National de‐delegation in multi‐level settings: Independent regulatory agencies in Europe

Abstract

National politicians in Europe have created independent regulatory agencies (IRAs) with significant powers over markets such as communications and energy. After delegation, they have engaged in institutional politicization of IRAs and undertaken numerous attempted or actual de-delegations. Yet overall de-delegation over the period 2000-2020 has been limited, as many de-delegations have been abandoned, temporary or reversed, and also counterbalanced by extensions of IRA powers. The article examines different explanations for this pattern. It looks especially at Europeanization, which has operated through normative and particularly coercive mechanisms. EU coercion has involved threats of legal action, monitoring and enforcement of existing EU legal requirements, and EU legislation expanding IRA powers and protection. IRAs are more vulnerable to de-delegation than trustee non-majoritarian institutions because their position can be altered with simple legislative majorities. Yet even for such agents, the ability of national politicians to reverse delegation is constrained by multi-level institutional settings.

The non‐reversal of delegation in international standard‐setting in finance: The Basel Committee and the European Union

“…Given the complexity of examining the delegation to the BCBS ‐ which is a composite agent with a composite principal ‐ at multiple levels of governance ‐ (see Rangoni & Thatcher, 2022) international, regional (EU), and domestic levels ‐ this paper focuses on elected officials at the EU level, first and foremost, the members of the EP, the only directly elected body in the EU, although reference is also made to elected officials of national governments gathered in the Council of Ministers. The EP is particularly important as far as delegation to international NMIs is concerned because the national parliaments of the member states or individual member state governments have a collective action problem to exert oversight and control over bodies such as the BCBS, whereas the EP has legal basis as Council's co‐legislator to seek to do so (Garrett & Tsebelis, 2000).…”

Reversing delegation? Politicization, de‐delegation, and non‐majoritarian institutions

“…In particular, the US under President Trump engaged in a systematic campaign to impugn the workings and institutional basis of the WTO, while governments in Europe, Africa and Latin America have all argued that regional human rights courts have exceeded their mandates. In contrast, the international Basel Committee, independent regulatory agencies in Europe and independent central banks in Latin America have seen lower levels of politicization, as their Ps, national elected politicians, have only questioned the institutional framework in specific cases and at certain periods of time, rather than across the board (Bodea & Garriga, 2022; Quaglia, 2022; Rangoni & Thatcher, 2022).…”

“…Surprisingly, de‐delegations were also relatively limited for national NMIs, which are much less legally entrenched than international trustee NMIs. National governments in the five largest European countries did not entirely abolish any independent regulatory agency – at most, they merged them into new agencies (usually with more extensive powers than their predecessors); furthermore, those governments often abandoned de‐delegations after initial attempts, introduced time‐limited temporary losses of powers for agencies, or reversed de‐delegations over time (Rangoni & Thatcher, 2022). Governments in Latin America undertook several de‐delegations of independent central banks; but most of these reforms were small and overwhelmingly concerned with the central bank being tasked to finance government deficits (Bodea & Garriga, 2022).…”

“…Indeed, quite the reverse has occurred with extensions of delegation for several NMIs. Thus, many Latin American governments have increased the independence of many central banks while European governments have given extensive new powers to independent regulatory agencies (Bodea & Garriga, 2022; Rangoni & Thatcher, 2022). Equally, international human rights courts were able to extend their powers into new domains (Sandholtz & Stone Sweet, 2022), while the Appellate Body of the WTO was able to formalize its Disputes Settlement Mechanism so that in fact its decisions became precedent‐based, transforming itself into an international court (Pollack, 2022).…”

“…Supranational rules can also restrict national de‐delegation. Thus, EU legislation, often passed after the original delegation, and intervention by the Commission have restricted or reversed de‐delegation of independent regulatory agencies in Europe (Rangoni & Thatcher, 2022).…”