributive capacity, being already taken up by the Common Agricultural Policy, was poor, has made use of regulation as an instrument with which to assert itself as a political authority (Héritier et al. 1996). But this burgeoning activity has not taken the place of government activities in producing services and in redistribution. The regulation of health and safety at work has never suggested itself as an alternative to national institutions which guarantee access to health care. In effect, although government has disposed of a chain of enterprises which worked directly for an expanding international market, its role as a producer of services has gone on expanding under the twin pressure of (a) the middle classes and those with a stable income who have pushed hard for key services such as education and health to remain in the public sphere (certainly in these areas privatization has tended to limit itself to seeking out proﬁtable niches), and (b) the increase in poverty and in exclusion, which has been a disruptive element in social cohesion and brought about the need for and development of a sector to administer those elements in the population who are more vulnerable or at risk, where income allowance can be combined with different forms of integration or help with getting back to work. Hence the various components of what used to be known as the welfare state have broken up into different sectors governed by different norms. Pensions are the most affected by privatization. Health and education are privileged ﬁelds where a new form of public management is being developed with the aim of combining the demands of competitiveness and the expectations of inﬂuential social groups. A safety net is under construction for the more vulnerable. Such divergent development highlights one of the pitfalls of standard analyses of the welfare-state system which take as their assumption that different sectors of social policy are uniﬁed and homogeneous and make this the basis for discussions on path dependency and the persistent nature of different welfare systems (Merrien 1997; Esping Andersen 1997). We make the opposite assumption of a break-up of the different social branches of the welfare state and of paths that henceforth follow their separate logic.

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Nor should the development of a regulatory system be presented as a powerful instrument in running down the central organs of government. For instance, the introduction of quasi-market mechanisms into the NHS led rather to an increase in the administrative faculties of the central government (Glennester and Legrand 1995). Similarly, the multiplication of agencies in health care in France has tended to reinforce the administrative resources of a government that was traditionally weak in the face of medical organizations. Nor is it by any means certain that this burgeoning of independent regulatory agencies necessarily implies a form of governmental dispossession. Naturally, neo-liberal rhetoric presents such agencies as a means of steering clear of unwelcome political interference. But this is to view only one side, since these agencies are invariably set up by government, which nominates the directors and to which these are accountable. The independence of regulatory agencies has the appearance not so much of a deliberate withdrawal on the part of government as a strategy enabling it to distance itself from organizations representing inﬂuential interests and to deﬂect criticism which policy changes may entail onto those in charge of these agencies. In particular, it represents a desire to escape the interpenetration that traditionally obtains between producers, specialized professions, and public decision-making. The retreat of the state has not occurred, no more than has its replacement by a regulatory state. But the frontiers of the public domain and the action models have shifted profoundly. The initial impression to be drawn from the picture is of a segmentation of the state into a heterogeneous body of institutions and sectors.

The Segmenting of Networks into Polycentric Bodies The traditional organigram based on hierarchy is now blurred, and there is a multiplication of independent administrative institutions, regulatory agencies, and new types of institution involved with production or assessment. This blurred, disconnected impression is reinforced by the unequal redeployment of public policy networks between the different centres of power. In some ﬁelds, in particular ones for which the ﬁnance or agriculture ministries are responsible, intergovernmental negotiation and dialogue with Community authorities constitute an important element in the tasks of senior administrators and of their political opposites. Such frequent and repetitive interacting between élites leads gradually to their forging a common language and indeed a common approach to problems, to the forging too of forms of cross-national Community public policies linking together national and European experts. The settlements they achieve constitute package deals which, except during periods of crisis, leave

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little room for belated attempts by national governments to inﬂuence the issue. The redeployment of social policies operates between other levels. Social-welfare policies remain the prerogative of the national level, led from the centre in Britain as in France. There are policies for regionalizing health care. There is no proposition for a welfare state at European level on the agenda and intergovernmental negotiations occur only at the periphery of these bodies and take up a very restricted part of the business of those at the head of national welfare programmes. Whatever headway Europeanization makes here is more in the shared expertise of specialists appointed by the OECD or EU, but it makes little sense at this level to talk of a network of public policies any more than of advocacy coalitions; rather one might speak of this level as being that of the epistemic community. For the moment, the social administration of the regular workforce remains the preserve of national authorities. During a time when wage differentiation is becoming more marked and when collective negotiations are tending to become decentralized, the purpose of inter-professional organizations seems less apparent. Concertation on social policies appears to provide the state with an opportunity to consolidate its traditional partnerships. Conversely, management of the ultimate safety net represented by welfare action and minimum wage policies has given much greater involvement to local authorities and to other types of association. Here, on the ground, networks are gradually being set up associating devolved administrations, local elected representatives, and associations with the object of ﬁghting exclusion. This social aid network only marginally overlaps with that of social welfare. While it is more localized in its ordinary operations, in terms of the exchange of expertise it is perhaps more ‘Europeanized’; and in fact with its experimental programmes and its social observatories the European Union has been active in building up this specialism. But little has been done other than to compare different approaches and experience. So the familiar compartmentalization of public policies is further conﬁrmed by their being rooted in distinct political domains. In a time of uncertainty when no policy frame is in place to allow a degree of co-ordination to be achieved between these different sectors, the distinctive nature of these domains probably makes it easier for policies having more or less compatible norms to coexist. The consequences of this unequal distribution of public policies between different levels of government go beyond the simple reproduction of the bureaucratic divisions within a state. For Wolfgang Streeck (1996), for example, the process of European construction is biased by the fact that economic and monetary integration have proceeded far more quickly than political or social integration. In these conditions, economic competition over the single

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market will lead to social and ﬁscal dumping which will greatly constrain the margin of manœuvre available to nation states. These will tend to blame the effects of globalization, posing as guardians of social cohesion, and hence slowing down the process of European political construction. Such construction will then be directed in an intergovernmental and nationalist direction. This thesis illustrates an important shift in perceptions of the EU. Monetary union appears as the end of any notion of a Europe directed towards the construction of a distinct social model. Europe will only be a stage and a framework for deregulating markets. This allows us to make certain predictions about the future of the EU. Certainly, it does appear to be in keeping with a climate wherein the low turnout in European Parliament elections can be seen as reﬂecting a growth of general concern about sovereignty. This hypothesis will only be borne out in the long term if national governments succeed in getting their citizens to accept the erosion of the welfare state as the inevitable result of external constraints transmitted by a Brussels bureaucracy and over which they will not really have been consulted. Experience suggests a different scenario: the southern states, where social institutions were less developed at the time of their accession to the EU, have, conversely, developed and consolidated their systems since joining (CEE 1996). Moreover the norms propagated by the Union in sensitive areas such as health at work show no sign of being marked by a lowest common denominator approach (Eichener 1992). Similarly, the pressures on mature welfare states owe more to the internal dynamics of society (ageing populations and changing technologies) than to economic globalization (Pierson 1998). In order to understand such tendencies, another hypothesis can be suggested. European construction permits a systematic comparison between social institutions and situations in the various member states. This has the effect of raising the expectations of the citizens of the member states, in that they all aspire to enjoy the level of service available in the states with the highest standards. ‘The European experience is evolving’, writes Victor Perez Diaz (1998), ‘in the sense of an extraordinary intensiﬁcation of exchanges, of cross references and co-ordinating actions. The Europeans as travellers, businessmen, or workers, are more and more prone to read, observe, and imitate (or refuse to imitate) other Europeans, to inﬂuence them or to trade with them.’ European integration has adjusted expectations upwards, leading to social mobilization in favour of limiting the retreat of the state in well-developed welfare-state systems. Beyond this quantitative approach, couched in terms of more or less state, it seems that the EU has been able to reinforce its own legitimacy by seizing on problems that have been inadequately dealt with at the national level. This it has done by putting into place an information system which has served to render certain social problems more visible (Barbier 1998), by giving support

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to the social partners in order that they can consolidate their organizations at the European level (Turner 1993), by promoting the ofﬁcial recognition of new actors at the margins of national social dialogues (Mazey and Richardson 1998), or by experimenting with new models or attempting to diffuse practices most pertinent to new problems. Élites most favourable towards neo-liberalism have beneﬁted from a strategic advantage with the disjuncture between the venue for ﬁnancial and monetary negotiations and that for social negotiations. This advantage, however, does not provide them with a carte blanche to undertake liberal reforms. The deeply rooted nature of social rights, forming, as they do, an integral part of European citizenship, remains an elements with which neo-liberal reformers have to deal if they want to assure their political survival.

The State as Negotiator: Against the Thesis of Erosion If public policy networks seem in their ordinary running to have marked independence in relation to political authorities, these appear strengthened by the continuous process of negotiation between levels of government and between corresponding governmental authorities which typify new methods of action. The multiplication of forms of contract would appear to be a constant feature and is well analysed by Gaudin and Novarina (1997). Likewise, European construction is to a considerable extent effected via the same continuous negotiation. In both cases negotiations involving a number of actors result in compromises where the balance of concessions and beneﬁts forms a package (Liebfried and Person 1998). One of our interlocutors, a close adviser to a French Minister of Finance, made the point that it was difﬁcult to intervene after the event in negotiations pursued in Brussels, since the slightest shift was likely to cause the entire construction to collapse like a house of cards. Such a state of affairs could well prove the argument of the state's withdrawal correct. Governments would have no other role than to occupy a symbolic arena while problems were thrashed out and policies elaborated in compartmentalized networks free of political intrusion. Such an assumption, however, holds only for policy-making under normal conditions, that is to say, when the rulings that structure interactions within these networks may be considered to be stable. Policy management on a daily basis may make governmental actors appear to be mere supernumeraries. It is quite otherwise where new rulings are being set up or becoming institutionalized. They do not emerge gratis; it is not enough for an idea or a fresh diagnosis to materialize in a think-tank. There is no shortage of instances where long gaps occur between the act of diagnosing a dysfunction and its translation in terms of new public policy norms. Criticisms of the Common

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Agricultural Policy on the part of specialists were voiced decades before its reform took place (Fouilleux 1997), just as the warnings issued by economists and sociologists about medical inﬂation had for a long time precious little effect an health policies. The devising and institutionalization of new rules ordinarily combine three processes: a key actor defecting from the existing compromise, the emergence of new sector-based actors, and the intrusion of cross-sectoral actors for the purpose of correcting failures of adjustment between the overall and the sector-based elements. The ﬁrst two processes suggest an open crisis in the area under consideration, brought about by protagonists working within the institutionalized networks. This was the case in Sweden, when leading exporters withdrew unilaterally from consultation bodies on social welfare (Thelen 1993). But instances of crisis-perpetration within a particular ﬁeld by the central actors of governmental action would seem to be more frequent. Indeed, one of the easier means of building positive compromises within a sector consists in allowing the cost of the transaction to be borne by outside actors, for example, the taxpayer. This is frequently the case where health and agricultural policies are concerned. In this type of situation, the élites at the head and the organizations concluding these advantageous compromises have an obvious interest in seeing them proceed even though their impact on society as a whole may well be problematic. There would be no internal perception of crisis and it would be a case rather of more ‘global’ actors creating a crisis round past arrangements. If these all-encompassing actors bring about a more or less open confrontation with organizations that are on occasion inﬂuential, the reason is probably because further protraction of past tendencies would in all likelihood carry a threat to their own bases. The neo-liberal turning in Britain and the parallel shift towards budgetary rigour in France in 1983 took place against a macro-economic crisis and impasse (Jobert 1994). More recently, the European engagements undertaken by governments have led to a constraint motivating a return of politics onto the policy scene and its uneasy relationship with the social partners. Thus, Eve Fouilleux (1997) has shown how the inclusion of agriculture in the international commercial negotiations within GATT during the Uruguay Round produced an entirely new structuring of the decision-making network both at the level of the Community and at that of France. The old network of corporatist co-management became duplicated by a more powerful network in which central political actors and ﬁnancial actors held a preponderant place. Similarly, the various governments have brought considerable pressure to bear on organized interests to carry out the adjustments required by the Maastricht Treaty. The ways and means of such pressure vary from country

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to country, and from individual to individual. Some, including Alain Juppé, chose a direct approach, in going for a reform of the social security system without prior consultation with the organizations favourable to it. Others, the governments in Italy, Spain, and Portugal, for instance, endeavoured to conclude comprehensive social compacts so as to reconstruct their system of professional relations and their economic institutions in line with the new European deal (Pochet 1998). In any event, these changes reveal different applications of the hard core of government action, which in some countries, including Germany, may include party leadership as such, whereas in France party leaders more often than not remain privileged spectators. Again in France the expertise in such changes may remain a monopoly of the higher administration, whereas in Italy or Britain they tend to involve a more diversiﬁed network of academics, consultancies, and think-tanks (Jobert 1994). And they reveal the internal executive chain of command; for instance, all French studies point to the decisive part played by presidential arbitration (outside periods of cohabitation) whenever controversy within a governing coalition becomes irreconcilable. Hence the proposition of the eroding state does not stand up to the analysis of policy initiatives which are invariably marked by hard-core mobilization of the political coalitions in power. Furthermore, the analysis induces a more top–down view of polycentrism; manifestly, the different tiers of government are not equally able to initiate matters; legitimacy in promoting new institutions and new regulations is still very largely restricted to states. What makes the situation radically new is that this capability for initiative is no longer exercised in sovereign solitude but across permanent and unalterable negotiation with other political authorities. It is this image of the state as negotiator, functioning within a polycentric system, which seems to us best to synthesize the position of European states. What is working a profound change in Europe is that irrevocably, as the construction of Europe proceeds, the cost of defection, the cost of the unrecognized strategies of the stowaway, mount up. There are two consequences here: ﬁrst, the to-and-fro nature of exchange that feeds negotiation is becoming less prevalent within just one sector, but is tending rather to be deployed across the whole area under negotiation and hence to reinforce the power of the central core of the political executive; secondly, the quasi-impossibility of defection makes the practice of failure to respect past agreements a dangerous one, which is likely to lead to reprisals being applied in other areas by the members as a whole. Probably it is for this reason that negotiating states are more ready to allow authorized rules to be reinforced, thus providing more stability to their interaction (as well as to that of the organs charged with seeing that they are respected). Thus there exists an elective afﬁnity between the juridical treatment of public action and political polycentrism, the more so in

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that this polycentrism is developing in societies marked by the collapse of the supervising, tutelary state and by the growth of forms of legal challenge to government action. The restructuring of states in Europe reveals not a retreat of the public domain but its comprehensive reconstruction. Privatization no longer constitutes a universal panacea. Recognition of the role of general services, both in building long-term competitiveness and in maintaining social cohesion, accounts for a continued and growing application of redistributive policies and the public production of services. The shifts in the frontiers of the public domain are an indication of the path followed by European states in their efforts to establish a viable operation involving economic credibility, legitimate social action, and the maintenance of public order. There is no possible comparison between the harshness, not to say brutality, of the shock therapies applied in emerging economies such as Mexico or in Eastern Europe and management of economic adjustment in European states, which is mindful of the requirements of a democracy with a high social component. The state has not disappeared nor has it withdrawn. But the image of the sovereign power acting unilaterally and alone has consolidated its mythic force. The states engaged in the construction of Europe are increasingly interacting states. P. Hassenteufel (1995) devised the phrase to characterize the transactions between the state and its social partners. It lends itself well to describing another circumstance, that of the permanent transactions between political authorities in the context of polycentrism. The political factor has not disappeared but its action now takes place under increased external supervision and across a continuous ﬂux of negotiation between political authorities. The internationalization of the economy is accompanied and continued by the internationalization of norms and frames of reference in public policymaking, which itself has become a crucial issue in the political competition between states. In the present situation, the dominance of America in producing criteria of credibility, which are then adopted by world economic opinion, places European states in a position of dependence. Europe shows little inclination to assert itself. The interacting state is not a state eroded. The various components of multi-level government have no necessary equivalence since their legitimacy, hence their institutionalizing capability, differs profoundly. It is in the situation where the production of new rules is in question that the role of actors representing the hard core of public action becomes crucial; and this situation occurs when the more comprehensive requirements of adjustment—linked to a negotiation for instance—necessitate a thorough revision of rules that are more localized. It is then that these actors who are central to the political function bring a crisis to bear on institutional arrangements that are seen to

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be incompatible with development overall. The strengthening of the European Union may thus be gauged in its capacity to share with the national member states this initiating capability: the recognized ability to deﬁne and legitimate new institutions and compel their recognition by the partners concerned.

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Merrien, F.-X. (1997). L'État providence (Paris: Presses Universitaires de France). Pochet, P.-H. (1998). ‘Les Pactes sociaux en France’, Sociologie du Travail, 2/98: 173–90. Regini, M. (1997). ‘Still Engaging in Corporatism’, European Journal of Industrial Relations, 3/97. Richardson, J. (1995). ‘The Market for Political Activism: Interest Groups as a Challenge for Political Parties’, West European Politics, 18/1 (Jan.). Santiso, J. (1997). Wall Streeet face à la crise méxicaine (Paris: Les Études du CERI). Soskice, D. (1998). ‘Divergent Production Regimes’, in H. Kitschelt (ed.), Change and Continuity in Contemporary Capitalism (New York: Cambridge University Press). Thelen, K. (1993). ‘West European Labour in Transition’, World Politics, 46 (Oct.). Théret, B. (1992). Régimes économiques de l'ordre politique (Paris: Presses Univesitaires de France). Thunert, M. (1998). ‘Think-Tanks and the Politics of Ideas’, paper presented at the workshop on The Role of Ideas in Policy-Making, European Consortium for Political Research, University of Warwick, Mar. World Bank (1997). ‘The State in a Changing World’, World Bank Development Report (Oxford: OUP).

12 Breaking Open Black Boxes: The Implications for Sociological Theory of European 32

Colin Crouch Sociology has had far less to say than political science or economics about European integration. It has no difﬁculties discussing the effects of European-level measures on individual national societies; the problems start when it needs to confront emerging social structures which run unevenly across the boundaries of these societies. I shall here examine this question with particular reference to the idea of a European class order. At the heart of the neglect of European processes lies sociology's uncomfortable relationship with the nation state, which relates in turn to the subject's difﬁculty with its own fundamental deﬁning word: society. Is this a singular, general noun, or is it capable of having a plural? If the former, the subject is required to have a planetary model of actions, interactions, structures, etc., and to be a study of human society in the singular, even if in practice an individual sociologist would study only small corners of it. If society can have a plural, however, the subject has to identify the basis of deﬁnition of individual societies. These can then be studied as a number of examples of the same phenomenon. Among the many implications of this difference is a major methodological one. Only to the extent that it is possible to identify discrete societies, each regarded as an example of the same general phenomenon, is it legitimate to use statistical techniques which use individual societies and their attributes as units of analysis. In practice this problem is frequently resolved by using society and societies as words which can be substituted by ‘nation state(s)’ with only slight loss of meaning—what Smith (1995) has called ‘methodological nationalism’. When

32

This chapter has beneﬁted considerably from my supervising the doctoral theses of two students at the European University Institute, Florence: Bastiaan van Apeldoorn and Simon Dubbins. However, they are not to be held responsible in any way for the uses I have made of the things they have taught me.

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pressed, most sociologists will explain that they do this faute de mieux: many data are collected at the level of nation states; for very practical reasons these constitute the boundaries of units of study for research purposes.33 Nation state becomes a virtual synonym for society, most of us argue, because that is the nearest we can ever get to the idea. It is a pragmatic convenience rather than a theoretical identiﬁcation, and we reserve the right to remove the synonymous properties at will. It is thus not controversial to speak of, say, European society, Flemish society, Viennese society, or even non-geographically of bourgeois society, rural society. The recent 1119-page volume La Societat Catalana (Giner 1998) might be politically contentious in some Spanish circles, but few sociologists will have much difﬁculty with the concept. A fundamental reason for the coyness of sociology about its use of the nation state as the deﬁnition of its basic unit of study is that this concept is deﬁned politically, not sociologically; fully to accept it as a deﬁnition seems to mean accepting some kind of ontological superiority of political over sociological analysis.34 To be concerned at doing this is not simply a matter of disciplinary amour propre. If we deﬁne societies as nation states in theory and not just for heuristic convenience, we are implying the strong claim that political forces are the most powerful ones shaping social forms. Outside totalitarian societies there must surely be limits to and variations in the extent to which social institutions are determined by political ones. For example, while an education system is likely to be strongly shaped in this way, should we expect the same to be true of sexual practices? Such questions are legitimate topics for individual pieces of sociological research; the subject does not want to be stuck with a priori judgements on them. It therefore tends to leave the nation-state society as an unopened black box. A relevant and important contribution to this question was the study of marriage and child-bearing in Western Europe from 1870 to 1960 by Susan Cotts Watkins (1991), From Provinces into Nations. She shows how, in the early part of this period, patterns of regularity in women's ages of marriage, the ages at which they had children, and the gaps between them still tended to vary rather locally.35 Over time—and with the exceptions of Italy and Spain—

33

The existence of comparative studies reinforces rather than refutes this: to compare, say, France and Britain, is to claim that there is a relative boundary around these two entities which is more important than any wider whole of which they might be part, and than any subparts into which they might be divided.

34

Economics has the same problem, as it too needs to talk about the German economy, the Indonesian economy, etc.; ﬁnds it unusual though not impossible to talk about, say, the Scottish economy or the Breton economy; sees globalization in terms of what happens to national economies. Like sociologists, for most of the time economists ignore the issue.

35

The most local level of data she is able to use are for something approximating to provinces in the French sense, hence the title of the book. More generally, these are large administrative or local government units—hence still politically rather than socially deﬁned divisions. In reality the precise geography was probably not deﬁned by ofﬁcial lines on a map, but local interaction systems which become lost in the imposition of provincial and similar boundaries.

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these local patterns of behaviour became submerged within national ones, which in turn retained a strong proﬁle. The author's explanation of this is that, in the earlier period, nation states had little meaning for local life, especially among women who are the dominant actors in the issues concerned. Ideas about appropriate ages for marriage or childbirth would emerge from discussion and trend-setting within local communities of women, with little reference to behaviour in a wider society. Gradually, from the late nineteenth century onwards, the nation state increasingly invaded this local level. The building of railways—either by the state or with state licence—made interaction among people in different towns and villages easier. National newspapers and magazines spread knowledge about different fashions and approaches to life, especially those of the capital city, to the provinces. Here the state was not directly producing the magazines, but the world of politics, or perhaps a language zone, deﬁned by state boundaries, provided the most relevant geographical deﬁnition of their claims to coverage. If Cotts Watkins is right, national states have had a major, often implicit and even unconscious, role in shaping even intimate aspects of social behaviour: a hypothesis that both justiﬁes the frequent use of nation states as synonyms for societies and suggests sociology should give a more central theoretical place to political, legal, and other state variables in its own explanations than it normally wants to do. To do this would not require us to conclude that political variables are the only ones; identiﬁcation of the local, network-derived patterns that predated the nation state's largely inadvertent shaping of perspectives on marriage and childbirth in itself demonstrates the autonomous capacities of the social. We need simply to acknowledge the distinction between deep, structural elements and more accessible, organizationally shaped ones, not just, as sociologists routinely do, in differentiating between structure and action in speciﬁc studies, but in the constitution of societies themselves. Bartolini's (2000) distinction between ‘political sociology’ and ‘the sociology of politics’ is useful here. The former refers to the formation of organizations, movements, groups within society which actively seek to exercise political inﬂuence. The sociology of politics in contrast refers to deeper, less accessible structures within society which impart differential kind and levels of power to different social interests, which tend to be difﬁcult to change through deliberate action. There is a tension between the two approaches: the latter asserts a degree of determinism and ineluctability which would nullify the effects of the organizations erected by the former; political sociology in contrast seeks to demonstrate, or at least to explore the capacity for,

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deliberate action to offset, undermine, or in contrast to exaggerate, the inﬂuence of deeper structures. The tension is not however a question of irreconcilability; appropriately adjusted, there is room for both in the large task of explaining complex actions by complicated collective actors. Acceptance of the state as a force capable of forming and deﬁning social structures then becomes helpful to the task of deciding when society needs to be analysed at levels above that of the nation state.

Class Analysis in Historical Perspective These arguments can be considered in more detail through the case of class analysis, provided we use the classical approach to this concept which sees it as being primarily about collective social action: classes are groups which have broad, identiﬁable, collective economic interests within the system of production, for which they may or may not have means to give effective expression.36 Such means may be of two kinds. There are structural means, those which ﬂow from the operation of the system itself (e.g. the ability of managers to derive authority and high incomes by virtue of being in such a role; or the ability of skilled workers to achieve higher incomes than unskilled because their skill is in short supply). And there are organizational means, whereby class groups take deliberate action to maximize their interests (e.g. employers' associations and trade unions). In other words, class may be used for both political sociology and the sociology of politics in Bartolini's sense. Class has, in principle, never been tied to a particular national context in sociological theory. In particular the Marxist notions of class which have sustained a substantial theoretical development over the past century and a half quite explicitly relegate nation states as variables. Indeed, one of the purposes of Marx's entire theory was to replace the role of the state as the engine of history by that of class. Nevertheless, in practice most work on class, including

36

This is the kind of meaning given to class in Marx, Weber, and most of the other classic texts. It is not however that which which has dominated the sophisticated professional sociological literature of recent times. Here there has been an overwhelming preoccupation with class in a passive sense, as an attribute that can be given to individuals. The artefactual signiﬁers of class have been changing rapidly for at least forty years in most western societies. To conceptualize class for purposes of current research has been to shoot at a moving target. In particular, certain changes have led some observers to conclude that the phenomenon has cased to exist. Therefore class theorists have needed to demonstrate that their concept, and the ideas of individual classes deriving from it, can be used in the analysis of societies, by showing that it is possible to allocate people to them. Further, and acting very much in tandem with this motive, a large amount of sociological research wants to use class as an explanatory variable for social behaviour: from studies of social mobility, via those of electoral behaviour, to those of morbidity and mortality. This again needs class as a passive attribute that can be assigned to individuals. However, the fact that most class theory retains the idea of economic relations keeps some sense of more active, collective meanings (e.g. Kreckel 1992; Erikson and Goldthorpe 1992; Marshall 1997; Marshallet al. 1997).

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that of the Marxist tradition, does deal with the subject as though it were a national phenomenon. The principal reason is the difﬁculty that class theory has in ﬁtting its fundamentally economic and universalist analysis to the cultural and other signiﬁers that make it a reality in everyday life, even though this difference is always acknowledged in principle. The heart of the problem is that modern capitalist societies are usually seen as fundamentally different from preceding social systems. For example, the estate orders of post-feudal society are seen as having been ofﬁcially ordained by legal codes; slave societies are clearly stratiﬁed through legal distinctions between slave and free. It does not require a sociologist to discover the existence of such a class order. Capitalist society, consonant with its liberation of the economy from political dominance, is seen as distinctive in producing its class systems through either the economic alone or an interaction of the economic and the social. These systems are seen as not having a legal or political deﬁning component, even if they have strong political implications.37 However, the fact that class orders and stratiﬁcation arrangements are usually studied as national systems should give us pause. If national boundaries are so important, and if these boundaries designate primarily political or legal orders, is it not likely that the nation-bound character of class indicates some essentially political deﬁnitions of classes in capitalist society, suggesting that that form of society may not be so distinctive after all? Let us look again at the contrast between post-feudal estates and capitalist classes. In the former the allocation of different sets of legal rights and citizenship entitlements was what imparted clarity to status order distinctions: one could tell the different ranks of aristocracy from one another in this way; also the ﬁrm barrier between aristocracy and bourgeoisie; and the formal rights attaching to property ownership of the latter which separated them from peasants, landless labourers and the urban poor. These formal, legal, hard-edged categories were linked to matters of economic condition, standard of living, and cultural style; and it was the combination of formal status, level of income and wealth, and the style in which these were used, which gave the class order its vivid presentation in everyday life. The links between the formal legal system and these empirical manifestations were easy to trace: different legal statuses and levels of property ownership were likely to affect level of living; and the heredity associated with positions imparted intergenerational traditions of cultural style. There was a basic similarity to these patterns right across Western and Central Europe, because there were important

37

Weber's scheme, which has been the most inﬂuential in non-Marxian European sociology, limits the concept of class to economic relations, status to subjective rank orderings, and ‘party’ to the political organization of interests. This is a valuable breakdown, but since the resulting whole has to be reconstructed as a system of social stratiﬁcation, the fundamental problem is not resolved.

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basic similarities in economic order and political arrangements. Nevertheless, there was considerable diversity within a basic pattern, and the diversity can usually be related back to the speciﬁc political powers (monarchies, duchies, free cities, etc.) which developed and sustained the varying legal processes that deﬁned the order. However, the links between formal legal order and socio-economic reality were far from perfect. Economic reality was liable to ﬂuctuate and distort the pretensions of the slower moving legal system; indeed the latter was sometimes elaborated as a desperate measure to counter, say, a challenge to an economically declining aristocracy from an emerging and thriving new bourgeoisie. Such literary ﬁgures from the sixteenth and seventeenth centuries as Don Quixote (the penniless, socially marginal aristocrat), or Molière's paradoxical use of the idea of a bourgeois gentilhomme, are testimonies to these incongruities produced by social change. There was far from a perfect ﬁt between formal classiﬁcation and economic realities. A similar account can be given of the familiar classes of capitalist society. As industrial capitalism replaced the postfeudal rural order in the mid- to late 19th century, certain basic class divisions became embedded in legal and private authority orders—in particular property-rooted deﬁnitions of citizenship entitlements, especially the right to suffrage. In addition, most ﬁrms of any size deﬁned their employees into categories: the basic division between manual and non-manual; skill divisions among the former; later, distinctions between managerial and clerical workers. Some of these distinctions ordained by private authority also found their way into public legal codes: 1. The legitimation of property rights legally established certain class differences. 2. The precarious nature of much manual work and the social life associated with it, combined with the fact that manual workers in most countries developed a capacity for organization superior to that of clerks, eventually led to acknowledgement of the ‘social question’ of working-class life, culminating in legislation deﬁning workers' rights to various kinds of occupational and social protection. 3. Partly through the same process, partly through the development of privileges for certain kinds of non-manual and skilled manual workers, pensions and social security systems were developed which gave different rights to people in different occupational categories. 4. Since access to many occupations required particular educational preparations, certiﬁcation, and qualiﬁcation, which were organized or at least regulated by state authorities, various broad occupational classiﬁcations became embedded in law. 5. The organization of employees (which often reﬂected important divisions

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among occupational types) and of employers were subject to various legal orders—sometimes making them illegal, sometimes legitimating them, sometimes making use of them, and giving them a formal place in the organization of interests of the state. It was through such means that the potentially immense number of different social interests relating to the labour market itself were fashioned into far larger concentrations of recognizable entities, having a reality at the political and legal as well as the economic level. This is often missed in sociological theory. Even when it is fully recognized that the market processes, which lie behind the formation of classes in the dominant Weberian approach to the subject, produce a myriad positions and not broad classes, the politico-legal and employer-driven processes by which the latter are generated are rarely adequately perceived (e.g. Giddens 1980). From these complex and protracted processes emerged the patterns of occupational classes typical of industrial capitalism. The main framework was based on that of the large industrial ﬁrm, with some levels of management and associated professionals, clerical workers, and manual workers ranked by skill levels. There was often also a subsidiary order based on the state's own civil service, but sometimes imitated in the structure of at least the non-manual parts of the private corporate hierarchy (Kocka 1981). As in the post-feudal period, certain basic themes appear over again in these processes. They were however all implemented by different political authorities, usually working alongside employers (private authorities) and their concepts of organizational structure, at the nation-state level. Differences thus emerged at this level in the way that basic themes were structured. Furthermore, all these issues could be and were the objects of political struggle, with varying outcomes. And these struggles would be national political ones. Because these various legally and politically deﬁned differences often reﬂected different levels of educational achievement, and because they had important consequences for earnings, property ownership, and position in hierarchies of authority, they usually had extensive implications for everyday social life and were not just abstract legal formulations. At the same time, because society changes and varies in far more ways than can ever be captured by legal codes, the ﬁt between the two—formal, legal, political versus quotidian empirical—was far from perfect. Manual workers earning more than petit-bourgeois shop-owners were entirely possible—just as were factory-owning slaves in ancient Rome, or monarchs in debt to non-citizen Jews in medieval Europe. Classes, in any type of society, are therefore constituted by certain differences in property- and labour-market positions, the educational, cultural,

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and material-income differences associated with these, and certain authority-driven categorizations (from both legal and employer sources). To the extent that these different sources of differentiation produce similar cleavages, there will be an identiﬁable class structure. If they run in many different directions, any structure will be far less perceptible and have little social reality. If there are some direct contradictions (between, say, what the labour and property markets are producing and what is produced by private and public authority sources), there is probably some major change in process. There is nothing here unique about class in capitalist as opposed to earlier societies. All this helps explain why the study of class usually remains rooted in national contexts. It is as erroneous as seeking the causal primacy of chickens and eggs to ask what is prior in this ensemble of economic structure and socio-legal deﬁnition of it. The Marxist tradition of course seeks primacy in the economic, and regards everything else as stemming from that and having an epiphenomenal relationship to it. But this can be valid only at an heuristic level. In reality all class structures—like chickens and eggs—emerge from a long historical evolutionary chain which starts in another earlier, different, and constantly changing system. There is constant reiterated interaction between economic resources, law, and social custom. Much of the architecture of the nineteenth-century legacy of class structure survives today and continues to be reproduced, while other aspects of it have been dismantled. Its forms being heavily based on the hierarchy of the manufacturing ﬁrm, they transfer only awkwardly to the various services sectors. However, just as the class structure of industrial society itself continued to bear its post-feudal legacy, so post-industrial society continuously adapts itself to its own industrial legacy. Two things in this complexity seem clear. One is that, with the decline of manufacturing employment, class structures in the mass of the population have become more vague, cross-pressured, and ambiguous than they were during the heyday of industrialism. The second is that, at the level of ﬁnancial-asset ownership and managerial power within large corporate organizations, a dominant capitalist and business executive class is acquiring a clarity and a political power that it has lacked since the earlier part of the twentieth century. This latter aspect is concealed by the fact that there is considerable new social recruitment into this class. It is growing in size; therefore there has to be upward mobility into its ranks (Erikson and Goldthorpe 1992). This produces a heterogeneity of lifestyles and a loss of cultural coherence. This, often taken to be an indication of a new classlessness, is in fact something very different: a period of class growth rather than of stability. Something similar must have been experienced in the early centuries of European reconstruction after the fall of the Roman Empire, when new aristocracies were establishing themselves and their symbols—borrowing these from Roman, Germanic, and early Christian cultural and legal sources,

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but constructing out of them and of the changing exigencies of their own times a new, initially eclectic, but eventually instantly recognizable Gestalt. This is taking place today with the construction of a realm of symbol and practical reality that celebrates the concept of the executive, the new entrepreneur, the corporation, the institutional shareholder.

In Search of European Class Action To explore this fully here would take us far from our present theme, which is the construction of a socially rooted European political space. What we need from the above discussion is just the following: since class has its roots eclectically in economic relationships, political and other authoritative designations, and day-to-day social life, it must be expected to be found existing in different degrees of clarity and articulation within different institutions. In particular, class identities will not cohere into recognizable blocs unless there are political and related forces; and these forces will determine the geographical or other boundaries around such identities. We should therefore expect that, as systems of order and governance are established at such a level as the European Union, the political sociology of class should begin to produce transnational social structures, classes which are not deﬁned at a national level but at that of international relations.

Recent Theoretical Approaches Some attempts have already been made to analyse an internationalization of class, not necessarily related to European themes. There is some sociology of global society, in the sense of an analysis of how different subunits of the system—again here largely in terms of nation states, but conceived as subunits rather than units—ﬁt together to form some larger unit of sociological analysis (Cox 1987; Gill and Mittelman 1997). To the extent that societies are related to each other through trade, each having different comparative advantages and therefore trading asymmetrically, they are not a series of examples of similar systems, but components of a wider system, the world order. The main established approach of this kind is the dependency theory associated with Immanuel Wallerstein and others (Hopkins and Wallerstein 1982; Wallerstein 1974–89, 1979), who have been primarily concerned to deﬁne the relations of centrality and marginality imposed on different parts of the world through the operation of the capitalist economy. The most advanced economies (the USA and north-western Europe) are seen as a core, which imposes highly dependent and peripheral roles in the international division of

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labour on countries in the Third World. Poorer countries around the fringe of the core (e.g. Portugal or Greece) become a semi-periphery. The thesis predicts different kinds and levels of economic development, rooted in relations between national economies. Dependency theory has its critics; in particular its static character did not predict the emergence of certain parts of the former periphery—starting with Japan—into core positions, eventually sustaining their own core relations with peripheries in other parts of the world. However, it opened an important type of thinking. In particular, while one might use a shorthand and say that the theory speaks of countries being in dependency relations, it is really referring to differential positions of interests within those countries. For example, property-owning groups within Latin American countries were not themselves in peripheral positions, only the mass populations of their countries. Dependency theory as such does not claim to be relevant to the internal study of Western Europe, except in considering relations between richer, mainly northern, core countries and the semi-peripheral south. However, by looking at different interests within societies and how these might act cross-nationally, it takes us to the issue of the extent to which social interests should be seen as conﬁned within or transcending their national pillars. Can some of them act across borders, possibly combining with identiﬁable counterparts in other countries? Can all interests do this equally, or are there grounds for expecting them to do so in unequal ways? An important contribution here has come from those around the Amsterdam School of International Relations (e.g. Overbeek 1993; Van der Pijl 1989). They share a position broadly similar to that taken here that capital, while existing at a general level, depends on the state system for the ‘support’ of classes ‘in their particularity’ at a national level (1900: 10): ‘the international classes, which take part in this process of internationalization, can achieve hegemony only if they succeed in synthesizing their international perspectives with a national one’ (p. 12). As international relations specialists rather than sociologists, these writers are spared the need to inquire into too much detail into the changing structure and dynamics of class relations. Van der Pijl (1984, 1997) in particular tends to accept Marx's original framework of exploitative relations achieved through property without a separate inquiry into whether this gives an adequate account of the social structure of contemporary societies. He therefore concentrates on a dominant business class, and has little to say about the full class structure within which this might be embedded. However, while this eventually becomes a serious shortcoming, it provides a useful start to transnational analysis. Just as in considering the politics of medieval society it is not necessary to describe very precisely the diverse ranks of the broad mass of the population, only an aristocracy and certain urban bourgeois groups, so in the modern global economy the mass

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of the working population exist passively with very restricted capacity to act. They are conﬁned to their nation state in the way that earlier peasants were conﬁned to village affairs. This is another valuable reminder for sociology: if class is something fashioned from a complex and partly contingent interaction of structural and organizational, economic and political variables, it is not necessarily an attribute that everyone possesses to an equal degree. This is obscured by most research into class, which needs to allocate everyone to a class category—like an age or gender category—for the purposes of data analysis. In reality, even if all people are in classes, some classes are more class-like than others.

Class in the Construction of European Union Of course, a good deal of, probably most, public business remains transacted at national level, so the emergence of a transnational level does not make a mockery of national citizenship. However, if we concentrate on the task of studying the transnational level as a level of social and political action in its own right, one of the ﬁrst things that we notice is that it is a very thinly populated action space, and that, apart from national governments, almost the sole participants in it are the entrepreneurs and leading managers of large enterprises: a group deﬁned by an economic interest in the system of production and therefore a class group. Further, the content of effective law and regulation at this level is, apart from some limited questions to do with war and military violence in general, primarily concerned with the regulation of trading relations. The regime of world governance growing up now under the World Trade Organization has very little concern with the affairs of labour or any other economically deﬁned interest other than those engaged in trade. The main exception is the International Labour Ofﬁce, and it is interesting to note that, despite being far older than the WTO, it has virtually no means at its disposal to enforce its conventions—from which in any case governments can withdraw their countries at will, without sanction—a marked contrast with the international trade regime. If we shift from the general transnational level to that of the European Union, we note ﬁrst a similar situation: a thinly populated public space, with the main players being the leaders of large business corporations. On the other hand, we also note an emerging regulatory regime concerned with a wider range of issues, including those of labour, and a more strongly structured organizational arena. It is worth reﬂecting brieﬂy on the historical development of this process. The original vision of European integration was extensive, envisaging in the famous phrase from the Treaty of Rome, ‘an ever closer union’. A very

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powerful part of its origins lay in overcoming the enmity of the French and German nations, conceived as being both a matter of strategic interests (including control of coal and steel resources) and a real hostility among people. This was not a question for class analysis. A second core task was a class one, but one relating to the past: a need to manage a gradual and gentle decline of the European peasantry, in a manner that would ensure its political loyalty to essentially modernizing, capitalist political parties, preventing it from veering off to the far right or to communist sympathies. Hence the two initial institutions of the European Coal and Steel Community and the Common Agricultural Policy, which for the ﬁrst three decades of the European Communities remained their single most important institutions. There were also however two other components, which were relevant to contemporary class analysis. One, the European Economic and Social Council, gave some recognition to the class struggle between capital and labour, which was seen as having been part of the causes of the rise of fascism—just as, at a wider international level, the ILO in Geneva had been founded as part of the Treaty of Versailles at the end of the First World War. However, this did not develop beyond being a harmless talking shop. There was little real drive or energy in a European social agenda. The second component proved far more potent. This was the task of liberating markets embedded in the Treaty of Rome. Originating in the drive to eradicate the protectionist barriers that had been typical of Europe, this became the main engine for developing the Community in what was to be for most of its history to date its predominant form: a Common Market. This emphasis was further assisted by the priority of negative over positive integration (Scharpf 1997). It is easier to secure agreement on dismantling something than on creation, since the latter requires a more elaborate consensus. Therefore, the core thrust of European policy became breaking down barriers to free markets. This is a capitalist agenda, if one views capitalism as being an economic system within which the interests of most groups will be served to the extent to which they can be pursued in market form.38 However, issues of employment relations were not raised as part of this agenda; the potential attack on labour organizations embedded in the idea of making illegal any action in restraint of trade was not raised. Labour relations were matters for the member states. As a result, European affairs were primarily of importance to ﬁrms and to capitalist interests. Organized labour was a very minor player; other social classes even less.

38

Within the Marxist tradition it would be argued that only the interests of capitalists are served within such an economy. This misses a fundamental point about capitalism or almost any other major, persisting form of social order: the order provides, not a deﬁnition of the groups which will gain from a zero-sum competition, but a positive-sum game which will serve different interests in unequal ways. Workers gain from capitalism to the extent that their position in the labour market helps them secure goods in the product market.

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In the absence of parliamentary government responsible to mass suffrage, the ﬁrst quarter-century of the European Communities reproduced an almost ideal-typical capitalist polity: neither democracy nor organized labour interfered with the business of managing the affairs of capitalism. If there was a European citizenship it was enjoyed by the business interests which lobbied the Commission and national governments. This does not mean there were no tensions. There is no single capitalist interest. In particular the conﬂict between mercantilist protectionists and freetraders, which had divided capitalism within a number of nation states earlier in the twentieth century and in the nineteenth, also appeared. To some extent this was a conﬂict between French and German approaches, France having been the classic case of protectionist, state-led modernization (Hayward 1986); but it was a clash of different interpretations of the interests of European capitalism before it was an inter-state question (van Apeldoorn 1998). Indeed, when this issue ﬁnally came to a head and unleashed a new wave of European polity building, over the affaire Cassis de Dijon, the French and the Germans were lined up in precisely the opposite way! From this affaire emerged the single market programme, and an apparently unstoppable sequence of initiatives for monetary union—but now also for a social dimension to European integration. This rapid shift to a far faster gear of European development took place within a wider context of major global change. The Bretton Woods order of exchange rates had gone in 1973; economic globalization was unleashing a whole new set of liberalizations; the collapse of communism left capitalism as the only economic system for industrial and post-industrial society.

Recent Empirical Developments What, in this new, highly dynamic phase of European development, became of the quietly capitalist character of the European polity? The answer is complex. The single market programme in itself reafﬁrmed and reinforced the original free-market doctrine, though it did not immediately resolve the issue of protectionists against free-marketeers where relations with the rest of the world were concerned. This latter was achieved by the response to globalization, and its accompanying priority for the great European corporations to be able to join US and Japanese counterparts in world partnerships in projects requiring major investment and extensive preliminary research and development which could not be tackled from one continent alone (Ohmae 1985). Here European integration became only a useful stepping stone, not a substantive goal. This in turn produced a logic of systematic deregulation, or rather a privatization of regulation as these transnational partnerships draw up rules to govern such matters as the division between areas of co-operation

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and areas of competition, or the location of the different production and administration facilities needed for the various operations. Even though each ﬁrm remains grounded in a particular nation state, the partnership itself does not. And these partnerships—which can act with considerably greater speed and decisiveness than groups of states—develop a capacity for governance as they regulate their internal conduct. Such regulations may have extensive externalities, which governments, even the whole concert of nations, have to accept as givens in their environment. Here was a thoroughgoing capitalist agenda, with the only signiﬁcant players being corporate interests and their associated lobbying ﬁrms, working with the Commission and national governments, but wanting institutions created at these levels solely for the purposes of building an unregulated global capitalism. Global corporate actors are politically very interesting. At one level they thrive on being exogenous to the polity which they are lobbying, stressing their mobility, lack of local commitments. and capacity to move to wherever on the globe they ﬁnd the most attractive conditions. At the same time they are also endogenous. They can supplement the objective facts created by their economic activities with lobbying and other action within the political systems of various states. In this way they themselves get inside the black box of interstate economic relations. It is not enough to study them as a series of purely national inﬂuences contributing to the international economic policy stances of individual governments. In response to these empirical developments has emerged a number of different, somewhat competing, schools of thought called international political economy, or new international relations. These try to go beyond the automatic assumption of state interests and produce reasons why particular states might be dominated by particular social or economic interests on various issues. Even then, truly complex internal interest questions might still seem to be relatively at the margins of concern, the main need still often being to derive the raisons d'état which remain the primary focus of interest. Each nation state is seen as subject to its normal internal lobbying process; then, having made policy in response to that, it goes off to Brussels with its national interest deﬁned to work out compromises with its nationstate counterparts. Such an analysis implies a cross-European model analogous to that of the consociational state: interaction across the units is restricted to the political élite, while the rest of the society interacts only within its pillar (in this case the nation). But this must then come to terms with the differential ability of different kinds of actor to operate within more than one individual national polity, as well as at the European level itself. Here international relations legitimately looks to sociological theory and research for knowledge of how these processes take place. There could within this frame be differences between, say, a French approach still favouring national champions, and a British one favouring

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freedom of markets and inward investment from the USA and, increasingly, Japan and Korea. However, a purely intergovernmentalist perspective at this level conceals the shaping of cross-national divisions and strategies from an increasingly uniﬁed big-business élite seeking a shared interest and gradually shifting the agenda and priorities of the Commission towards their concerns. Consistent with this interpretation, the national champions strategy soon fell away (Hayward 1995b). To open the black box of the nation states in the single market programme and the Treaty of Maastricht is to reveal this process. Like all class phenomena, it took partly an immanent, structural form, partly an overt organizational one. The former is seen in the dependency of Europe on the ability of these ﬁrms to deliver economic returns—a development consistent with Lindblom's (1977) explanation of the fundamental dependence of governments on business interests. The organizational form was revealed as the existence of the Community-led interest organizations, constructing and articulating themselves at its level, and increasingly taking it seriously. An important example is the growing inﬂuence of such bodies as the European Roundtable of Industrialists (van Apeldoorn 1998), as well as in the growing attention paid to direct lobbying in Brussels by individual corporations (Coen 1996). Initially this process continued to lack a signiﬁcant labour, consumer, or generally democratic component. The achievement of European monetary union has been similar. Here national interests were fundamental, as countries contemplated surrendering their currencies, major symbols of identity as well as sources of economic policy autonomy. They did however do so, and settled on an economic-liberal interpretation of what that meant. That the new banking system is based on the German one is clear and follows logically from the fact that the Bundesbank was by far the biggest and most successful of the European central banks. However, its rules also correspond closely to a pure capitalist interest in their imposition of tight constraints on government borrowing, on Keynesian deﬁcit spending, and to some extent on public spending as such.39 Both Germany and France have chosen to accept ﬁnancial systems closer to the interests of a pure ﬁnancial sector outlook in order to prepare for it (Story 2000). This is not however the full story. The need for a wider democratic involvement, long dormant in the original aspirations of the Treaty of Rome, became increasingly important as the ambitions of the European agenda reopened in the 1980s. This was the period when Jacques Delors, then President of the Commission, raised the issue of Europe's ‘democratic deﬁcit’ and the need to

39

The design is more ordoliberal in the German sense than Anglo-American neo-liberal (Taylor 2000). This, alongside the very particular interests of British ﬁnancial capital in the City of London, helps explain the paradox of the UK, the most economic-liberal and monetarist country within the EU, standing outside the monetarist European Central Bank (Talani 2000).

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avoid the EC becoming ‘businessman's Europe’ (Hayward 1995a). This led to the democratization of the European Parliament; the launching of initiatives to the regions and cities; and the attempt to shape a social dimension to European integration. At precisely the moment when business interests were ﬁnding new, extensive scope for inﬂuence over European developments, labour was beginning to ﬁnd its voice (Dubbins forthcoming). While this has produced some interesting conﬂicts, it is also important to note that both business and labour interests have grown in inﬂuence. This has been possible because the scope of European decision-making has been becoming more extensive; the Europolity has not been a simple zero-sum game. But labour could only act at the European level when an explicit organizational space opened for it; as a structural class actor, labour has remained extremely limited, partly because of the continuing difﬁculties of cross-national mobility for this factor of production in comparison with capital. As European integration began to make increasing demands on the support and loyalty of ordinary people, so a European citizenship, in both strict and more extensive senses, was placed on the agenda. As with similar processes at the level of nation states, this meant that the Community could no longer be responsive solely to business concerns. From this date we can identify a rapid development in the organization of labour interests. Relations between UNICE and ETUC have acquired a new importance; the Treaty of Maastricht was accompanied by the Social Protocol, later embedded within the Treaty of Amsterdam, and which has now produced some limited but enforceable agreements; a social dialogue among the social partner organizations engages in a signiﬁcant agenda; and there are growing links between organized capital and labour at sectoral level (Dubbins forthcoming). A distinct body of European labour law is developing (Caruso et al. 1995), which, like national labour law, deﬁnes classes—though the social impact of this is weak because the law touches only a few points of primarily still national systems. The class model hereby deﬁned, appropriately for the post-industrial period, does not identify a distinction between manual and non-manual labour, only one between employees and non-employees. It may however also reinforce distinctions between a core labour force of persons with normal employment contracts, and a large minority engaged in atypical work outside the scope of such contracts and their legal obligations. In this sense European law may be helping to deﬁne a new great class distinction between the secure and the insecure already immanent in post-industrial employment, but which has not yet taken concrete form in recognized social categories. On the other hand, it can still be argued that these processes remain a byway of European affairs; most initiatives in the social dimension are checked; employers' organizations are blocking most actions in the Social Dialogue; the role of labour in the overall Europolity remains marginal. The

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project is powered by business; business interests propose the main solutions to labour's own problem of unemployment. Further, while large ﬁrms are conscious of their interests at the European level and the need to act to pursue them, this sense is far less widely distributed among small capitalist or among labour interests. In any case, labour operates at the European level only through organizations of existing organizations, usually of those formed at an earlier stage of capitalist development. There is virtually no evidence of direct, fresh articulation of non-capitalist class interests—certainly nothing to compare with the vital energy of direct corporate lobbying in Brussels (Coen 1996). European integration thus offers us an important insight into contemporary class relations. It is a period in which the factors which structure interests in the mass of the population are weak, contradictory, and confused, but where the clarity of interests and professional competence to deﬁne them among large-scale capital are growing. The Europolity remains a relatively thin space. Unlike national polities it is uncluttered by the freezing in institutional form of the outcomes of past struggles; it remains divorced from the many other issues that shape life within a national society. Behind the intergovernmental quarrels which dominate daily European politics we are able to see a wider confrontation of social forces. There is as yet no European society in the deeper sense of day-to-day social interaction, but precisely for that reason there is clarity in what it has most achieved as a structure of capitalist relations. To address this properly, sociology has to question some of its own unspoken assumptions about units of analysis. This valuable questioning reawakens interest in class as a source of social action rather than as of passive forms of labelling. It also helps us both to cease treating class as something implicitly national, and to see why its articulation is in part tied to important levels of political action.

References Bartolini, S. (2000). The Class Cleavage: The Political Mobilization of the European Left, 1860–1980 (Cambridge: CUP). Caruso, B., D'Antono, M., and Sciarra, S. (1995). Il Diritto di Lavoro nell'Unione Europea (Naples: Edizioni Scientiﬁche Italiane). Coen, D. (1996). ‘The Large Firm as a Political Actor in the European Union: An Empirical Study of the Behaviour and Logic’, Ph.D. thesis, European University Institute, Florence. Cotts Watkins, S. (1991). From Provinces into Nations: Demographic Integration in Western Europe, 1870–1960 (Princeton: Princeton University Press). Cox, R. W. (1987). Production, Power, and World Order: Social Forces in the Making of History (New York: Columbia University Press).

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Crouch, C. (ed.) (2000). After the Euro: Shaping Institutions for Governance in the Wake of European Monetary Union (Oxford: OUP). Dubbins, S. (forthcoming). ‘Development of Sector-Level Industrial Relations Institutions at the Level of the European Union’, Ph.D. thesis, European University Institute, Florence. Erikson, R., and Goldthorpe, J. H. (1992). The Constant Flux (Oxford: Clarendon Press). Giddens, A. (1980). The Class Structure of the Advanced Societies, 2nd edn. (London: Hutchinson). Gill, S., and Mittelman, J. H. (eds.) (1997). Innovation and Transformation in International Studies (Cambridge: CUP). Giner, S. (ed.) (1998). La Societat Catalana (Barcelona: Institut d'Estadística de Catalunya). Hayward, J. E. S. (1986). The State and the Market Economy: Industrial Patriotism and Economic Intervention in France (Brighton: Wheatsheaf Books). —— (ed.). (1995a). The Crisis of Representation in Europe (London: Cass). —— (ed.). (1995b). Industrial Enterprise and European Integration: From National to International Champions in Western Europe (Oxford: OUP). Hopkins, T. K., and Wallerstein, I. (1982). World-Systems Analysis: Theory and Methodology (London: Sage). Kocka, J. (1981). Die Angestellten in der deutschen Geschichte 1850–1980: Vom Privat-beamten zum angestellten Arbeitnehmer (Goettingen: Vandenhoeck & Ruprecht). Kreckel, R. (1992). Politische Soziologie der sozialer Ungleichheit (Frankfurt-am-Main: Campus). Lindblom, C. E. (1977). Politics and Markets (New York: Basic Books). Marshall, G. (1997). Repositioning Class: Social Inequality in Industrial Societies (London: Sage). ——Swift, A., and Roberts, S. (1997). Against the Odds? Social Class and Social Justice in Industrial Societies (Oxford: OUP). Ohmae, K. (1985). Triad Power: The Coming Shape of Global Competition (New York: Free Press). Overbeek, H. (ed.). (1993). Restructuring Hegemony in the Global Political Economy: The Rise of Transnational Neo-Liberalism in the 1980s (London: Routledge). Scharpf, F. W. (1997). Balancing Positive and Negative Integration: The Regulatory Options to Europe, RSC Working Paper (Florence: European University Institute). Smith, A. (1995). Nations and Nationalism in a Global Era (Cambridge: Polity Press). Story, J. (2000). ‘The Political Economy of EU Financial Integration: the Battle of the Systems’, in C. Crouch (ed.), After the Euro (Oxford: OUP). Talani, L. (2000). ‘Who Wins and Who Loses in the City of London from the Establishment of European Monetary Union’, in C. Crouch (ed.), After the Euro (Oxford: OUP). Taylor, C. (2000). ‘The Role and Status of the European Central Bank: Some Proposals for Accountability and Cooperation’, in C. Crouch (ed.), After the Euro (Oxford: OUP). Van Apeldoorn, E. B. (1998). ‘Transnational Capitalism and the Struggle over European Order’, Ph.D. thesis, European University Institute, Florence.

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Van der Pijl, K. (1984). The Making of an Atlantic Ruling Class (London: Verso). —— (1989). ‘Ruling Classes, Hegemony, and the State System: Theoretical and Historical Considerations’, International Journal of Political Economy, 19/3: 7–35. —— (1997). ‘Transnational Class Formation and State Forms’, in S. Gill and J. H. Mittelman (eds.), Innovation and Transformation in International Studies (Cambridge: CUP). Wallerstein, I. (1979). The Capitalist World Economy (Cambridge: CUP). —— (1974–89). The Modern World-System, 3 vols. (New York: Academic Press).

13 The Evolution of Economic Policy-Making in the European 40

Peter A. Hall Inexorable if uneven progress toward economic integration has been a central feature of Western Europe for half a century. Post-war reconstruction turned on arrangements facilitating trade among the European nations (Eichengreen 1997). During the 1950s and 1960s, industrial growth was underpinned by the formation of a European Coal and Steel Community, followed by a Common Market (Milward 1992). The 1980s and 1990s saw another burst of integration with the formation of a ‘single market’ and agreement on a monetary union (Moravcsik 1998). Integration has posed serious challenges for economic policy-makers. Although it opened up new economic opportunities for the European nations, it also intensiﬁed competition among them, and policy-makers have been called upon to devise strategies for ensuring national success in such competition. These strategies shifted over time, as integration altered the problems confronting policy makers and the instruments available for resolving them. As the character of policy has evolved, comparative political economists have also had to change the analytical frameworks they use to identify and explain cross-national patterns in the economic policies adopted by the European nations. The initial objective of this chapter is to trace the principal changes in national economic policy-making and the analytical frameworks employed to understand it that have occurred since the war. I identify three literatures that match distinctive eras of economic policy-making in Europe and compare the answers that each gives to four general questions: (i) how are the principal economic challenges facing the European nations deﬁned? (ii) what does

40

This chapter has been inﬂuenced by many discussions with David Soskice, Stewart Wood, and Pepper Culpepper, who may not agree with all of the arguments advanced here but are undoubtedly responsible for some of the insights. See Hall and Soskice (forthcoming) for joint work on which this essay draws extensively. I am also grateful to Rosemary C. R. Taylor for comments that signiﬁcantly improved the chapter.

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good economic policy-making entail? (iii) what are the institutional conditions associated with successful policymaking? and (iv) what kind of categories or comparisons among nations does each analytical framework emphasize? The analysis reveals some dramatic shifts in the way in which economic competition in Europe has been perceived. An investigation of this sort is especially appropriate for a volume dedicated to Jack Hayward whose work on such issues has been pioneering. Over four decades, he has illuminated the efforts of European governments to master the economy, beginning with analyses of economic planning in France, followed by some of the ﬁrst systematic comparisons of economic policymaking across nations and accounts of the impact of European integration on economic policy (cf. Hayward 1966, 1975, 1976, 1986, 1995).41 As the century turns, economic policy-making in Europe is also entering a new era. With the creation of a single market and the advent of monetary union, the European economies are more closely intertwined than they have ever been, and policy-makers are struggling to manage new types of interdependence. Political economists are also searching for frameworks with which to understand the challenges facing the economy and the policies adopted in response to them. Cross-national convergence is one of the central issues here. Many believe that the extensive political and economic integration of the European Union will enforce a new homogeneity on the political economies and policies of its member states, whether through cross-national agreement on a common set of policies or processes of competitive deregulation unleashed by a continental market. However, the analytical frameworks used in the past are not altogether adequate for evaluating these problems. Accordingly, the other objective of this chapter is to develop a new approach for understanding economic policymaking based on a literature about ‘varieties of capitalism’. I outline the central features of this approach, draw out its implications for economic policy-making, and indicate how it can be applied to issues of convergence in the European Union today. The result is a new perspective on both economic policy and convergence. I begin by examining earlier periods in post-war European policymaking and the analytical frameworks devised to understand them.

The Era of Competitive Modernization After an initial phase of post-war reconstruction, the period of economic policy-making running from the 1950s through the 1960s might best be termed

41

I still recall my excitement twenty-ﬁve years ago when I ﬁrst encountered Jack Hayward's articles and discovered the insights that a political approach to the analysis of economic policy could supply. All who work in the ﬁeld must be grateful to him.

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an ‘era of competitive modernization’. It was dominated by a distinctive economic problematic, that is, a particular conception of the principal challenges facing the economy, which emphasized the importance of securing high rates of growth in gross national product. Although economic growth is a familiar policy objective today, this was when it rose to prominence as a national goal (cf. Maier 1981). The precondition for its emergence was a repudiation of the classical economics that had made ﬁscal balance the principal objective of policy during the inter-war years and the invention of an economics broadly Keynesian in inspiration. The latter saw the economy in terms of aggregate demand and supply that emphasized national product (cf. Moggridge 1976; Shonﬁeld 1965). The new economics also rejected the classical contention that, left to their own devices, private markets would equilibrate on high levels of production and employment. In one form or another, the economists of the 1950s began to accept the arguments of John Maynard Keynes that state intervention would enhance rather than reduce levels of employment and growth. The failure of laissez-faire policy to stem the rising tide of unemployment between the wars, the success of interventionist policies during the Second World War, and the higher rates of growth apparently sustained by activist policies after the war, lent impetus to such ideas (cf. Hall 1989). Shortly after the war, however, economic policy-makers went even further. Not only did they take growth as their objective, they also began to construe the problem of securing growth as one that entailed a fundamental ‘modernization’ of the economy. Across Europe, governments became acutely conscious of the ‘defects’ in industrial structure inherited from the inter-war years. French concerns about the malthusianisme or self-defeating rivalries of small family ﬁrms were typical; but the analysts of many nations began to argue that their ﬁrms were too small, technologically unsophisticated, or inward-looking to compete effectively (cf. Baum 1958; Shonﬁeld 1965; Landes 1951; Earle 1951). Their core point was that economic growth would require something other than ‘more of the same’: it would demand a transformation of the economy marked by the reallocation of resources away from traditional sectors toward those capable of higher rates of growth coupled to extensive changes in ﬁrm strategy (Wells 1991). For most of the European nations, this perspective was deeply rooted in issues of international integration. All saw that the economic power of the USA had been instrumental to victory in the Second World War, and it was widely believed that national power in the post-war world would rest on industrial strength. Accordingly, for the French, Germans, and eventually even the British, domestic economic modernization was dictated by raisons d'état. The ﬁrst international organization to represent this merger of domestic and international concerns was the European Coal and Steel Community,

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but, once the Treaty of Rome was signed, what had been an aspiration became necessity. As tariff barriers declined among the member states of the new Common Market, ﬁrms that failed to modernize could expect to perish in the face of international competition. In the eyes of Jean Monnet (1976) and many others, effective domestic modernization was seen as the indispensible concomitant of international economic integration. International competition, then, loomed large in the minds of economic policy-makers, but competition was seen during this period in a particular light, perhaps best described as ‘neo-mercantilist’. Nations rather than ﬁrms were viewed as the principal entities locked in competition with one another for higher rates of growth and larger shares of the international market. The outcome was believed to be crucial for the geo-political standing of a nation and governments were said to be responsible for the outcome. British concerns about ‘economic decline’, French ambitions for ‘national grandeur’, and German pride in ‘modell deutschland’ all reﬂected this perspective (cf. Pollard 1982; Elbaum and Lazonick 1986; Berger 1981; Markovits 1982). If this was the economic problematic of the era, what did policy-makers believe they should do to meet its challenges? As usual, one could ﬁnd a range of views across nations. But what is distinctive about this era is the number of policymakers and analysts devoted to the notion that governments should intervene actively in the economy to enforce rationalization on industry, to enhance the technological capabilities of enterprise, and to shift resources among economic sectors (Cohen 1977; Zysman 1977; Budd 1978; Sacks 1980; Holmes and Estrin 1988; Hart 1992). Of course, such views privileged the industrial sector over services or agriculture and tended to associate competitiveness with economies of scale. Hence, sectoral reorganization schemes encouraged mergers to create what de Gaulle termed ‘national champions’ on world markets (cf. Cohen 1977; Holland 1978; Shonﬁeld 1965). After initial efforts to develop strength in basic industries, the goal was to concentrate resources in high-value-added sectors where ‘advanced’ economies were said to have advantages. In short, the dominant economic approach of the 1950s and 1960s endorsed active demand management in the macro-economic sphere and interventionist industrial policy on the supply side, designed to shift resources into fastgrowing sectors and to enhance the market share of national ﬁrms. This put a premium on the ability of public ofﬁcials to devise effective strategies for sectors or individual enterprises, to identify technologies that offered the greatest future returns, to know which ﬁrms or sectors were most likely to succeed on world markets, and, above all, to induce ﬁrms to behave in line with the plans made for them while resisting pleas for aid from declining sectors. The analyses developed by comparative political economists during the 1960s and 1970s corresponded closely to this problematic. When called upon

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to identify the conditions crucial to successful economic policy, they emphasized the technical expertise of economic policy-makers, their familiarity with the needs of industry, their inclinations toward policy activism, and the levers at their disposal for persuading ﬁrms to adhere to the chosen strategies (cf. Balogh 1959; Zysman 1977; Hayward 1975). Shonﬁeld (1965) speaks elegantly of economic outcomes that depend on the ‘will and skill’ of policy-makers. Accordingly, early efforts to identify the institutional features of a nation most conducive to economic success stressed ones that bore on the training of ofﬁcials and their instruments for mobilizing consent among industrialists. The emphasis was on the power of public ofﬁcials vis-à-vis the private sector (cf. Blank 1978; Sacks 1980; Nordlinger 1981; Evans et al. 1984). Katzenstein (1978a) developed an ambitious comparison of ‘strong’ and ‘weak’ states based on the relative ‘centralization’ of the state and society, and Zysman (1983) showed how a nation's ﬁnancial system could affect the capacity of public ofﬁcials to channel funds to favoured enterprises. In general, the result was a literature that associated the concentration of power within the state with the capacity to conduct effective economic policy. The heroic nations in such analyses were France and Japan. Both had highly trained ofﬁcials socialized to assume strategic responsibility for the direction of industry. Both had powerful ministries dedicated to modernizing the economy, supported by a range of ancillary agencies, such as the modernization commissions of the French Plan (Hayward 1967). Both attained rates of growth between 1950 and 1975 that were the envy of the western world and, however rashly, that achievement was often attributed to the capacities of the French and Japanese states (Johnson 1982; Shonﬁeld 1965; cf. Carre et al. 1972; McArthur and Scott 1969). In such tales, Britain, by contrast, was perennially presented as the loser, with lower rates of growth that ultimately gave rise to a pervasive sense of national decline (cf. Shonﬁeld 1958; Shanks 1960; Pollard 1982). British governments were said to have depended too heavily on demand management, hobbled by an overvalued exchange rate, in lieu of enforcing modernization on ageing industries. Their few attempts at sectoral reorganization and the experiment with a National Economic Development Council (NEDC) were widely considered failures (cf. Blank 1978; Sacks 1980; Shonﬁeld 1965: ch. 8; Leruez 1975; Budd 1978). These outcomes were often blamed on the structure of the British state, dominated by a Treasury ﬁxated on control of public spending, dedicated to the preservation of sterling on behalf of a ﬁnancial entrepôt, and manned by civil servants without the technical training or strategic vision for industrial intervention of their French and Japanese counterparts (Shonﬁeld 1965; Balogh 1959; Ingham 1984; Blank 1978; Richardson and Jordan, 1979; Cox 1986). Britain was said to have a ‘weak state’ (cf. Katzenstein 1978a; Badie and Birnbaum 1979; Sacks 1980).

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In sum, the era of competitive modernization gave rise to an inﬂuential literature in comparative political economy that sought to identify the institutional conditions behind economic success and associated them with dirigiste industrial policy, technically trained public ofﬁcials, and the ‘strength’ of the state vis-à-vis producer groups.

The Era of Distributive Conict By the early 1970s, the era of competitive modernization had given way to a period marked by high levels of distributive conﬂict which was to last into the 1980s. The intensiﬁcation of distributive conﬂict in the late 1960s had multiple roots (Crouch and Pizzorno 1978). In some economies, the very success of full employment policies strengthened trade unions, whose demands began to fuel a wage spiral. At the same time, the public began to seek more resources for public infrastructure and social programmes that raised levels of public spending, urged on by a generation born of post-war afﬂuence (Inglehart 1977; Beer 1982). With the collapse of the Bretton Woods system in 1971, the ﬁscal and monetary discipline of a ﬁxed-exchange-rate regime dissolved; and the world's money supply increased, as the USA struggling with distributive dilemmas of its own tried to fund the Great Society and the Vietnam War simultaneously. What was essentially distributive conﬂict between the developed and developing world saw commodity prices rise, culminating in the formation of OPEC and the massive oil-price increases of the 1970s that brought ‘stagﬂation’ to Western Europe (Salant 1977; OECD 1977). After decades of growth, popular expectations had risen steadily and by the 1970s, when the European economies became sluggish, demand whether for wages, subsidies, or social spending began to outstrip supply. In some sense, the standard institutional mechanisms for the authoritative allocation of resources became inadequate to the task (cf. Goldthorpe 1978; Crozier et al. 1975; Beer 1982). Even the European Community suffered from distributive conﬂict in this period. Despite the Luxembourg compromise (or perhaps because of its terms), progress toward the harmonization of regulations was slow (Hoffmann 1982; Dinan 1994: ch. 3). The EC had become a modest customs union supervising a vast programme of agricultural support, apparently impervious to reform. Although the accession of Britain and Denmark in 1973 was a step forward, it proved a Pyrrhic victory when Britain resisted further political integration, demanding better ﬁnancial terms for its membership and ultimately blocking all business until a compromise was reached in 1984. The efforts of the Community to replace Bretton Woods with a new system of linked exchange rates labelled the ‘snake’ foundered when the member

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governments could not co-ordinate their economic policies, and the Community was soon said to be suffering from ‘eurosclerosis’ (Dyson 1994). Rising rates of inﬂation were the economic manifestation of distributive conﬂict, as governments shied away from the monetary rigour and ﬁscal sacriﬁce required to resist them, and the economic problematic of most European governments shifted from one focused on economic growth towards one that saw inﬂation as the pre-eminent problem facing the economy. Unemployment crept up as well but in a setting where inﬂation remained the priority (cf. Hirsch and Goldthorpe 1978; Lindberg and Maier 1985). In this context, prevailing conceptions of what policy-makers should do to enhance economic performance also shifted. In more open economies, Keynesian techniques began to seem ineffective against unemployment. Economic policies again emphasized government intervention but aimed now at the resolution of distributive disputes rather than at growth. The most prominent of these policies were government-sponsored efforts to secure acceptable wage agreements. During the late 1960s and 1970s, a host of governments began to intervene actively in wage negotiations, seeking some form of ‘concertation’ among employers and workers. Even governments that had long relied on bargaining between peak associations for wage co-ordination began to play a more active role in such negotiations (Berger 1982; Goldthorpe 1984). In Germany, where the state had stood aloof from sectoral negotiations, an SPD government encouraged tripartite wage concertation (Markovits 1982). Sweden's long-standing process of peak-level bargaining between the LO and SAF was shaken up by government proposals for ‘wage-earner funds’ that would gradually transfer control over industry to the workforce (Pontusson 1992). In Italy, the ‘hot autumn’ of 1969 and successive wildcat strikes gave way to a ‘historic compromise’ between the Communist Party and the Christian Democrats that married wage concertation to concessions on social spending (Hellman 1988). Successive British governments tried to impose an incomes policy on the trade unions, culminating in a ‘social contract’ between the Trades Union Congress and Labour government that ended in 1979 with a ‘winter of discontent’. Comparative political economists responded to these developments by focusing their attention on distributive problems and the ‘neo-corporatist’ practices whereby governments grant policy concessions or authority to organized producer groups in return for their cooperation (cf. Schmitter and Lehmbruch 1979; Katzenstein 1985a; Berger 1982; Goldthorpe 1984). They placed special emphasis on wage agreements designed to reduce inﬂation and classiﬁed nations as more or less ‘neo-corporatist’ according to their capacities for wage co-ordination. Neo-corporatist arrangements were said to be

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able to shift the Phillips-curve, offering lower levels of inﬂation and unemployment simultaneously (Cameron 1984; Calmfors and Drifﬁll 1988; Hicks 1988). The institutional correlates of economic success came to be seen, therefore, as those that made neo-corporatist bargaining easier. Foremost among these was the organization of the union movement, although employers' associations ﬁgured in later analyses (cf. Calmfors and Drifﬁll 1988; Goldthorpe 1984; Soskice 1990a). More centralized or concentrated trade union movements were said to conduce toward better outcomes, although some analysts also made cogent arguments for additional conditions (cf. Golden 1993). Lange and Garrett (1989; Alvarez et al. 1991; Garrett 1998) suggested that centralized trade unions would produce favorable outcomes only where the partisan complexion of the government was social democratic. Scharpf (1984, 1987) argued that bargaining between the government and trade unions would be more effective where the government was committed to Keynesian policies and controlled the instruments of both ﬁscal and monetary policy. One implication was that effective wage coordination would be inhibited by the presence of a central bank independent of the government (cf. Iversen et al. 1999; Cukierman 1992). Neo-corporatist analyses continued to stress that nations were locked in international competition with one another. However, in keeping with the high levels of integration now present in Western Europe, an emphasis on adjusting to economic openness replaced the neo-mercantilist overtones of an earlier literature. Many observed that small, open economies tended to have neo-corporatist arrangements, and economic success was now deﬁned in terms of the capacity of a nation to adjust to ﬂuctuations in the international economy (cf. Cameron 1978; Katzenstein 1985b). Accordingly, if the large and relatively protectionist nations of France and Japan had been the central models for studies of competitive modernization, neo-corporatist analysts took the small open economies of Northern Europe as their templates. Switzerland, Austria, Belgium, the Netherlands and Scandinavia were presented as success stories (Lehmbruch and Schmitter 1982; Katzenstein 1985b). Britain was again identiﬁed as a troubled economy, in this case because the organization of its trade unions made wage concertation difﬁcult (cf. Regini 1984; Fulcher 1991). From the experience of the 1970s, then, came a second literature seeking to identify the institutional conditions and policies behind economic success. Where analyses of competitive modernization had stressed activist industrial policy and the structure of the state, however, neo-corporatist analyses identiﬁed the organization of the trade-union movement and the kind of political exchanges it could make with employers and the state as the key variables (cf. Pizzorno 1978).

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The Era of Globalization By the early 1980s, many of the neo-corporatist experiments of the 1970s had foundered, especially in countries without an appropriate institutional underlay. Even though they reduced rates of inﬂation, many also inspired a backlash against the levels of government intervention they entailed. Policy activism had been popular when growth rates were high during the 1960s, but efforts to restrain wages when economies were growing at barely half their historic rates proved unpopular in political terms. As a result, many electorates reacted against social-democratic governments in favour of neo-liberal attempts to reduce the role of the state in the economy and to expand the role of market mechanisms. Neo-liberalism acquired greater political force in the Anglo-American democracies than elsewhere, but it inspired some movement across the continent during the 1980s, as the Christian Democrats argued for a new ‘Wende’ in Germany and the French socialists began to support privatization and deregulation (Hall 1985; Piven 1992; King 1987). Behind these trends lay continuing concerns about inﬂation and the apparent failure of traditional Keynesian policies to stem rates of unemployment that edged above 10 percent during the 1980s (Hall 1985; Crouch 1979). For some years, macro-economic policy had been targeted on unemployment, while inﬂation was addressed with supply-side measures such as incomes policies. However, most governments reversed this stance during the 1980s, aiming macroeconomic policy at inﬂation and using supply-side measures against unemployment (cf. Hall 1990). Accordingly, the emphasis of supplyside policy also began to shift from the industrial subsidies used for competitive modernization toward manpower policies designed to create jobs and increase the skill-levels of the workforce. By the end of the decade, many European governments were spending 5 percent of GDP on such programs (Levy 1999). In addition, measures to privatize public enterprise and deregulate markets, including most notably the ﬁnancial market, were adopted across Europe (Vogel 1996). Developments in the European Community mirrored these trends. The domestic ‘move to the market’ was extended to the international sphere in 1985 when the EC initiated a Single Europe Act mandating the creation of a single continental market by 1992 (Moravcsik 1998; Dinan 1994). Accompanying it were measures to dismantle barriers to trade, to strengthen the Community's competition policy, and to toughen its opposition to national industrial subsidies. With these steps, the EC put market-based integration on a faster track than political integration, accepting ‘qualiﬁed majority voting’ only in measures that pertained to the single market.

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The juridical complement was the 1979 ‘Cassis de Dijon’ decision of the European Court of Justice endorsing ‘mutual recognition’ among national regulatory systems. After years of efforts to harmonize national regulations, this ushered in a new era when competitive market pressure was to become more important than international negotiation in determining the character of national regulation (Alter and Meunier-Aitsahalia 1994; Nicolaides 1993). Although the pressures for competitive deregulation unleashed by these developments were not always as strong as expected, their effect was to privilege ‘negative’ over ‘positive’ integration (cf. Scharpf 1999; Streeck 1995). As the European governments exposed their economies to greater pressure from foreign ﬁrms, they also dismantled the institutional pillars on which interventionist policies had once rested. Financial deregulation, including both the abandonment of exchange controls and the removal of domestic controls, undercut the ability of states to inﬂuence the ﬂow of funds in their ﬁnancial systems, rendered them more vulnerable to exchange-rate speculation, and exposed more national ﬁrms to the demands of international ﬁnancial markets (cf. Notermans 1993; Forsyth and Notermans 1997; Vogel 1996; Cerny 1995). One effect was to put enough pressure on the European Monetary System to encourage the establishment of a European Monetary Union in 1999 (Eichengreen 1994). By turning monetary policy over to a European central bank oriented to the control of inﬂation and independent of political control, this union effectively sealed the shift away from the use of macro-economic policy as a tool against unemployment. Thus, its member governments have come under increasing pressure to render their labour markets more ﬂexible or to ﬁnd new supply-side policies capable of reducing unemployment. By the early 1990s, unemployment had reached 12 per cent in the EU as a whole and become the central concern for most European governments. However, signiﬁcant shifts in context have now framed the problem in new terms. With the success of the single market, the ﬂows of goods and capital across national borders increased, and many European ﬁrms have become transnational as they position themselves to compete in a continental market. Simultaneously, the collapse of communism has opened new markets in Eastern Europe, while rapid growth in the newly industrializing countries of East Asia and Latin America leads many European ﬁrms to consider expansion overseas. As a result, the terms in which European governments deﬁne the principal challenges facing their economies have shifted once again towards ones that stress the importance of maintaining a national environment that ﬁrms will regard as internationally competitive. To an increasing extent, unemployment is now viewed as a function of the capacity of the domestic economy to attract ﬁrms, as Germans worry about the Standort-problem, the French about mondialisation, and the British about globalization (cf. Naschold et al. 1997; Berger 1995; Giddens 1999).

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Governments have long been preoccupied with investment, since it creates jobs, but inward foreign investment has now joined domestic investment as an important concern. Nations have become increasingly worried about whether their regulatory regimes and labour-market conditions will attract and retain the ﬁrms that create jobs. Once again, national economies are said to be in competition with each other, but the terms of that competition have shifted. In contrast to an earlier era when American investment was seen as a threat to Europe, policy is now oriented towards the creation of conditions that will attract such investment, and ﬁrms have assumed a new primacy in this international competition as both the vehicles for it and the arbiters of success within it (cf. Servan-Schreiber 1969). In this context, economic policy-making is increasingly a regulatory exercise. The emphasis of policy has shifted from the determination of the macroeconomic stance or the management of modernization towards concern for the attractiveness and efﬁciency of the regulatory regimes that govern economic behaviour. Deregulation has become an important watchword of policy-making and public debate often centres around the form that regulation in ﬁnancial, labour, or product markets should take (cf. Vogel 1996; Trumbull 1999; Vickers and Wright 1989). Markets have assumed greater centrality in these discussions, as policy-makers depend more heavily on them for the adjustment to economic shocks that might once have been accomplished by the activist macro-economic or industrial policies that European institutions now rule out.

Towards a New Economic Perspective These developments in economic policy-making also pose a challenge to comparative political economists. The analytical frameworks devised for assessing national patterns of policy during the eras of competitive modernization and distributive conﬂict no longer seem adequate for understanding the policies now being pursued in Europe. New approaches are needed to understand how nations cope with the problems of globalization and to explain crossnational variation in such efforts (cf. Albert 1992; Sabel 1995; Hollingsworth et al. 1994; Hollingsworth and Bayer 1997). Among the frameworks being developed to meet this challenge, the most promising is one I will label a ‘varieties of capitalism’ approach.42 Initially inspired by the work of Soskice (1990a, 1990b, 1991), it has been reﬁned and extended by a number of scholars (Wood 1997; Casper 1997; Kitschelt et al. 1999; Iversen et al. 1999; Hall and Soskice, forthcoming). What is of most

42

For a more extensive review of other approaches see Hall 1999.

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interest here is that this framework provides a new perspective on economic policy-making. In order to develop that perspective, I will brieﬂy outline the main features of the underlying framework, explain why it is useful for understanding economic policy-making, and compare its perspective on policymaking with preceding approaches. Using the new economics of organization, ‘varieties of capitalism’ analysts interpret the central problems of the economy as a set of co-ordination problems facing ﬁrms in the spheres of industrial relations, ﬁnance, skill acquisition, research and development, as well as client and supplier relations. In contrast to earlier analyses that emphasized the role of trade unions or the state in the economy, this approach sees ﬁrms as the central economic actors, bearing the burden of adjustment to changes in the international environment (cf. Thelen 1995). Accordingly, it focuses on the institutions that allow ﬁrms to resolve these coordination problems. The core distinction is between nations that rely primarily on market mechanisms for co-ordination, labelled ‘liberal’ market economies, and nations that make greater use of non-market institutions, such as business associations, patterns of cross-shareholding, and parapublic agencies, for these purposes, often termed ‘coordinated’ or ‘organized’ market economies'. Britain and the United States provide paradigmatic cases of the former, while Germany and Japan exemplify organized market economies (cf. Soskice 1991; Aoki 1990; Hall and Soskice forthcoming). Although the ‘varieties of capitalism’ approach has a pedigree in neocorporatist analyses, it has several advantages for understanding economic policy in an era of globalization. Its emphasis on ﬁrms ﬁts the centrality they have assumed in problems of economic adjustment; and its stress on business associations corresponds to their growing role in European affairs (cf. Sandholtz and Zysman 1989; Streeck and Schmitter 1985). Moreover, this analytical framework provides microfoundations for a theory of comparative institutional advantage that is useful for understanding national responses to globalization (cf. Hall 1997; Zysman 1996). It observes that the institutional framework available for coordinating the activities of ﬁrms in each nation confers distinctive competitive advantages on ﬁrms that aggregate into comparative national advantages in particular kinds of endeavours. Firms in organized market economies, for instance, tend to be better at quality control and securing incremental product or process innovation, while those in liberal market economies tend to be better at radical innovation, cost competition, and shifting resources across sectors (Soskice 1994, 1999). These advantages are reﬂected in patent data and systematic variation in corporate strategy across nations (Hall and Soskice forthcoming; Lehrer 1997; Soskice 1999; Knetter 1989). The implications for economic policy-making are important. To beneﬁt from rising levels of international trade, a nation will want to preserve and

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enhance its comparative national advantages. If these derive in large measure from the institutional mechanisms available for co-ordinating corporate activities, both ﬁrms and governments will want to strengthen such mechanisms. Accordingly, governments in liberal market economies should want to sharpen the market incentives on which their ﬁrms rely for co-ordination, while the governments of organized market economies will want to preserve the institutions for non-market co-ordination that are crucial to their comparative national advantages. This framework can be used to explain why some nations have pursued deregulatory policies in recent years, while others have been much slower to deregulate. It predicts widespread deregulation in liberal market economies, such as those of Britain, the United States, Canada, Australia, and New Zealand, of precisely the sort seen there, and more widespread resistance to deregulation in the organized market economies of Northern Europe and Japan (Soskice 1999). The theory corresponds well to recent developments. As Wood (1997) and Thelen (1999) have shown, while business interests have pressed for deregulatory policies in the Anglo-American economies, they have tended to resist such measures in the organized market economies, and governments have been responsive to them. The ‘varieties of capitalism’ approach also provides a perspective on the general process of economic policy-making that is distinctive. Especially on the supply side, policy-making is often seen as a process in which the central problem facing policy-makers is to identify the direction in which ﬁrms or sectors should move and to ﬁnd ways of pressuring the relevant companies to take on the corresponding projects. This approach puts a high premium on the technical expertise of policy-makers, their capacity to pick winning industrial strategies, and the instruments at their disposal for securing the acquiescence of ﬁrms (cf. Shonﬁeld 1965). However, the ‘varieties of capitalism’ perspective sees economic policymaking quite differently, not as a process of enforcing sectoral rationalization or of getting new projects under way, but as one of enabling ﬁrms to coordinate more effectively with each other, on the premiss that better ﬁrm-level co-ordination will result in superior economic performance. The goal is higher levels of economic co-ordination, but it is ‘decentralized coordination’ that must be secured, one in which ﬁrms devising their own strategies coordinate in multiple arenas on equilibria that provide higher levels of output (cf. Culpepper 1996, 1998; Finegold and Culpepper 1998).43 The distinction is analogous to but broader than one once drawn between ‘mission-oriented’ and ‘diffusion-oriented’ industrial policies (Ergas 1987; Ziegler 1997).

43

My discussion of this problem has been deeply inﬂuenced by the work of Pepper Culpepper on the reform of vocational training schemes in France and Germany (1996; 1998).

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There is good and bad news for economic policy-makers here. On the one hand, this problematic reduces the pressure on government ofﬁcials to identify the most suitable ﬁrm strategies. On the other hand, inducing ﬁrms to coordinate better with one another can be more difﬁcult than enforcing a precribed strategy on them. To some extent, the task can be accomplished by strengthening the institutional mechanisms available to ﬁrms for coordinating their endeavor. That usually entails strengthening market mechanisms in a liberal market economy and non-market institutions in an organized market economy. However, in choosing equilibria on which to co-ordinate, ﬁrms respond to a range of factors beyond institutional incentives. Many of the relevant outcomes are realizable only if multiple actors agree on a common set of strategies, and incentive structures alone rarely guarantee this. A ﬁrm's decision to co-operate will also be based on the information available about possible returns, the credibility of the commitments of other actors to participate, and the reputations those actors have built up through experience. As Culpepper (1998) shows, better ‘decentralized coordination’ cannot simply be legislated. Where it demands new modes of operating, institutional changes alone will not be enough to induce the relevant shifts in behaviour. Effective results may depend on the pre-existing organization of producers and on techniques for altering ﬁrms' experiences over the short run so that more of them will coordinate on superior equilibria in the long run. The implications of this analysis for the relationship between effective policy-making and the structure of the state are striking. As we have seen, the literature on competitive modernization tended to associate effective economic policymaking with a highly centralized state insulated from social pressure (cf. Katzenstein 1978a; Nordlinger 1981).44 From a ‘varieties of capitalism’ perspective, however, whether ‘centralization’ will be an asset depends on the structure of the economy. In liberal market economies, where economic coordination is generally enhanced by sharpening market mechanisms, a centralized state may improve the government's capacity to undertake such sharpening, by providing it with autonomy from the producer groups that resist such measures in order to retain existing rents. At a minimum, centralization of the state does not seem to inhibit efforts at deregulation of a sort conducive to better performance in liberal market economies. The performance of organized market economies, however, depends on the presence of institutions for non-market co-ordination, such as vocational training programmes and research and development schemes that are supervised by producer groups and draw resources for this purpose from the state

44

By ‘centralization’ here, I refer to the degree to which power over economic policy-making is concentrated, which turns on the centralization of formal political institutions but may extend beyond it.

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(cf. Katzenstein 1987; Finegold and Soskice 1988; Ziegler 1997). In effect, these groups form ‘implicit contracts’ with the government whereby they exchange information and supervision in return for inﬂuence over policy and resources that strengthen their position vis-à-vis their members (Wood 1997). Of course, the willingness of producer groups to forge such informal contracts depends on their conﬁdence that successive governments will adhere to their side of the bargain, a sensitive issue given that governments have vast power, can readily break these agreements, and may then use the information they have acquired against their former interlocutors. Accordingly, implicit contracts of this sort are only feasible where the commitment of the government to abide by them is highly credible. Many factors go into establishing a government's credibility, including an appropriate track record, but here the structure of the state may also be important. Where the state is structured with multiple veto points that provide a limited number of producer groups with substantial inﬂuence over the subsequent course of policy, the government's commitment to such contracts will be more credible because these producer groups know that they can use their inﬂuence to punish it for any deviation from them. Accordingly, organized market economies may function better with states that are decentralized or structured so as to provide a few key producer groups with direct inﬂuence over the course of policy (Wood 1997).45 In short, the ‘varieties of capitalism’ approach sheds new light on the institutional conditions underpinning effective policy-making. The latter may well depend on the congruence between the structure of the state and the structure of the economy. Indeed, over time, a speciﬁc state structure may facilitate the construction of a particular kind of economy. It may not be coincidental that so many deregulatory initiatives have come from nations with Westminster systems of government, while so many organized market economies are supervised by consociational or quasicorporatist political regimes. Finally, in contrast to preceding approaches that often fastened on particular national models, the ‘varieties of capitalism’ approach does not identify a single route to economic success. It implies that high levels of aggregate economic performance can be secured by both liberal and organized market economies, provided appropriate policies are pursued in them. However, it does expect to ﬁnd different outcomes with respect to patterns of income distribution, which should be less egalitarian in liberal market economies by

45

The argument in the preceding paragraphs is largely drawn from the path-breaking work of Stewart Wood (1997) who also observes that the failure of successive British governments to devise effective vocational training schemes or to implement plans for sectoral rationalization may be attributable, not to the weakness of the levers available to British governments as many have contended, but to the very centralization and power of the British state, which has rendered producer groups reluctant to share information or form implicit contracts with it.

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virtue of the more ﬂuid labour-market arrangements there, and patterns of innovation, where each kind of economy has comparative advantages in different kinds of endeavours (Soskice 1994). Thus, this framework ﬁts an era that has seen signiﬁcant economic accomplishment in Britain and the USA as well as in continental Europe.

The Implications for Convergence in the European Union The contemporary era is one marked by unprecedented levels of economic integration that pose new dilemmas for economic policy-makers in the European Union (cf. Kassim and Menon 1996). Levels of unemployment increased in the run-up to monetary union and have remained stubbornly high, while the integration process has removed many of the instruments national policy-makers once used to tackle them (cf. Hall 2000). The neo-mercantilist policies employed for competitive modernization are largely ruled out by EU regulations that restrict industrial subsidies and by ﬁnancial reforms that reduce the inﬂuence of public ofﬁcials over ﬂows of funds in the ﬁnancial system.46 Keynesian-style reﬂations have also become less feasible: their effects leak rapidly out of interdependent economies and control over monetary policy, which must be congruent if ﬁscal policy is to be effective, now lies in the hands of a European central bank independent of political control and oriented primarily to inﬂation. Since the member states of the monetary union can no longer use national monetary or exchange-rate policies to adjust to economic shocks, they have come under increasing pressure to ﬁnd new ways of doing so. Many analysts argue that their only recourse will be to render labour markets more ﬂexible and most believe that unemployment will have to be addressed by measures on the supply side of the economy. Accordingly, the prominent debates today concern what kind of supply-side policies are likely to be effective against unemployment. Some argue that employment protection and social beneﬁts should be curtailed in order to encourage labour market adjustment. Others advocate active manpower policies designed to reskill the workforce and subsidize employment. Another group suggests various forms of work-sharing based on shorter work-weeks or more part-time employment (Snower and de la Dehesa 1997). Virtually all the European nations are experimenting with such policies. One of the central issues in comparative political economy today is whether these developments will erode the distinctiveness of national models of capitalism, leading to convergence across nations on a common set of economic

46

The sums devoted to industry under the programmes of the EC itself, such as ESPRIT and RACE, are also relatively small and widely diffused among the participants (cf. Sharp 1986, 1993).

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policies and institutions (cf. Berger and Dore 1996; Keohane and Milner 1996; Boyer and Drache 1996; Crouch and Streeck 1997). There are at least three bases for believing that convergence will be the likely outcome. One view is built on the assumption that more ﬂexible markets provide the best means for adjusting to economic shocks (cf. OECD 1995). Therefore, it contends that the member states of the EU will move on efﬁciency grounds towards a common market model, as they seek new adjustment mechanisms to replace those lost in the move to monetary union. A second view observes that the EU, which has assumed an increasingly important role in policy-making, may adopt directives that will induce convergence in the regulatory regimes of its member states and the distinctive economic institutions they support. The EU has already passed many such directives in order to put competition in the single market on a common footing, and more may come (cf. Wallace et al. 1983; Majone 1996). Finally, even where the EU has abandoned formal harmonization, some argue that processes of competitive deregulation in the single market will produce convergence in national regulations and institutions. The premiss here is that ﬁrms will demand domestic deregulation in order to maintain their competitive position in more integrated international markets, backing up those demands with threats to move production elsewhere if deregulation is not forthcoming, and that governments will accede (cf. Streeck 1995). Each of these perspectives points to important developments that are likely to render the regulatory regimes of Europe more similar over time. However, the ‘varieties of capitalism’ approach to comparative political economy challenges each view in some fundamental ways and suggests dimensions to these dynamics that may ultimately limit the movement towards convergence. Against those who expect the demand for better adjustment mechanisms to produce convergence on a market model, the ‘varieties of capitalism’ perspective points out that there is more than one way to secure economic ﬂexibility. Liberal market economies use market mechanisms to adjust to economic shocks with considerable success. But many organized market economies have had equal, if not greater, success using non-market institutions to manage adjustment. Their elaborate systems for wage co-ordination, upskilling, and absorbing excess labour provide modes of economic adjustment that are often negotiated rather than automatic but may be effective for meeting some of the challenges facing Europe today. There is evidence for this in the Netherlands, Ireland, and Southern Europe, where tripartite bargaining between the government, employers, and trade unions is yielding agreements that have moderated wages, reduced ﬁscal deﬁcits, and increased employment (Visser and Hemerijck 1997; Rhodes 1997; Perez 1999). These negotiations take advantage of institutional arrangements already present in such economies but are distinguished from

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earlier efforts by the way they link wage moderation to shifts in labour regulations and social beneﬁts. Here, forms of negotiation once aimed primarily at inﬂation are being used to address issues of employment and national competitiveness. Although far from a panacea, they suggest that some European economies may have means other than market mechanisms for resolving their adjustment problems. The ‘varieties of capitalism’ approach also casts doubt on the view that the EU will enforce regulatory convergence on its member states. To date, most efforts to identify the interests that drive EU policy-making focus on those of EU ofﬁcials in further integration, general economic conditions in its member states, or the interests of major economic sectors vis-à-vis integration (Pierson 1996; Ross 1995; Sandholtz and Zysman 1989; Moravcsik 1998; Frieden 1991). Because such analyses stress types of interests commonly found in many member states, they tend to emphasize the receptivity of the Union to new directives, regardless of whether these entail convergence in national regulations or institutions. However, the ‘varieties of capitalism’ approach provides another way of interpreting the interests of the member states that control policy-making in the EU. It suggests that the stance they adopt towards new regulatory initiatives may be inﬂuenced by judgements about whether a proposed initiative will sustain or undermine the comparative institutional advantages of the nation's economy. One of the principal contentions of this approach is that nations derive distinctive comparative advantages from the institutional frameworks of their economies, which are underpinned by national regulatory regimes (cf. Streeck 1992). Accordingly, governments should be inclined to support regulatory initiatives in the EU only when the latter do not threaten their nation's institutional infrastructure or the regulatory regimes that sustain it. Fioretos (1998; forthcoming) has already applied this perspective to the positions taken by France, Britain, Sweden, and Germany in the negotiations that produced the Maastricht Treaty. He argues that many of the conﬂicts Britain had with its partners, leading to opt-outs from the Social Charter and monetary union, can be traced to British efforts to protect the institutions of its liberal market economy. Similarly, the uneasy compromises on industrial policy reached at that summit seem to follow from the demands of nations seeking to preserve very different institutional infrastructures and the distinctive relations between ﬁrms and public authorities that they demand. There is scope for applying this approach to a wide range of issues. Germany's reluctance to accept more extensive ﬁnancial deregulation, for instance, may derive not simply from a desire to maintain the rents of its ﬁnancial sector but from a concern to preserve the monitoring systems present in the house-bank and cross-shareholding relationships of that sector

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that are crucial to the provision of long-term capital there. After all, the corporate strategies of many German ﬁrms are based on the availability of such capital (cf. Soskice 1991; Story and Walter 1997). Even some of the positions taken by member states toward the development of EU institutions may be explicable in these terms. I have argued that the success of a national economy seems to depend, in some measure, on whether it is supervised by a state with a structure appropriate for supplying the kind of economic policies that sustain such an economy. As the EU takes on additional economic responsibilities, the member states may be concerned to ensure that the agencies and techniques adopted for administering them are congruent with the needs of their own economies. Thus, the principal actors in organized market economies may seek institutions conducive to the formation of implicit contracts between public authorities and sectoral associations, while those in liberal market economies should want to forestall agencies interventionist enough to interfere with the operation of market mechanisms. Such considerations could never fully explain the design of EU institutions but they may often ﬁgure in the process (cf. Schmidt 1997; Pollack 1997). In sum, the ‘varieties of capitalism’ approach generates a conception of national economic interest, rooted in the organization of the political economy, that can explain some of the positions taken by governments and producer groups in European negotiations. Moreover, in contrast to alternative formulations of national economic interest, this one implies that the member states of the EU will have difﬁculty agreeing on regulations conducive to convergence in the economic sphere. Since all the member nations are market economies, they will ﬁnd some initiatives on which to agree, but measures that enforce high levels of homogeneity on national institutional infrastructures should be harder to secure.47 Even if EU directives do not result in the convergence of national regulations and institutions, some argue that processes of competitive deregulation generated by the single market will. However, the ‘varieties of capitalism’ perspective challenges this view as well, offering an alternative more inclined towards the persistence of national differences. The premiss behind most accounts of competitive deregulation is that ﬁrms confronting more intense international competition will press governments to deregulate in order to enhance their own competitive position and will prevail because in a more open economy they can threaten to move production to less regulated sites if such policies are not forthcoming. However, the ‘varieties of capitalism’ perspective

47

Of course, much depends here, as it always does with such theories, on whether governments perceive their national interests accurately and are capable of defending them in a transnational context. Regulatory initiatives in the EU often represent complex compromises among national interests that can often have unintended consequences (cf. Pierson 1996).

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discounts the contention that all ﬁrms are interested in deregulation or prepared to move to achieve it. Instead, it ﬁnds systematic differences in corporate strategies between organized market economies and liberal market economies, because ﬁrms build strategies that take advantage of the distinctive institutional frameworks available in each. In the face of more intense international competition, ﬁrms will want to enhance their competitive advantages, and this often entails reinforcing national institutional frameworks. Accordingly, ﬁrms in liberal market economies may well demand deregulation because it sharpens the market mechanisms with which they co-ordinate their endeavours. In organized market economies, however, many ﬁrms will resist deregulation in favour of preserving the regulatory regimes that sustain institutions for non-market coordination, because their own competitive advantages depend on such institutions. The pressure to deregulate that ﬁrms bring to bear on governments may well be substantial in liberal market economies because the corporate strategies of ﬁrms there often privilege the kind of cost competition that makes it feasible for them to shift production to off-shore sites where cheaper labour is available. By contrast, more of the activities of ﬁrms in organized market economies depend on the presence of the kind of dense institutional networks that are rarely found in foreign nations offering cheaper labour. Accordingly, the ability of ﬁrms to threaten exit may be lower in organized than liberal market economies. The implication is that the political pressure to deregulate should be strong in liberal market economies but much weaker in organized market economies, and that is precisely what studies by Thelen (1999) and Wood (1997) have found. In short, in lieu of convergence, this approach predicts a bifurcated response to international economic integration, characterized by widespread deregulation in liberal market economies and less extensive deregulation in the organized market economies, and that is precisely what occurred during the 1980s and 1990s (cf. Soskice 1999). There seem to be signiﬁcant counterpressures acting to preserve nationally distinctive institutions and regulatory regimes in the single European market. However, the ‘varieties of capitalism’ perspective also identiﬁes some points of fragility that may render organized market economies vulnerable to international market forces in the coming years. Many follow from the concept of ‘institutional complementarities’ developed by this approach. It suggests that the institutions in one sphere of the economy may be ‘complementary’ to those in other spheres, in the sense that the presence of some institutions may render others more feasible or proﬁtable (cf. Milgrom and Roberts 1990; Aoki 1994; Hall and Soskice forthcoming). The presence of a particular set of ﬁnancial institutions, for instance, may make some kinds of

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labour practices more viable. Where ﬁnancial markets provide capital to ﬁrms on a long-term basis, it is easier for ﬁrms to offer long-term labour contracts, which in turn makes certain kinds of employee relations and production strategies more feasible. The key implication here is that, if competitive deregulation or harmonization leads to institutional reform in one sphere of the economy, this may render institutions or practices in quite different spheres less viable. Institutional complementarities provide a vehicle whereby an incremental reform in one part of the economy can snowball into larger scale shifts in institutions and behaviour across multiple ﬁelds of economic endeavour. In short, organized market economies may be susceptible to chain reactions of unintended consequences following from initially limited efforts at institutional reform. This puts a premium on the prescience of corporate or political leaders, and it may render such economies more vulnerable to convergence than they would otherwise seem.48 The greatest potential for generating such chain reactions seems to lie in the ﬁnancial sphere, where deregulation has given large ﬁrms access to international ﬁnancial markets, provided they adhere to Anglo-American criteria for the provision of funds. Those criteria tend to privilege short-term proﬁtability or shareholder value and only a few of the funders in these markets have the capacities to monitor corporate strategy that allow them to provide ‘patient’ capital. Thus, if large ﬁrms in organized market economies turn to international markets for a substantial portion of their ﬁnance, they may have to alter those aspects of their corporate strategies that depend on the presence of patient capital, including components of labour-market and production practices. These developments have been reinforced by the movement of some large European banks into international ﬁnancial roles that tend to draw them away from the close relationships they once had with domestic ﬁrms (Vogel 1999; Deeg and Lutz 1998; Grifﬁn 1997; Ziegler 2000). Despite some well-publicized cases, however, it is too early to tell how widespread this turn to international ﬁnancial markets is. Thus, developments in the ﬁnancial arena constitute a wedge that is levering open corporate relations in organized market economies, but whether the results will be convergence or some rearrangement of ﬁrm practices that preserves the distinctiveness of these economies remains to be seen (cf. Streeck 1997).

48

The general point also applies to liberal market economies where institutional innovation in one sphere may shift practices in other spheres; but, since it is generally easier for governments to deregulate than to construct the intricate kinds of co-ordination found in organized market economies, this type of economy may be less vulnerable to unintended consequences following from institutional reform.

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Conclusion I have argued that we can discern at least three phases of economic policymaking in post-war Europe, each of which has given rise to a distinctive literature in comparative political economy. National competition has been a leitmotif of policy in each period, but the terms of that competition have changed substantially. As European integration progressed, the instruments on which policy-makers could rely and the institutional conditions associated with economic success shifted. Integration altered both the terrain and modalities of policy-making. Partly for that reason, as the EU enters a new century, its policy-makers again face terra incognita. Monetary union has modiﬁed the context for economic policy-making and intensiﬁed pressure on national institutional arrangements. How governments will resolve the dilemmas they now confront remains to be seen. However, I have also argued that this stage of the integration process is no more likely to produce homogeneous economic policies and institutional arrangements across Europe than did its predecessors. Drawing on the ‘varieties of capitalism’ approach to political economy, I have suggested that nations are endowed with distinctive sets of institutions, embodying strengths as well as weaknesses, which make it feasible for them to pursue multiple adjustment strategies in the face of common problems. Although we can expect to see some similar techniques employed across Europe, there should also be signiﬁcant differences in the adjustment paths of individual nations (cf. Hall 1999; Manow and Seils 1999; Huber and Stephens 1999; Wallerstein 1998). One of the prominent challenges facing comparative political economy in the coming years will be to identify crossnational patterns in these processes of adjustment and to explain why each is taken. In this context, the national experiences and analytical approaches reviewed here provide an important base-point for understanding what is to come.

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14 In Lieu of a Conclusion Anand Menon Vincent Wright, my co-editor, and Jack Hayward's close long-standing friend, died in July 1999, some months prior to the submission of this manuscript to OUP. He was the ideal person to have edited a book such as this. He had collaborated with Jack for some thirty years—they ﬁrst wrote together in the early 1970s. Their association in fact predated their meeting. When Vincent was appointed to a post at Newcastle, Hugh Berrington wanted to double check on this Young Turk who had been appointed. He therefore sent a copy of Vincent's thesis to Jack for a second opinion. Jack happily pronounced himself impressed. When the two ﬁnally met, over a drink after a day in the Bibliothèque Nationale in late 1960s, it was the start of a friendship and academic partnership that stood the test of time. This is not the place for a eulogy of Vincent or for an assessment of his contribution to the study of the politics—and history—of Western Europe.49 Vincent had, however, agreed—or rather volunteered—to write the conclusion to this volume. This is not a gap I could even aspire to ﬁll. Few could rival Vincent's ability to impose a degree of order and clarity on hideously complex issues, or to bring together clearly, logically and, above all interestingly, themes as diverse as those addressed in this volume (for good examples see Wright 1997, 1995). Moreover, although Vincent and I did discuss the ﬁrst drafts of most of the chapters, his illness meant that we did not have the opportunity to talk in detail about what he intended to write in this conclusion. However, it is appropriate to mention, if only brieﬂy, some of the themes and issues which he had planned to address. Having worked alongside and with him for several years, I acquired a certain familiarity with his thinking on the general themes raised in this book. Perhaps the ﬁrst point Vincent would have made relates to what he was fond of referring to as the ‘joys of

49

Those interested can refer to the record of the memorial held in Vincent's honour at Nufﬁeld College.

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complexity’. Paradoxes, contradictions, ambiguities, and ambivalence abound in this volume. Perhaps ﬁttingly, many of these concern France. The country which has arguably done more than any other to shape and to encourage European integration ﬁnds some of its more enduring traditions—state and Republic to name but the two addressed by Grémion—directly challenged by it. As Hoffmann puts it (Chapter 5), ‘France has been both the main initiator of European integration . . . and a recurrently hesitant and reluctant participant in a process that, it feared, was beyond any national control.’ The sheer complexity of the relationship between nation states and the European Union made Vincent sceptical about theoretical endeavours intended to encapsulate that interaction in simple models. Indeed, he was sceptical of ‘any doctrine or system that he saw as crowding out the complexities of ordinary people and of real life’ (Whitehead, 1999). He was, in the words of perhaps his closest collaborator in his later years, ‘a true Oakshottian . . . instinctively distrustful of orthodoxies—whether political, intellectual or academic’ (Hazareesingh 1999). Thus, in typical fashion, Vincent encouraged one of his then doctoral students to openly and vigorously challenge what appeared to be becoming an orthodoxy concerning the applicability of the network approach to the EU (Kassim 1994). Richardson's chapter in this volume represents the next phase of what has been an ongoing debate on this subject. Hine's chapter, whilst drawing to good effect on insights derived from the study of constitutional change at national level, likewise tells a cautionary tale to those who are willing too quickly or unquestioningly to accept that the EU can be analysed as ‘a state like any other’. Forder's chapter on the shortcomings of the economic models from which the structure of EMU has been derived would have particularly delighted Vincent, a political scientist who ‘did not like economists as a breed, being rightly sceptical of their claims and their intellectual imperialism’ (Atkinson 1999). Similarly, Elie Cohen's nuanced contrast of the realities of the EMU process with the assertions and predictions of the mainstream theoretical approaches serves as a reminder of the shortcomings of such explanations. Yet Vincent would also have appreciated the fact that both these authors take economics seriously as a subject—if not as a discipline. Indeed, a central theme in both chapters is the idea that a better understanding of the economics of contemporary Europe might have led to different outcomes in the EMU process, avoiding some of the worst excesses—Cohen refers to Fitoussi's notion of ‘sadomonetarism’—along the way. Along with his scepticism concerning theories and their applicability to myriad different contexts, Vincent's own writings on the elusive notion of Europeanization revealed the complexity and subtlety of his thought. Certainly, on an empirical level, he acknowledged that the European level

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exerted a powerful inﬂuence over domestic actors and policy choices. In a typically wide-ranging essay on the state and major enterprises in Western Europe (Wright 1995: 342), he wrote that the ‘Union . . . has increasingly redeﬁned many of the ground rules which determine state–industry relations’. He also suggested that the Union is engaged in ‘redeﬁning existing political arrangements . . . altering traditional domestic policy networks . . . creating incipient Europe-wide networks . . . triggering institutional change . . . and in reshaping the opportunity structures of both member states and ﬁrms’ (Wright 1995: 343). He would have concurred with Hoffmann's comment that there are ‘very few policy areas that can be handled without reference to or interference from European institutions and policies’, and with the ﬁndings of Berrington and Hague, who conclude with the striking assertion that: ‘the very dynamism of the European Union has shown a capacity to discompose the conventional assumptions and snug certainties of British politics. In the past, political analysts and commentators used to look searchingly within the British body politic for auguries about the future of the British polity. Perhaps they should now look eastward across the sea.’ Vincent also believed that the pressures exerted by the EU posed a challenge to the social sciences themselves by calling into question the validity of traditional theories and approaches. Peter Hall illustrates how developments connected with European integration have affected the explanatory ability of traditional approaches to political economy. Acknowledging that European integration has ‘altered both the terrain and the modalities of policy-making’, he argues that a new approach to the subject—the ‘varieties of capitalism’ approach—is better able than any of its predecessors to explain the crucial developments in the European political economy. In particular, he makes the point that it is not enough for political economists to be in a position to understand and explain the impact the European Union has had on economic policy and policy-making in its member states. Rather, they must also seek to explain why it is that, despite the undoubted scale and importance of this impact, it has not fostered more marked convergence between the policies and institutional structures within them. Colin Crouch speaks more of the implications that European integration ought to have for sociology than of existing achievements, sociologists in general having been slow to respond to European-level developments. Crouch sees the problem as stemming from sociology's uncomfortable identiﬁcation of society with nation state. But he also sees considerable scope for the enrichment of sociological analysis when the subject ﬁnally comes to grips with the European theme, particularly in the area of class analysis. The challenge of the EU applied equally to the strand of political science literature for which Vincent felt the greatest afﬁnity: historical institutionalism (Wright 1997: 174). Indeed, in his own work on the state in Western

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Europe (Müller and Wright 1994; Cassese and Wright 1996), he, much like Jobert in this volume, argued that a fundamental transformation was occurring in the most important of all western political institutions, a transformation partly, if not entirely, spawned by integration. As he put it in his own inimitable way, his research led him to the conclusion that: there is a major process of state restructuring . . . at work, that the process is nationally differentiated, that countervailing pressures are evident (decline in one area, growth in another), that pressures upon the nation state are sometimes exploited as opportunities. That within the state apparatus there are winners and losers resulting from the reshaping process, that decentralisation and Europeanization should not be construed as zero-sum games, that popular demand for state intervention remains high, and that the nation state, with all its problems, remains, for most citizens, the principal repository of legitimate authority. (Wright 1997: 174) Virtually all the themes raised here are picked up in one form or another by contributors to this volume. Jobert deals explicitly with the way in which the state has been reshaped, setting out, as he puts it, and in a turn of phrase Vincent would have appreciated, to trace ‘the passage from earlier assumptions made about the withdrawal of the state to the complex processes for reordering the public domain that characterise contemporary Europe’. Mény points to the multifarious ways in which the EU affects national political structures and the incentives and attitudes of actors within nation states, whilst Cohen illustrates how, at least in France, integration provided an opportunity for élites keen to bring about a shift in the direction of French economic policy (see also Jobert, in Chapter 11). Both Crouch and Hall question, to a greater or lesser extent, the pertinence of treating states as the primary unit of analysis in their respective ﬁelds, with Hall in particular, in advocating the varieties of capitalism approach, stressing the centrality of the ﬁrm as an actor in the political economy of Western Europe. Whilst his institutionalist leanings made him acutely aware of the importance of the EU, and cynical of the overly simplistic transaction-cost reducing approach to it adopted by many Intergovernmentalists, Vincent was not naïve enough to believe that the undoubted, and occasionally profound and unwanted, impact of the EU on national policies and institutions implied the demise of the nation state in Western Europe. Conﬁrmed, if complex, Jacobin that he was (Wright 1997: 174), Vincent was fond of pointing out that the ‘Union's bureaucratic system is shot through with national ofﬁcials and inﬂuences’ (Wright 1996: 161; see also Kassim and Wright 1991). I well remember the startled faces of both the audience and the invited seminar speaker when he loudly proclaimed during the question-and-answer session following a seminar on the EU (Vincent's proclamations were often ill-disguised as questions) that the ‘EU should construct a monument to Margaret Thatcher. She built and shaped the EU of today.’ What he was getting at was the fact that,

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whilst European integration has certainly placed great pressures on many of its member states, certain of them have succeeded more effectively than others in shaping its development. ‘Integration’, therefore, cannot be treated simply as some kind of external pressure acting upon states. It is also a creation, and creature, of those states. Here various strands of his work came together. Vincent's criticism of integration theories was not based on a denial of the fact either that—as neofunctionalists claim—integration has placed unexpected pressures on member states, or that—as intergovernmentalism asserts—member states play a crucial role in shaping the development of integration. Rather, his scepticism was largely methodological. He often complained that contemporary theories of European integration tend, almost invariably, to infer process from outcome, thereby ignoring the importance of policy-making within both the EU and the individual member states. Vincent's work on public administration underlined the importance of this omission. During the course of his last two years, he devoted a lot of time to studying the different ways in which national administrations have reacted to the imperatives of European integration (Wright 1996; Kassim et al. 2000, 2001). Whilst his focus was essentially on administration and not policy outcomes, he was clear that the effectiveness of the former was intrinsically linked to the nature of the latter. In a short piece we co-wrote, an attempt was made to illustrate, in a tone that was less polemical than that Vincent had employed in the seminar room at Nufﬁeld, how Britain has inﬂuenced the direction of integration more profoundly than many in this country seem to believe, thanks in no small part to its administrative efﬁciency (Menon and Wright 1998).50 Thus, although complexity certainly militated against overly simplistic theorizing, Vincent did not believe that explanations for the nature of the interactions between states and EU could not be found. Rather, these were, in Vincent's view, highly contingent on context: national context, temporal context, and institutional context. When he talked about his plans for this conclusion, this ‘hesitant comparativist’ (Wright 1997) spoke of the need to underline the crucial role of national peculiarities in explaining why it is that the various member states have reacted differently to and been affected in contrasting ways by, European integration. Ed Page's Chapter 9 on the applicability to the EU of the co-ordinate mode of production appealed to him, not only because the thrust of the argument sits easily with his own

50

It is a matter of great regret to me that we were unable to complete a far more ambitious comparative piece on the same theme before Vincent's death. Our thoughts were presented at the ﬁnal conference of the ESRC's Whitehall programme in Birmingham. Much of the presentation was scrawled (illegibly) by Vincent on the train there. On our arrival, he suggested that I should present it whilst he—in a ﬁt of uncharacteristic modesty as I thought at the time—sat in the audience. Once I had struggled through the talk, he proceeded to bombard me with questions and criticisms—principally directed at the sections he had written.

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claims about the extent to which national inﬂuences pervade the EU, but also because it combines the twin ambitions of placing speciﬁc phenomena in a wider analytical context whilst being sensitive to empirical reality. Most importantly of all, Vincent planned to use this conclusion as a way of paying tribute to one of his oldest and dearest friends. Jack and he went back a long way. Vincent was instrumental in bringing Jack to Oxford, where I had the privilege of working with both of these simultaneously formidable and eminently personable colleagues. For a young academic engaged in research on France and the EU, there could hardly have been a more stimulating, nor a more supportive environment within which to embark on an academic career. As mentioned earlier, Jack and Vincent's friendship and intellectual collaboration date back several decades, and were continually being renewed. At the time of his death, Vincent was involved in an ambitious, cross-national research project addressing the issue of core executive co-ordination in Western Europe (Hayward and Wright, forthcoming; Wright and Hayward, forthcoming). Typically, and, it has to be said, annoyingly, he managed, seemingly effortlessly, to write a piece capturing the essence of the sector on which I was busily—and ineffectually—carrying out research (Wright 1996). It was because of his friendship with and respect for Jack that Vincent worked so hard to put together and complete this book. By raising important questions, and by challenging students of West European politics to ﬁnd convincing explanations for the complexities, unpredictability and sheer messiness of its ﬁndings, I hope that it would have satisﬁed him, and will satisfy the man whose tremendous contribution to the ﬁeld it honours.

References Atkinson, Tony (1999). Introductory remarks at the memorial service in honour of Vincent Wright. Cassese, Sabino, and Wright, Vincent (eds.) (1996). La Recomposition de l'état en Europe (Paris: La Découverte). Hayward, Jack and Wright, Vincent (ed.) (forthcoming). Governing from the Centre: Co-ordination and the Core Executive in France (London: Macmillan). Hazareesingh, Sudhir (1999). Remarks at the memorial service in honour of Vincent Wright. Kassim, Hussein (1994). ‘Policy Networks, Networks and European Union Policy-Making: A Sceptical View’, West European Politics, 17/4 (Oct.): 15–27. Kassim, Hussein, and Wright, Vincent (1991). ‘The Role of National Administrations in the Decision-Making Processes of the European Communities’, Revista Trimestrale Di Diritto Pubblico, 3. —— Peters, Guy, and Wright, Vincent (eds.) (2000a). EU Policy Making (Oxford: OUP).

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Kassim, Hussein, Menon, Anand, Peters, Guy, and Wright, Vincent (eds.) (2001). The National Co-ordination of EU Policy Making: The EU Level (Oxford: OUP). Menon, Anand, and Wright, Vincent (1998). ‘The Paradoxes of “Failure”: British EU Policy Making in Comparative Perspective’, Public Administration and Public Policy, 13/4: 46–66. Müller, Wolfgang C., and Wright, Vincent (eds.) (1994). The State in Western Europe: Retreat of Redeﬁnition? (London: Cass; special issue of West European Politics, 17/3). Whitehead, Laurence (1999). Concluding remarks at the memorial service in honour of Vincent Wright. Wright, Vincent (1995). ‘Conclusion: The State and Major Enterprises in Western Europe: Enduring Complexities’, in J. Hayward (ed.), Industrial Enterprise and European Integration: From National to International Champions in Western Europe (Oxford: OUP). —— (1996). ‘The National Co-ordination of European Policy-Making: Negotiating the Quagmire’, in J. Richardson (ed.), European Union: Power and Policy-Making (London: Routledge). —— (1997). ‘The Path to Hesitant Comparison’, in H. Daalder (ed.), Comparative European Politics: The Story of a Profession (London: Pinter). —— and Hayward, Jack (eds.) (forthcoming). Governing from the Centre: Core Executive Co-ordination in Comparative European Perspective (London: Macmillan).

Index academics 191 accountability 121, 122, 186; and critics of European integration 63; and monetary union 24 activist state 151–2, 154 Adenauer, Konrad 164 Aglietta, Michel 12 agricultural policy 31, 51; European integration of 19, 39, 185, 190, 206 Alesina, A. 160, 163 Algeria 49, 55 Allen, Christopher 167 Amsterdam School of International Relations 204 Amsterdam Treaty (1998) 23, 29, 127, 154, 184, 210 anti-fascism 48 anti-inﬂationary policies 13 Aron, Raymond 48 Atlantic Alliance 19 Austen-Smith, David, and Wright, John R. 103 Austria, 221 autonomy, judicial 25–6 Bank of Canada 163 Bank of England 163 Bank of Japan 13 Banque de France 14 Barre, Raymond 16–17, 20, 62 Barro, Robert J., and Gordon, David B. 13 Bartolini, Stefano 41, 197, 198 Baumgartner, F., and Jones, B. 106 Belgium 40, 49, 221 Berlin Wall, fall of the (1989) 54 Berrington, Hugh 246, 248 Blair, Tony 62, 64 breathalyser tests 87 Bretton Woods system 19, 20, 21, 167, 168, 207, 219 Britain 21; ‘Community professionalism’ of 38; and constitutional reform 121, 123; and delegated legislative process 140; and deregulation of state monopolies 32; and ECSC 19; enforcement of EU legislation 146; in era of competitive modernization 218; and European Parliament elections (1999) 67–9; and local authorities 39; opposition to formal language 128; privatization in 182; production of delegated legislation 144; rights-based constitutionalism 134; and state intervention 182; and threat of exclusion from EU 131; and wage negotiations 220, 221 British Election Study (BES) 71, 73, 86–7, 90 British Social Attitudes (BSA) 71–2, 77–9, 85–6

Brittan, Leon 183 Brown, George 76 Budget Treaty (1970s) 126 Bundesbank 13, 14, 21, 50, 64, 159, 164–9, 171 bureaucracy 179; co-ordinate modes of 141–7, 150–5; decision-making characteristics 151–3; hierarchical modes of 141–2; implementation 147–8; and interest groups 100, 104–5; and policy making 102–3; productivity of staff 148–50 business executive class 202–3, 204 Butler, D., and Stokes, D. 85 capitalism 53; class analysis 199, 200–1; conﬂict within 206–7 car industry 32, 36, 37, 41, 42 Carter, Jimmy 20, 61 ‘Cassis de Dijon’ case (1979) 26, 36, 42, 207, 223 catalytic converters 32, 36, 37 Catholic Church 57 central banks; empirical studies of 159–61; European 22, 158, 165, 166, 169–71; independence 159–64; nature of independent 12–14; and price stability 24, 162, 164, 168, 171, see also Bundesbank centralization 227

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CFDT (Confédération Française Démocratique du Travail) 179 Chaban-Delmas, Jacques 55 child-bearing 196–7 Chirac, Jacques 61, 65 Christian Democrats; German 56, 220; Italian 220 citizenship 177–8, 210; and European institutions 136; and social rights 189 citizenship regimes 177–8, 180 civil service 62, 183, 218; in France 47, 52 civil society 65, 176, 178 class analysis 198–204 classic economics 216 co-operative federalism 38 co-ordinate mode of production 141–7, 150–5, 250 coal production 19, 29, 30 Coen, David 105 coercion 131, 132 cohabitation 61–2 Cohen, Elie 247, 249 collectivization of policy-making 32, 103 Comitology Decision (1987) 144, 146 commercial town-planning 52 Commissariat Général du Plan 47, 51, 53 Commission see European Commission Common Agricultural Policy (CAP) 19, 185, 190, 206; and French farmers 39 Common Market 32, 214; British application to 70–1; and consumer society 52; and economic liberalism 48–51, 206; and France 62; and modernization 217; and structural distribution in Britain 75–6 communism 51; collapse of 54, 57–8, 223 Communist Party; French 47, 63; Italian 220 competition 178; interstate 175; neo-mercantilist 217, 229; political 176–7 competitive disinﬂation 17–18 competitive modernization era 215–19, 222, 227 Congress (United States); and regulation of lobbying 103 Conservative Party (British); and European Parliament elections 67–9; and public opinion linkage 75–81, 88–9, 90–1; and single currency 74–5; social class and education linkage 81–4, 91; and stability of opinion 85–6; to stay or leave the Community 71–2 constitutional evolution 133–6 constitutional/treaty reform; context 122–9; operating procedure 129–33; substance 120–2 consultation 144, 146 consumer groups 182, 183 consumer society 52 Coombes, D. 151, 153 corporate lobbying 208, 209, 211 corporatism 41, 179, 190

Cotts Watkins, Susan 196–7 Council of Ministers 97–8, 133, 159 Cram, Laura 102 Crouch, Colin 248, 249 Culpepper, Pepper D. 227 Damaska, M. 141–2, 151–2, 154–5 Debré, Michel 61 decentralization 30, 60, 226–7 decision-making; and co-ordinate modes of production 151–3; and democratic legitimation 44; functional dimension of 36–8; territorial dimension of 38–40 decolonization 49 Delors, Jacques 17, 21, 22, 54–6, 65, 152–3, 184, 209–10 demand management 217, 218 Denmark 40 dependency theory 203–4 depoliticization 102 deregulation 32, 188; and central banks 12–13; in era of globalization 223–4; in France 62; and ‘varieties of capitalism’ approach 226, 232–4 Derlien, H.-U. 147 devaluation 17 devolution 30, 40, 121 Diaz, Victor Perez 188 direct effect doctrine 134 directives 146–7 Directorate General for Environment 105 Directorates General 154 dirigisme 62, 101, 103, 129, 151, 168 distributive conﬂict era 219–21 division of labour; new functional dimension 35–8; new territorial dimension of 38–40 domestic policies 25–7 Downs, Anthony 102–4, 139

INDEX

Dublin Stability Pact 22, 23, 24 Dyson, Kenneth 99 East Asia 223 Eastern Europe 32, 223 École Nationale d'Administration (ENA) 47, 52, 62 Economic and Monetary Union (EMU) 159, 164–5 economics; American credibility in 192; competitive modernization era 215–19, 222, 227; convergence across nations 229–34; and dependency theory 203–4; distributive conﬂict era 219–21; European policy-making 214–35; globalization 12–13, 64, 122, 188, 222–4; and state intervention 180; and transnational partnerships 207–11; universality of 181; varieties of capitalism approach 224–33 economies of scales 217 Eddisbury by-election (1999) 69 education 185, 201; and analysis of referendum vote 58; and the Catholic Church in France 57; and link to opinion on Europe 81–4; and occupational qualiﬁcations 200 elections; Eddisbury by-election 69; for European Parliament 67–9; left-wing governments returned 175–6; local council 68; and manipulative policy of central banks 159, 160, 161–2; public opinion/government decision linkage 87–9; voter turnout 67–9, 188 Électricité de France 52 élites 180–1; and constitutional reform 127; and Europe 69; in France 47–8, 51, 62; interaction between 186; internationalization of 53; and neo-liberalism 189 Elysée Agreement 19 Emerson, M., Gros, D., Italianer, A., Pisani-Ferry, J., and Reichenbach, H. 160 Emminger, O. 167 employees 200–1 energy producers 182 environmental policy 179, 183; budgetary impact of regulation on EU 32; collective control of 32; and interest groups 105; and negotiations in Brussels 37; ‘patchwork’ of regulatory approaches 98 Erhard, Ludwig 19, 165 ETUC (European Trade Union Confederation) 210 euro; British and the 67; British public opinion on 73–5; criteria for convergence 64; and French and German interests 12, 22; and stability of opinion 86–7 European agenda 31–4 European Central Bank (ECB) 22, 158, 165, 166, 169–71 European Coal and Steel Community (ECSC) 19, 29, 30, 149–50, 206, 214, 216–17 European Commission; corruption revelations 136, 154–5; Delors presidency of 54, 55, 152–3; as ‘Downsian’ bureaucracy 102–4; and European agenda 31–4; and the European Parliament 122, 136; and goodwill of member states 39; and interest groups 103, 105, 111–12; and

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media, 98; as part of co-ordinate mode of production 153–5; productivity of the 149–50; and regulation policies 37, 185; studies into single currency 15; and treaty revision 128; use of ‘external resource’ ofﬁcials 145 European Community (EC); and distributive conﬂict 219; and market-based integration 222–3 European Court of Justice 25, 33, 39, 118, 223; and constitutional evolution 134–5; and onus of regulation 36 European Defence Community (1950–4) 53, 62 European Economic and Social Council 206 European law 134–5 European Monetary System (EMS) 20, 164, 169, 223; protection against international economic crises 52; two forms of budgetary co-ordination 22–4 European Monetary Union (EMU) 223, 247 European Parliament 52, 55, 210; British elections (1999) for 66–9; and the Commission 103, 122, 136; Draft Treaty on European Union 126, 130; French elections for 64; low voter turnout for 67–9, 188; and monetary policy 159 European Roundtable of Industrialists 209

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European Union (EU); absence of European-level mass media 98–9; as activist state 151–2; administrative staff of 149; after the Maastricht Treaty 54–6; and agenda setting 31–4; and American federalism 132–3; and coordinate mode of production, 141–6, 150–5; and constitutional evolution 133–6; and economic convergence 230–4; enlargement of 29, 31, 154; and issue networks 111, 112; and lack of elected government 97–8, 99; lack of technical skills 145; and new division of labour 34–40; as new opportunity structure 105; paradox in 30; policy making in 97–114, 184, 189–93; problems of political identity in 31; public policy 99; and redeﬁnition of interests 40–3; and Tati analogy 112–13; treaty reform in 118–32; Vincent Wright on 247–51, see also member states euroscepticism 72, 128 Evans, Geoffrey 79, 88, 91 Exchange Rate Mechanism (ERM) 52; British withdrawal from 79 exchange rates; ﬂoating 169; and governments use of 15; ‘snake in the tunnel’ system 20, 219 exclusion 184, 185 farmers 39, 42 fascism 48, 206 Federal Republic of Germany see Germany federal states 40 Federal Trade Commission 160 federalism 132–3; and co-ordinate mode of production 146–7; and production of legislation 143 Fiat 42 ﬁnancial deregulation 223 Fioretos, Karl-Orfeo 231 ﬁrms; class structure 202; and inward foreign investment 224; transnational partnerships 207–9, 223–4; and varieties of capitalism approach 225–34, 249 ﬁscal policy 168, 169–70, 178 Flickinger, R. S. 79 footballer transfers 42 Forder, James 160, 163, 247 Fouilleux, Eve 190 France 231, 247; Banque de France 14; ‘Cassis de Dijon’ case 26, 36, 42, 207, 223; collective desire for equality and protection 62; and Common Agricultural Policy 39; and the Common Market 48–51; constitution of Fifth Republic 60–2; constitutional reform 123, 124–5; and the DM 17, 21; and EMU 16–19, 20–1; and European Union 62–5; farmers 39, 42, 51; health care in 186; and Migratory Birds Directive 39; national interests 42; nationalization in 18, 182; and partnership with Germany 19–22, 53; post-war modernization of 46–51, 218; and presidential arbitration 191; and protection of national airline 38; public service in 43; and reticence to go for

political union 24; and revolution 57; rights-based constitutionalism 134; ritual invocation of the Republic 183; Student Revolt 51–2; and the Third Europe 53–6; vetoes to British membership of Community 70–1, 75, 76; weakening of Republican model 56–8 Frankfurt 22 free trade 30, 31, 207 Front Populaire 14 GATT (General Agreement on Tariffs and Trade) 19, 33, 64, 190 Gaudin, J.-P., and Novarina, G. 189 Gaulle, Charles de 19, 48, 60, 62; vetoes of British membership of Community 70–1, 75, 76 gender discrimination 42 Genscher-Colombo Plan 126 Germany 40, 53, 63, 159, 165; adoption of catalytic converters 32, 37; Bundesbank see Bundesbank; constitutional reform 121, 123–4, 125; and cooperative federalism 146–7; and Delors 56; federalism 133; free trade approach of 207; and Keynesianism 49–50, 169; own concept of monetary order 24; and partnership with France 19–22; and preservation of long-term capital

INDEX

231–2; reuniﬁcation 17–18; technical expertise in drafting legislation 145; and wage negotiations 220 Giscard d'Estaing, Valéry 16, 20, 52 globalization 122, 188, 222–4; and central banks 12–13; and sovereignty 64 Goodman, J. 165, 169 governance 97, 108; studies into 176–7 Habermas, Jürgen 102 Hague, Rod 248 Hague, William 67 Hall, Peter 175, 248, 249 Harvard University 50 Hassenteufel, P. 192 Hayward, Jack Ernest Shalom 1–2, 215, 246, 251 Hazardous Wastes Directive (1991) 145 health care 185, 186, 187, 190 Heath, Edward 71, 76, 77, 89, 91 Heclo, Hugh 109–11, 112–13 hegemony 175 Heilman, J. G., Johnson, G. W., Morriss, J. C., and O'Toole, L. J. 113 Henderson, P. E. 103 Héritier, Adrienne 98 Hine, David 247 Hoffman, Stanley 247, 248 Hood, Christopher 148 Hotfrerich, Carl-Ludwig 168 hunting lobby 39 IGCs (intergovernmental conferences) 125, 126, 128, 129, 130, 131, 133 illegal international trafﬁcking 32 immigration control policy 32 implementation 39–40, 147–8 implicit contracts 228 inclusion/exclusion, relationship of 177 incomes policy 220 incompatability triangle (Mundell) 15 industrial capitalism; and employee categories 200–1; and interventionism 217–18 industrialialization, in France 57 inﬂation; central banks ﬁght against 13, 14; and distributive conﬂict 220; France's ﬁght against 16–17; and macroeconomics 222; and manipulation of central banks 161–3 institutional complementarities 233 institutions; and agenda setting 33–4; familiar patterns of 100–1; and intergovernmentalism 29–30; member states protection of 231–2; and policy communities 108–9 integration; and class analysis 205–7; and constitutional reform 126; development in the 1950s 48–51; and expectations of citizens 188; French debate over 63–5; market-based 222; public opinion on, see public opinion; social dimension to 210–11; uneven progress of 187–8,

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214; Vincent Wright on 249, 250 interest groups; adjustment to new decisional structures 40–3; and bureaucracy 100, 104–5; and the Commission 103, 105, 111–12; and EU's institutions 98; and issue networks 110–11, 112; and member states 106–7, 183; separation from European agenda 33; and venue shopping 105–6 intergovernmentalism 12, 25, 29, 32, 99, 125, 132 International Labour Ofﬁce (ILO) 205, 206 international law 119 international political economy 208 interventionism 175–6, 177, 179, 180, 181–3; in industrial sector 217–18; in wage negotiations 220–1 investment 224 Ireland 230 iron and steel production 19, 29, 30 Islamic community (in France) 57 issue networks 110–11, 112, 113, 139 Italy 21, 191; constitutional reform 121, 123, 124; and national interests 42; and wage negotiations 220 Jacobins 50, 63 Jamaica Agreement (1975) 20 Japan 204, 207, 218 Jenson, Jane 177 Jobert, Bruno 249 Jordan, Grant 108–9 Jospin, Lionel 65 Judge, D. 109 Juppé, Alain 191 Kaletsky, Anatole 86 Katzenstein, Peter J. 218 Keck, Margaret, E., and Sikkink, Kathlyn 106 Kennedy, E. 165 Key, V. O.

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69–70; linkage 87–9; and notion of permissive consensus 70, 72, 79, 89; properties of public opinion 85–7; structural distribution 75 Keynesianism 17, 18, 180, 216; Germany's doubts about 49–50, 169; post-war France 47, 49, 51, 54; reﬂation 229; and unemployment 220, 222 Kingdon, J. W. 151 Kinnock, Neil 77 Koesterl, Arthur 72 Kohl, Helmut 21 Krugman, Paul 16 Kydland, F., and Prescott, E. 13 labour market 170, 178; and cross-national mobility 210; skill divisions within 200–1; women in 184 Labour Party (British) 121; and 1983 general election 71; and European Parliament elections 67–9; and public opinion on Europe 75–81, 88–9, 90–1; and single currency 71–2; social class and education linkage 81–4, 91; and social contract 220; and stability of opinion 85–6; to stay or leave the Community 71–2 labour relations 206, 210 laissez-faire 151, 216 Länder 121 133, 146–7 Latin American countries 204, 223 Leclerc, Edouard 52 n. left-wing politics 175–6 legislation; bureaucratic modes of production of 141–3, 154–5; and central banks 160; German cooperative federalism 146–7; implementation 147–8, 150 legitimacy; and EU institutional relationships 135–6; governmental 44, 122, 183–4; regime of citizenship, 177 Lehmbruch, G. 102 Liberal Democratic Party (British) 68, 80 liberal market economies 227, 229, 230, 233 Liikanen, Erki 154 Lindberg, L., and Scheingold, S. 70 Lindblom, C. E. 209 lobbying 39, 43, 103, 112; the Commisssion 104–5; corporate 208, 209, 211 local government 68, 140 long-termism of central banks 13 low-income groups 178 Luxembourg compromise 219 Maastricht Treaty (1991) 21, 22, 23, 29, 35, 54, 63, 72, 73; adjustments required by 190–1; British conﬂict over 231; British public opinion on 79–80; Bundesbank's inﬂuence on 159; Social Protocol 210; macro-economics 16, 17, 169, 190, 217, 222, 223, 224; ﬁxed parity between franc and DM 21 ‘mad-cow disease’ 34 Majone, G. 38, 185 Major, John 64, 82

Mangano, G. 160 manpower policies 222, 229 manual work 200, 201 manufacturing industry decline 202 MAP 2000 154 market regulation/deregulation 180–1, 188 marriage 196–7 Marsh, D. 165 Marshall Plan 50 Marx, Karl 198–9, 204 Marxism 202 mass protest movements 42 Mazey, S., and Richardson, J. 184 media, and European Union 98 member states (EU); agenda setting 33–4; convergence of economic policies 229–34; and disconnection of monetary policy 12–13; distributive conﬂict era 219–21; and era of competitive modernization 215–19, 222, 227; and globalization 222–4; and hierarchical mode of bureaucratic production 141–3; and implementation of EU policy 39; and interest groups 42–3; as negotiators 189–93; and new division of labour 36; ‘non vorrei’ acceptance of integration 44; participation in drafting EU legislation 145–6; rule-based co-operation 23; and treaty revision 129–32 Mendès France, Pierre 48, 49, 56 Mény, Yves 249 Merger Treaty (1965) 126 ‘methodological nationalism’ 195 middle classes 185 migration 57 Migratory Birds Directive 39

INDEX

minimum wage policies 187 Mitterand, François 17, 21, 44, 53–5, 61, 62 Mollet, Guy 49 monetary union 17, 247; and Bundesbank 21; and central bank independence 159, 164–5; and globalization 187–8, 223; and pure capitalist interests 209 Monnet, Jean 46, 50–1, 56, 149, 153, 217 MORI polls 73, 74, 84, 89 multilateral bargaining 145 Mundell, R. 15, 168 nanny state 179 nation states 195–6; changing role of 42; working population conﬁned to 205 National Assembly (French) 61 national boundaries 199 National Economic Development Council (NEDC) 218 national interest 42 national recovery, France 47, 51 nationality principle 153–4 nationalization; changeability of public opinion on 85; French 18, 182 NATO (North Atlantic Treaty Organization) 64 negative consensus 71, 73 negotiations 189–93 neo-antiracialism 57 neo-conservatism 180 neo-corporatism 220–1, 222 neo-functionalism 12, 25, 99, 250 neo-liberalism 179, 182, 183, 185, 186, 189, 190, 222 neo-mercantilist policies 217, 229 Netherlands 221, 230 new international relations 208 New Labour 67 new social movements 179 NHS (National Health Service) 186 ‘Nimby’ phenomenon 179 Nixon, Richard 20 NOP (National Opinion Polls) 75 nuclear-energy politics 106 Observer/Harris poll 73 Ofﬁcial Journals 36, 144 ofﬁcialdom, two modes of 141–3, 151–2 oil crisis (1970s) 51, 219; and economic integration 20; France's reaction to 17, 18; rise in unemployment 53 OPEC (Organization of Petroleum-Exporting Countries) 219 opinion polls 75, 84, 88; after European elections 69; on Britain's joining a single currency 73–4; on state intervention 179, 181 opt-outs 231 optimum currency area (OCM) 16 organized market economies, 227–8, 230, 232, 233, 234 paciﬁsm 47

259

Padoa-Schioppa Report 15 Page, Ed 250 Paris Treaty (1954) 48 Paris Treaty (1963) 53 Parkin, M., and Bade, R. 159–60 parochialism 56 pensions 185, 200 permissive consensus 70, 72, 79, 89 Pershing missiles 54 Peters, B. G. 112, 139 petit-bourgeois 201 petrol prices 42 Peugeot 42 Philadelphia Convention (1787) 132 Pineau, Christian 49 Plan Jonquille, 52 pluralism 41 policy communities 102, 108–9, 112, 113 policy-making; Brussels' control of initial stages of 38; and the Commission 102–3; economic 214–35; familiar patterns of 100–1, 107; fragmentation of 113; institutionalization of, 100–1; and issue networks 109–11; and negotiations 189–93; shared expertise 184 policy proposals, origins of 151 political business cycle 162 political competition 176–7 political identity 31 political integration 30 political power 109–10 political regulation 175–8 political sociology 197, 198 politicians; and legislative links to central banks 13–14; and message of public opinion 87–8 politico-legal class distinctions 200–1 Politikverﬂechtung model 146–7 polycentrism 186–9, 191–2 Pompidou, Georges 51, 60 Portugal 191 Posen, A. 160 post-feudal society, class analysis of 199–200 post-industrial society 202 poverty 184, 185

260

INDEX

power; central banks and 160; centralization/dispersal of 121; and independence 166 Pressman, Jeffrey L., and Wildavsky, Aaron V. 148 price stability policy 24, 162, 164, 168, 171 privatization 185, 192; in Britain 32; in France 182 procedural ambitions 101, 102, 107–8, 111, 112, 113 Prodi, Romano 127, 128 proﬁt margins 178 programmatic government 97 property rights 200, 201, 204 proportional representation 67 proportionality 37 protectionism 18, 207; see also ‘Cassis de Dijon’ case (1979) public action 178, 184, 191–2 public choice theory 160, 161 public domain 184–6, 192 public opinion 25, 26; on EU decisions 39; on the euro 73–5; and Key's permissive consensus 70–1; and link to party support 75–80, 90; linkage aspect of 87–9; properties of 85–7; speciﬁc and national interests 42; on state intervention 179, 181, 182; to stay or leave the Community 71–2; and structural distribution 75 public policy 99, 183–4, 186–9 public services 26, 43 public space 65 QMV (qualiﬁed majority voting) 127, 133 railways 182, 197 Rasmussen, J. G. 79 ‘rationalized parliamentarism,’ 61 reactive state 151 redistribution 185 referendums 35; British (June 1975) 71, 74, 76–7; French on Maastricht 58, 63; public opinion/government decision linkage 87–90 reﬂation 16–17, 18, 229 regional devolution, 40, 121 regulation 25–6, 155, 178, 185–6; Cassis de Djon case 26, 36, 42, 207, 223; convergence of 231; and new division of labour 36–7 Reichsbank 167 Renault 42 Rhodes, R. A. W. 108 Rhodes, R. A. W., and Marsh, D. 109 Richardson, J. J. 151, 152 Richardson, Jeremy 247 rights-based constitutionalism 134 risk reduction 103 Rocard, Michel 56 n. Rome, Treaty of (1957) 48, 49, 52, 55, 62, 205, 206 rule-based co-operation 22–4 Santer, Jacques 154 Scandinavia 221

Scharpf, Fritz W. 25, 221 Schengen group 30, 32, 130 Schiller, Karl 165, 169 Schmidt, Helmut 16, 20, 52, 165 Schmidt, Vivien 33 Schuman Plan (1950) 53, 62 Schuppert, Gunnar Folke 120 science 181 Second World War 46 self-censorship 26 Shonﬁeld, Andrew 168, 218 single currency; British public opinion and 73–5; and independent central banks 16; public opinion linked to education 84; and stability of opinion 86–7 Single European Act 20, 30, 32, 35, 54, 62, 222; and ICGs 126; and principle of jurisprudence 36 single market 207, 214 Smith, A. 195 ‘snake in the tunnel’ exchange rate control 20, 219 Social Chapter 170 Social Charter 231 social class 177, 178; and link to opinion on Europe 81–4, 91 social-democraticization of society 47, 51 social housing 52 n. social mobilization 33 social policy 187–8 Social Protocol 210 social rights 177 social sciences 180 social security 179, 181–2, 200 socialism 51 Socialist Party (French) 53, 63 society, as virtual synonym for nation state 195–8 sociology of politics 197, 198 solidarity 183 Soskice, David 224 Southern Europe 230 sovereignty 188; and critics of European integration 63, 65; and globalization

INDEX

64; and incompatability triangle 15; and widening gap with Brussels policy making 31 Soviet Bloc 53–4 Spaak, Paul-Henri 49 Spain 21, 40, 191; constitutional reform, 123, 124, 125 Spierenburg Report 154 Stability and Growth Pact 122, 169 states; interaction 175–93; two types of 151 statute-reading methodology 160–4, 171 Streeck, Wolfgang 187 structural distribution 75 Student Revolt (May 1968) 51–2, 57 subsidiarity 30, 35, 37, 155 suffrage 44 Sundquist, James 123 supply-side economics, 222, 223, 226, 229 supranationalism 63, 64 Sweden 97, 190, 220, 231 Switzerland 221 technical expertise 145 telecommunications 182 teleology 127, 128 tendering procedures 43 Tesoka, Sabrina 42 Thatcher, Margaret 39, 44, 64, 77, 97, 249 Thelen, Kathleen 226 think-tanks 180, 189, 191 ‘third estate’ 98 Third World 204 Tietmeyer, Hans 24 n. totalitarian regimes 176 trade barriers 49, 51, 63, 64, 206, 217 trade unions 43, 219, 220–1, 230 transfer of powers 35–40 transnational ﬁrms 223–4 transnationalism, and interest groups 106–7 treaties; and constitutions 118; reform of 122 unanimous voting 30 unemployment 158, 168, 170, 178, 210–11, 216, 220, 229; supply-side economics 222, 223 UNICE (Union of Industrial and Employer's Confederations of Europe) 42, 210 United Kingdom see Britain United States; and agenda setting 33; and Bretton Woods system 20; and constitutional reform 123; economic power of 216; federalism in 132–3; and globalization 64; and inﬂuence in economic policy 181; issue networks in 109–11; and Jacques Delors 56; lobbying in 103, 104, 112; and post-war Europe 49, 50; and relations with France 19; rights-based constitutionalism 134; venue shopping in 106 United States Federal Reserve 13

261

universalism 181 university education 82–4 urban renewal 179 urbanization 57 Uruguay Round (GATT) 190 Van der Pijl, K. 204 variable geometry 131 ‘varieties of capitalism’ approach 224–33, 249 venue shopping 105–6 Versailles, Treaty of 50, 206 veto votes 34, 164 violent protest 42 vocational training programmes 227 voluntary associations 62 voter turnout 67–8, 188 wage-earners 178 wage negotiations 219, 220–1, 230–1 Wallerstein, Immanuel 203 Washington politics, analysis of 109–11 Weber, Max 141 Weiler, Joseph 35, 119 Weingast, B., and Moran, M. 160 welfare state 26, 44, 53; in France 18; and polycentric bodies 187, 188; privatization 185 Werner Plan 21 Wessels, W. 146 Wilson, Harold 71, 76 ‘winter of discontent’ (1979) 220 women; interest groups 105, 107, 184; study of marriage and child-bearing 196–7 Wood, Stewart 226 work-sharing schemes 229 working class 200 working groups 146 World Bank 184–5 Wright, Vincent 160, 246 WTO (World Trade Organization) 33, 64, 205 Yom Kippur war 52 zero-sum game 210 Zysman, John 218