Jean Monnet Center at NYU School of Law


Part II: Building the Legitimacy of Governance Institutions

Inserting Some Generic Principles for their Design:

In the course of my (marginal) participation in a collaborative project with the somewhat preposterous title, "Participatory Governance for Achieving Sustainable and Innovative Policies in a Multi-Level Context", a number of themes emerged from my listening to the discussion by those who were really doing the field research. Subsequently, along with additional reading in several "literatures," I have collected, condensed and labelled a set of generic principles that might be used to guide the design of what I will call generically European Governance Arrangements (EGAs).

I begin with the somewhat heterodoxical notion that EGAs are political institutions and, as such, have to root their legitimacy in distinctively political principles. Just performing well will not be sufficient to ensure that their commands will be voluntarily obeyed - if only because their regulations and assignments inevitably have uneven distributive and even redistributive consequences. Their beneficiaries/victims will eventually question not just the substance of what they do, but how they have made their decisions. Admittedly, agencies, such as the World Bank, which have been promoting the idea of governance insist that their "recommendations for good governance" are apolitical and have nothing to do with "interfering in the domestic politics of Member States." No one should be fooled by this. Setting up a governance arrangement inevitably involves making significant political choices -- with even more potentially significant political consequences if it is done wrong.

At a minimum, three features of political design are involved if the agent creating a governance mechanism expects to obtain legitimacy for its decisions and, hence, ensure the greater efficacy and efficiency of its operations:

(1) What is the purpose of delegating power to such an arrangement (chartering)?;

(2) Who should participate in it (composition)?; and,

(3) How should they reach decisions (rules)?.

The logically prior notion of "chartering" rests on the presumption that a particular issue or policy arena is "appropriate" for a governance arrangement, ergo that it is not better handled by good, old-fashioned market competition or government regulation. Some particular composition of actors, each acting autonomously, is thought to be capable of making decisions according to rules, voluntarily accepted or consensually deliberated, which will resolve the conflicts and provide the resources necessary for dealing with the issue or policy arena designated by its charter. Moreover, these decisions, once implemented, will be accepted as legitimate by those who did not participate and who have suffered or enjoyed their consequences. And, if this were not enough, a successful EGA would also have to demonstrate that its capacity to resolve conflicts and provide resources is superior to anything that a national or sub-national arrangement could have done. Looked at from this perspective, there may not be that many arenas that should acquire "their" EGA!

Someone who has given considerable thought to this question is Eleanor Ostrom.13 Through her empirical research on "self-organized, common-pool resource regimes", she has come up with a list of attributes that increase the likelihood that such governance arrangements will be formed and will perform better than either markets or states. 14 Let us look at this list and comment on the validity of its assumptions for the "pre-design" of EGAs:15

Attributes of the Resource (i.e., of the issue or policy arena): 16

Feasible Improvement: resource conditions are not at a point of deterioration such that it is useless to organize or so under-utilized that little advantage results from organizing. It would not be appropriate to create an EGA to accomplish something no one cared about or that had degenerated so much under national or sub-national management that a Europe-wide approach would be doomed from the start.

Indicators: reliable and valid indicators of the condition of the resource system are frequently available at relatively low cost. Here, the issue involves "Europeanising" the flow of quantitative and qualitative information by eliminating national peculiarities and thereby encouraging the emergence of Europe-wide standards of "best practice."

Predictability: the flow of resource units is relatively predictable. For EGAs, the major problem with this is the likelihood that predictability may differ from one Member State to another, or that, even where the indicators have been Europeanised, they may be subjected to "local" interpretation.

Spatial Event: the resource system is sufficiently small, given the transport and communication technology in use, that appropriators can develop accurate knowledge of external boundaries, and internal micro-environments. Taken at face value, this attribute would literally preclude a European level of governance. Needless to say, until the enlargement process is terminated, no one can know what the external boundaries of any EGA will be. The integration process (and technological developments) may have considerably decreased transaction costs (and will do so even more in the future), but they will always be higher than inside each Member State. What this suggests is that the implementation of EGA decisions should be administered and "articulated" in such a fashion as to encourage the adaptation to national and sub-national contexts - while running the risk of systematic cheating if monitoring mechanisms are inadequate. This also suggests the wisdom of tolerating, even encouraging, "flexibility" in the establishment of EGAs so that they may be composed of different Member States.

Attributes of the Appropriators: (i.e., of the composition of participants):

Salience: appropriators are dependent on the resource system for a major portion of their livelihood. Participants should be "stake-holders" and "knowledge-holders" with both a significant interest in the issue and the capacity to deliver the compliance of their followers-employees-clients to decisions made by the EGA.

Common Understanding: appropriators have a shared image of how the resource system operates and how their actions affect each other and the resource system. Obviously, given differences in language and historical practice, "Europeans" are more likely to be deficient in this attribute than "nationals" - even though convergence across Member States in both performance and intellectual understanding has been impressive and growing. Also, one could question whether this should be taken as a "pre-requisite" for, or as a "product" of, EGA activity.

Low Discount Rate: appropriators use a sufficiently low discount rate in relation to future benefits to be achieved from the resource.

From this discussion, I arrive at some general norms that should guide the initial formation of EGAs, the composition of those who should be entitled to participate in them and the rules they should follow in making their decisions.

I. Six Generic Principles for the Chartering of EGAs:

(1) THE PRINCIPLE OF `MANDATED AUTHORITY': No EGA should be established that does not have a clear and circumscribed mandate that is delegated to it by an appropriate EU institution. Any EU institution should be entitled to recommend the initial formation and design of an EGA, i.e., its charter, its composition and its rules, but (following the provisions of the Treaty of Rome) only those approved by the Commission should be actually established, whether or not they are subsequently staffed, funded, "housed" and/or supervised by the Commission.

(2) THE `SUNSET' PRINCIPLE: No EGA should be chartered for an indefinite period, irrespective of its performance. While it is important that participants in all EGAs should expect to interact with each other on a regular and iterative basis (and it is important that the number and identity of participants be kept as constant as possible), each EGA should have a pre-established date at which it should expire. Clearly, if the EU institution that delegated its existence explicitly agrees, its charter can be renewed and extended, but again only for a definite period.

(3) THE PRINCIPLE OF `FUNCTIONAL SEPARABILITY': No EGA should be chartered to accomplish a task that is not sufficiently differentiated from tasks already being accomplished by other EGAs and that cannot be feasibly accomplished through its own deliberation and decision.

(4) THE PRINCIPLE OF `SUPPLEMENTARITY': No EGA should be chartered (or allowed to shift its tasks) in such a way as to duplicate, displace or even threaten the compétences of existing EU institutions. European governance arrangements are not substitutes for European government, but should be designed to supplement and, hence, to improve the performance of the Commission, the Council and the Parliament

(5) THE PRINCIPLE OF `REQUISITE VARIETY': Each EGA should be free - within the limits set by its charter - to establish the internal procedures that its participants deem appropriate for accomplishing the task assigned to it. Given the diversity inherent in these functionally differentiated tasks, it is to be expected that EGAs will adopt a wide variety of distinctive formats for defining their work programme, their criteria for participation and their rules of decision-making - while (hopefully) conforming to similar principles of general design.

(6) THE `HIGH RIM' OR `ANTI-SPILL-OVER' PRINCIPLE: No EGA should be allowed by its mandating institution to exceed the tasks originally delegated to it. If, as often happens in the course of deliberations, an EGA concludes that it cannot fulfil its original mandate without taking on new tasks, it should be required to obtain a specific change in its mandate in order to do so.17

II. Four Generic Principles concerning the Composition of EGAs:

(1) THE MINIMUM THRESHOLD PRINCIPLE: No EGA should have more active participants than is necessary for the purpose of fulfilling its mandated task. It has the autonomous right to seek information and invite consultation from any sources that it chooses; however, for the actual process of drafting prospective policies and deciding upon them, only those persons or organizations judged capable of contributing to the governance of the designated task should participate.18

(2) THE STAKE-HOLDING PRINCIPLE: No EGA should have, as active participants, persons or organizations that do not have a significant stake in the issues surrounding the task assigned to it. Knowledge-holders (experts) specializing in dealing with the task should be considered as having a stake, even if they profess not to represent the interests of any particular stakeholder.

(3) THE PRINCIPLE OF `EUROPEAN PRIVILEGE': All things being equal, the participants in an EGA should represent Europe-wide constituencies.19 Granted that, in practice, these representatives may have to rely heavily on national and even sub-national personnel and funding, and may even be dominated by national and sub-national calculations of interest, and granted that the larger the constituency in numbers, territorial scale and cultural diversity, the more difficult it may be to acquire the "asset specificity" that provides the basis for stake-holding, the distinctive characteristic of a European governance arrangement is nonetheless contingent on privileging this level of aggregation in the selection of participants.

(4) THE ADVERSARIAL PRINCIPLE: Participants in an EGA should be selected to represent constituencies that are known to have diverse and, especially, opposing interests. No EGA should be composed of a preponderance of representatives who are known to have a similar position or who have already formed an alliance for a common purpose.20 In the case of `knowledge-holders' who are presumed not to have constituencies but ideas, they should be chosen to represent whatever differing theories or paradigms may exist with regard to a particular task.

III. Eight Generic Principles concerning Decision-Rules for EGAs:

(1) THE PRINCIPLE OF `PUTATIVE' EQUALITY: All participants in an EGA should be considered and treated as equals, even when they represent constituencies of greatly differing size, resources, public or private status, and "political clout" at national level. No EGA should have second and third class participants, even though it is necessary (see Item II.2) to distinguish unambiguously between those who participate and those who are just consulted.

(2) THE PRINCIPLE OF HORIZONTAL INTERACTION: Because of the presumption and practice of equality among participants, the internal deliberation and decision-making processes of an EGA should, as much as possible, avoid such internal hierarchical devices as stable delegation of tasks, distinctions between "neutral" experts and "committed" representatives, formalized leadership structures, informal arrangements of deference, etc., and should encourage flexibility in fulfilling collective tasks, rotating arrangements for leadership and rapporteurship, extensive verbal deliberation, -- and a general atmosphere of informality and mutual respect.

(3) THE CONSENSUS PRINCIPLE: Decisions in an EGA will be taken by consensus rather than by vote or by imposition.21 This implies that no decision can be taken against the expressed opposition of any participant, although internal mechanisms usually allow for actors to abstain on a given issue or to express publicly dissenting opinions without their exercising a veto. Needless to say, the primary devices for arriving at consensus are deliberation (i.e., trying to convince one's adversaries of the bien-fondée of one's position), compromise (i.e., by accepting a solution in between the expressed preferences of actors) and accommodation (i.e., by weighing the intensity of actor preferences). Regular and iterative interaction among a stable set of representatives is also important, although (see Item I.2 ) this should be temporally bounded.

(4) THE `OPEN DOOR' PRINCIPLE: Any participant should be able to exit from an EGA at relatively modest cost and without suffering retaliation in other domains - either by other participants or EU authorities. Moreover, the ex-participant has the right to publicize this exit before a wider public (and, the threat to do so should be considered a normal aspect of procedure), but not the assurance that, by exiting, he or she can unilaterally halt the process of governance.

(5) THE PROPORTIONALITY PRINCIPLE: Although it would be counter-productive for influences to be formally weighed (see Item III.1) or counted (see Item III.3), it is desirable that, across the range of decisions taken by an EGA, there be an informal sense that the outcomes reached are roughly proportional to the specific assets that each participant contributes (differentially) to the process of resolving the inevitable disputes and accomplishing the delegated tasks.22

(6) THE PRINCIPLE OF SHIFTING ALLIANCES: Over time within a given EGA, it should be expected that the process of consensus formation will be led by different sets of participants and that no single participant or minority of participants will be persistently required to make greater sacrifices in order to reach that consensus. Thanks to Item III.4, this situation should be avoided, if only because it will be so easy and "cheap" for marginalized actors to exit.

(7) THE PRINCIPLE OF `CHECKS AND BALANCES:' No EGA should take a decision binding on persons or organizations not part of its deliberations unless that decision is explicitly approved by another EU institution which is based on different practices of representation and/or of constituency. Normally, that EU institution will be the one that "chartered" the EGA initially, but one can imagine that the European Parliament, through its internal committee structure, could be accorded an increased role as co-approver of EGA decisions.

(8) THE REVERSIBILITY PRINCIPLE: No EGA should be empowered to take decisions (even when co-approved as per Item III.7) which cannot be potentially annulled and reversed by "rights-holders," i.e., by European citizens acting either directly through eventual referenda or indirectly through their representatives in the European Parliament.

IV. Five Other Generic Principles of EGA Design:

(1) THE PRECAUTIONARY PRINCIPLE: An EGA should, in the substance of its decisions, take into account the full range of knowledge and, where that knowledge is uncertain or incomplete, it should err on the side of assuming the worst possible consequence - ergo, it should avoid risks rather than maximize benefits when calculations about the latter are inconclusive.

(2) THE FORWARD-REGARDING PRINCIPLE: An EGA should, in the substance of its decisions, take into account the furthest future projection of the consequences of its decisions. This obviously poses a serious difficulty in terms of the composition of its participants, (e.g., who can legitimately represent as yet unborn generations), but some "place at the table" should be occupied by persons or organizations representing as long a time perspective as possible.

(3) THE SUBSIDIARITY PRINCIPLE: No EGA should deal with an issue or make decisions about a policy that could be handled more effectively or more legitimately at a lower level of aggregation, i.e., at the level of Member States or their sub-national units. Inversely, no EGA should occupy itself with an issue that cannot be resolved and implemented at the level of Europe, but requires a higher level of aggregation, i.e., the Trans-Atlantic or Global one.

(4) THE PRINCIPLE OF (PARTIAL) TRANSPARENCY: No EGA should take up an issue or draft a projet de loi that has not been previously announced and made publicly available to potentially interested parties not participating directly in its deliberations. Conversely, none of the participants in an EGA should make public the content of deliberations while they are occurring and the draft of a projet until a consensus has been reached. Once a decision has or has not been made, the participants are free to express their satisfaction/dissatisfaction with it to whomever they please.

(5) THE PRINCIPLE OF PROPORTIONAL EXTERNALITIES: No EGA should take a decision whose effects in financial cost, social status or political influence (especially for those not participating in it) is disproportionate either to the expectations inherent in their original charter or general standards of fairness in society. When claims of disproportionate effect are made, these externalities should be investigated and, where found to be justified, compensated for by other EU institutions - in particular, by the European Parliament.

Concluding with some caveats

Participatory/democratic governance is no panacea. It may contribute positively to enhancing the legitimacy of the EU, but only if it is "seconded" by reforms in the institutions of its government. Moreover, EGAs will not work to resolve all policy issues and they will not work unless firmly based on political, as well as administrative, design principles. And this means that difficult choices involving their charter, composition and decision-rules cannot be indefinitely avoided or finessed. Unless EGAs are "properly" designed, there is no reason to be confident that their decisions will be more sustainable or accepted as legitimate by those who have not participated in them and joined in the consensus which they are intended to promote. And, as emphasized above, governance arrangements never work alone but only in conjuncture with community norms, state authority and market competition.

I can foresee two key dilemmas that must still be addressed - even if progress is made on the difficult choices involved in designing EGAs. I will only raise them without further explication:

The proliferation of EGAs tends to occur within compartmentalized policy arenas (and more so in the EU than in the Member States). This leaves unresolved the larger issue of how eventual conflicts between their decisions are going to be resolved. Multiple "governances" at micro- or meso-levels, no matter how participatory, sustainable and legitimate on their own, may end up generating macro-outcomes, e.g., via externalities, that were not anticipated and that no one wants!

The criteria for the inclusion of participants and the making of decisions in EGAs are not generally compatible with the conventional norms for democratic legitimation used within national and sub-national polities - although experimentation with governance arrangements is occurring at all levels of aggregation. Before EGAs can be reliably deployed and generate a sense of obligation among broader publics, it may be necessary to spend a good deal of effort in changing peoples' notions of what democracy is and what it is becoming.

13 Governing the Commons. The Evolution of Institutions for Collective Action (Cambridge: Cambridge University Press, 1990). An abbreviated version is "Reformulating the Commons," Swiss Political Science Review, Vol. 6, No. 1 (2000), pp. 29-52. It is from this latter source that I have derived my comments.

14 Not all EGAs, existing or eventual, fit her generic specifications. Only some of them deal with resources that are "subtractable," i.e., whose consumption precludes its use/enjoyment by others. Many, but not all, involve goods from which it is difficult to exclude non-contributors. And virtually none of them are, strictly speaking, "self-organizing" since all of them involve some mandate from EU institutions that defines the scope of their activity and imposes political and legal limits on their decisions.

15 Another literature that I thought seriously about exploiting in my search for operative norms-cum-design principles was that on "deliberative democracy." Although there is much there that could eventually be useful from the perspective of ideological justification, I found it virtually impossible to extract relatively concrete suggestions from these treatises. Not only are the arguments usually advanced at a high level of abstraction with no attention to the specifics of how one might actually design an arrangement to be more "deliberative," but many of their root suppositions seem to render it irrelevant. For example, it would be a serious distortion to presume that most of the interactions within the various forums of the EU are aimed at establishing truth or persuading one's opponents. Bargaining and negotiation are the rule, and the "successful" result is usually a compromise, not a new norm, a shared truth or a conversion in position. Interlocutors in EU committees, no doubt, learn from each other and change their perceptions of interest - but it would be hazardous to presume that this creates a novel "communicative rationality" -- least of all, one that "rationalizes domination." As is often the case with "philosophy-based arguments" in political life, they are based on a counterfactual ideal that cannot be approximated in the real world of imperfect information, limited rationality and continuous exchange of promises and threats. By establishing such a high level of validity, they tend to exclude the search for "second-best" solutions ("le mieux est l'ennemi du bien", the French would say) - and that is what governance is all about. From an even more practical perspective, EGAs are never composed of "all the affected parties" - just a very selective subset of their representatives. Indeed, they would not work if everyone (or every organization) got to deliberate. The trick is to compose them and, then, to conduct them in such a way that negotiations among a small group of self-interested actors can nonetheless produce a decision that will prove (until future contestation) to be acceptable to those who have not participated. For a heroic, but, in my view, ultimately frustrating effort to apply the "deliberative" label to the EU, see Erik Oddvar Eriksen and John Erik Fossum (eds.), Democracy in the European Union. Integration Through Deliberation? (London: Routledge, 2000). In their favour, it should be noted that the editors did insert a question mark after the title.

16 My comments are in italics.

17 N.B., that this does not mean that "log-rolling" and "package-dealing" should not be an integral part of the integration process, just that EGAs are not the appropriate sites for such activity. Decisions involving the negotiation of tradeoffs across circumscribed issue areas should be the purview of other EU institutions, i.e., the Commission, the Council of Ministers, the European Council and, hopefully in the future, the European Parliament.

18 Another way of stating this point is to stress that all participants must possess some type or degree of "asset specificity" -- i.e., they must demonstrably have material, intellectual or political resources that are apposite to the tasks to be accomplished. Needless to say, defining "the stakes" and those who hold them is bound to be politically contested, since the number of representatives and experts who can make that claim ("interest-holders" in my terminology) is potentially unlimited - thanks to the growing interdependence of policy domains. As an approximation, I propose that a relevant stake-holder be defined as a person or organization whose participation is necessary for the making of a (potentially) binding decision by consensus, and/or whose collaboration is necessary for the successful implementation of that decision. In practice, this is likely to be determined only by an iterative process in which those initially excluded make sufficiently known their claims to stake- and knowledge-holding so that they are subsequently included. Presumably, those initially invited to participate who turn out not to be indispensable for policy-making and implementation will leave of their own accord - although a persistent problem in EGAs is likely to be the absence of an effective mechanism for removing non-essential participants.

19 This should not be interpreted to mean "EU-wide constituencies" since there may be significant stake-holders and knowledge-holders in prospective Member States and even in those that have explicitly chosen not to join the EU.

20 To fulfil this principle, it may be necessary for the designers of EGAs to play a pro-active role in helping less well-endowed or more dispersed interests to get organized and sufficiently motivated to participate against their adversaries. Needless to say, this element of "sponsorship" intended to encourage a greater balance in adversarial relations can conflict with the subsequent principle of equality of treatment and status. It can also generate serious questions concerning the autonomy of such `sponsored' organizations from EU authorities.

21 N.B., this principle serves to distinguish EGAs from other institutions operating at European level. For example, parliaments, courts, central banks and independent regulatory agencies ultimately take their decisions by vote, even if they engage in extensive deliberation and seek to form a consensus beforehand. Some expert commissions and many executive bodies may decide by imposition when the actor designated as "superior" exercises his or her `sovereign' authority.

22 A more orthodox way of grasping this principle would be to refer to "reciprocity" - although this seems to convey the meaning of equal shares or benefits across some set of iterations. "Proportionality" is similar, but allows for the likelihood that stable inequalities in benefit will emerge and be accepted on the grounds of differential contribution/assets.




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