- Decentralisation of European Economic Law. Two Models: Competition Law and Financial Services Law
Dr Myriam Senn
Swiss Federal Banking Commission
As of today, the enforcement of European economic law, in particular of financial services and competition law, has not been satisfactory with regard to the goal of harmonisation. New rules should improve the situation in the future. In competition law a regulation on the implementation of the rules on competition will introduce a decentralised system of law enforcement. In financial services law the revised investment services directive proposes the introduction of a four-level enforcement model, which represents another model of decentralised regulation. The analysis examines these regulatory structures of decentralised incentives mechanisms taking into account that decentralisation raises issues in relation to complexity, fragmentation, interdependency and governance. On the basis of this analysis, decentralisation as an alternative to centralised or command and control procedures is evaluated. It is argued that there is little incentive to follow centralised regulatory procedures. The consistent and uniform application of law is better ensured with decentralised regulatory structures, which as a matter of fact can appear in a wide set of forms including self-regulation. Finally, the case is made for relying on decentralised incentive mechanisms in economic law.
- Beyond National Styles of Regulation - Genetically Modified Food in Germany and in the United States
The so-called transatlantic divide on biotechnology cannot only be observed in the amount of public uproar over the introduction of GM Food but also in the regulatory approaches to the issue. At first sight, and very general, the legal regulations in the United States seem to be less strict than on this side of the Atlantic.
National differences in the legal regulation of a seemingly identical issue are predominantly 'explained' by referring to the particular regulatory style of a given country. But instead of explaining why different objects of regulation are characterised by different styles, the national styles approach simply seems to state that there are differences. Thus, instead of revealing what the observable differences between two countries are about, the national style approach itself seems to be in need of an explanation. This paper therefore will present a comparison of the different regulatory approaches to GM Food in Germany and in the United States beyond the 'national styles approach'.
Instead it will be argued that by focusing on the interorganisational networks, which emerge around a given issue, a more appropriate understanding of the regulatory process itself can be achieved. As 'regulation' can then be conceptualised as a complex interplay of a legal rule, its addressees (organisations) and the given issue, the differences that occur at the surface can finally be traced back to differences in this very interplay. This hinted organisational-based concept of regulation at least aims to overcome the territorial trap in comparative research on regulation.
- Regulation of the NHS in England
Mr Gwyn Bevan
Office for Improvement on Health Care Performance
In 1997, the New Labour government laid out its policies to replace what was seen as outright competition of the 'internal market' with a 'third way' that offered a more collaborative approach. The policy implemented for NHS organisations in England, emphasised two instruments of regulation: clinical governance and performance (star) ratings. Clinical governance is a system of steps and processes to ensure that patients receive care of high quality. Each organization was, from 2001, subject to reviews of clinical governance by the Commission for Health Improvement (CHI). Performance (star) ratings are typically based on three elements: key targets, a wider set of indicators (in the "balanced scorecard"); and results of CHI's reviews of clinical governance. These were first published by the Department of Health in 2001 (for acute and specialist hospitals). In 2002, CHI took over responsibility for the development and production of ratings, and published these for all types of NHS hospitals, ambulances and Primary Care Trusts in 2003. From April 2004, CHI will be replaced by a new inspectorate with wider powers: the Commission for Healthcare Audit and Inspection (CHAI). New government policies being introduced from 2003-04 emphasise patient choice and payment by results (funding providers for service volumes at standard costs). The objective of this seminar is to consider regulatory issues raised by performance ratings and these new policies.
- Governance without Governments? The Case of the Internet
Dr Raymund Werle
Max Planck Institute for the Study of Societies
The Internet evolved in a niche in which it was promoted and only loosely controlled by the (US) government. It has developed into a global network that challenges the traditional nation-based governance institutions. But the popular notion that governments have lost control over the network is misleading. We observe the evolution of new procedures and institutions of control in which governments play different roles but are rarely completely absent. Based on a typological distinction concerning the scope and nature of control (coordination and regulation) the role of governments is analysed. With the central focus on basic operational and infrastructural functions it is argued that the un-centralised Internet is governed by a patchwork of organisations and institutions in which hierarchical, network and market modes of control appear to be balanced. This balance can be disturbed by too much as well as too little government intervention.
- Materiality and Performativity of Calculation
Dr Herbert Kalthoff
European University Viadrina, Frankfurt Institute for Transformation Studies
No matter what kind of activity actors in the economic field are engaged in they are always confronted with specific risk factors which may all result in loss of money and loss of market potential. In a different vein, economic actors portray themselves as using standardised representation devices. Within the assessment of risk as well as within the context of practices of economic self-representation calculation plays a major role. Two different layers of calculation have to be taken into account. One layer is the role of technological instruments (e.g. computer networks and software) and the other one the role of representation devices, that is writing (e.g. formulas and models). Therefore, economic sociology combines the analysis of technology with the analysis of operative writing.
Instrumental accounts of technology focusing on social, political and economic domination have stressed that technological artefacts transform human actors into their appendages, manipulating them constantly and to their own discretion. Studies in the field of "Science and Technology Studies", on the other hand, have focused on the social construction of technical artefacts, showing that the forms of knowledge underlying these construction processes are themselves socially constructed and have evolved through a long historical process within which they come to prevail over other technical artefacts. The main question concerning the relationship between nature and society and, furthermore, between human and non-human agency has been shifted by the actor-network theory, arguing that social life cannot be explained by arguments referring to social aspects alone. The paper broadens this picture by referring to the later work of Martin Heidegger and his philosophy of technology (the Gestell [enframing]). Its aim is to raise the question of how economic sociology has to conceive the activities of framing which constitute calculation and which are performed by different agencies and practices.
If the analysis of technology constitutes one part of the analysis of calculation, the analysis of the medium - operative writing - by which calculation is performed constitutes the second part. The architecture of writing produces and presents coherence and constitutes the perception of empirical objects by the interplay of cognitive processes and the production of visibility. The constitution of empirical objects by visualisation means that the written visualisation actually produces the objects. This is to say that what is represented by financial models or formulas is brought into existence by the representation itself because operative writing produces and suggests a certain view on the social or economic activities observed. In this sense the connections are not between financial objects, but between theoretical objects which are brought into a distinct relation and expressed by mathematical, algebraic language.
Thus, the aim of the paper is to describe the frame and activities of framing performed by technological artefacts and the medium of calculation.
- Containing negative integration? The European politics of 'services publics'
Professor Adrienne Héritier
European University Institute
- Regulation and Human Genomics
Dr Oliver James
University of Exeter
This seminar assesses the framework for providing UK Government with advice about human genomics, particularly advice about regulation. There are a range of bodies involved in this activity but the seminar focuses on the operation of the Human Genetics Commission (HGC) which was established in 1999 as the UK Government's advisory body on how new developments in human genomics will impact on people and health care, in particular the social and ethical issues raised by these developments.
The HGC contains a number of innovations in response to controversy about advisory systems, particularly in the light of controversy over food safety. The seminar focuses on these innovations in the HGC's current work producing advice about the regulation of human reproductive genomics.
- Misfortune, Insurance, and the Liberal State: the perplexities of fairness
Professor Eugene Bardach
University of California, Berkeley
The modern liberal state compensates citizens for a wide variety of misfortunes. These range from being victim of an earthquake to being a single parent in poverty to having a new highway disrupt your neighbourhood. I am currently at work on a book that takes a policy designer's perspective on this broad array of policies. In my seminar I will present the outlines of the theory to be developed in the book as a whole, and will apply it to one particular misfortune: being the victim of a terrorist attack.
Any compensation policy implicitly or explicitly contains answers to three big questions: For what? How much? To whom? The answers must be evaluated against several design criteria, of which the most important are optimal prevention and fairness. In this seminar I focus on the latter, and particularly on the dimension of fairness which answers the three big questions by prescribing proportionality to moral deservedness. My main purpose in the book is to analyse the relative virtues and limitations of four proportionality theories, based respectively on empathy, social solidarity, insurance, and restitution.
No proportionality theory, of course, can remain perfectly intact in the real world of coalition-formation, pluralistic bargaining, and rent-seeking. When policy designers decide what is morally fair, they must also consider what is sustainable politically and under realistic conditions of implementation.
- Risk regulation and interest accommodation in European pharmaceuticals' licensing
Dr Jürgen Feick
Max Planck Institute for the Study of Societies
Pharmaceuticals are considered one of or even the most densely regulated products, market entry licensing being a strategically important regulatory subfield. Close to the phase of marketing, licensing is the first decisive hurdle to be crossed by a pharmaceutical enterprise in order to recover its research, development and regulatory costs for a new product. Furthermore, regulatory bodies thus determine the medicinal arsenal available to the medical profession, the therapeutical spectrum to be offered to potential patients and the risks patients have to take when consuming pharmaceuticals. Indirectly regulatory outcomes can have important effects on national pharmaceutical industries. Thus, pharmaceuticals' licensing - and pharmaceuticals' regulation in general - has high political salience not only in terms of health policy, but also of economic and industrial policy.
What, in hindsight, seems to be an almost logical regulatory development resulting from rational problem solving behaviour, is in fact the result of historical struggles for social reputation, regulatory power and economic gains. And what can be viewed today as an assessment and decisions-making process largely driven by scientific and technical considerations, making this regulatory field an especially convincing candidate for international conversion or even - as in the case of the EU - supranational regulatory institutions, actually allows much leeway for the discretionary utilisation of regulatory authority and the influence of diverse interests.
The European Community is a good example to illustrate these tensions between the scientification of regulatory decision-making, convergence under the heading of harmonisation and integration, and the influence of political and economic interests in shaping policy outputs and their implementation. The current simultaneous existence of three different regulatory procedures for pharmaceuticals' licensing within the European Community is a case in point: They are the result of interest-driven political influence and are accommodating a diverse universe of interests.
- Asymmetrical Actors and Intentional Risk
Professor Frank Furedi
University of Kent at Canterbury
Differential cultural attitudes towards risk-taking have a crucial bearing on the impact of asymmetrical threat. It is not simply the case that asymmetric actors regard risk-taking from the vantage point of an opportunity, the very risk-averse culture of their target society may encourage them to exploit this difference in attitudes.
Officials concerned with reassuring a risk-conscious public may well become distracted from the task from preparing society to deal with asymmetric threat. In some cases, official reassurance can actually amplify the public's sense of insecurity, and in others, governmental warning can actually serve to intensify public fears.
Asymmetric threats today are principally non-material and non-technological factors such as an asymmetrical relationship towards time and space, an asymmetry of will, an asymmetry of cultural attitudes, an asymmetry towards risk-taking and an asymmetry in vulnerability. This paper will examine the impact of these five variables on the constitution of contemporary asymmetric risk.
- Enterprise Risk Management: lessons from the field
Professor William Shenkir and Professor Paul Walker
University of Virginia
Since the late 1980s policy makers in industrialised countries call for more self-regulation by industry regarding the protection of the environment. This is reflected on a EU level in the EMAS directive (Eco Management and Audit Scheme) and in several earlier initiatives in some of the member states of the European Union. Also this policy has triggered a number of self-regulatory activities by industry in the EU as well in the United States. For example, the chemical industry introduced its international Responsible Care programme. Governments learn to adapt to the special structural and cultural needs of firms in enhancing their environmental performances. Forms of self-regulation are now being stimulated, although at the same time command and control strategies, such as permit issuing and the enforcement of environmental rules, are not forgotten. In the Netherlands more and more co-regulatory arrangements are being created. Apart form voluntary agreements between central government and industrial associations, on a regional and local levels governments are experimenting with co-regulation through a negotiating and consulting process resulting in a more flexible permit. Having participated for some years as a researcher in the permitting process between Amsterdam municipal officials and representatives of an R&D plant of an oil firm I observed this process leading to a new kind of relationship, based on trust and professional experience on both sides. This process of transactions between two parties has considerable consequences for the enforcement of environmental regulations by government and for the participation of public interest groups (PIGs) regarding governmental decision-making. The ISO 14001 standard and the EMAS-regulation of the EU (Community regulation on Environmental Management and Audit Scheme) both regulate the process of companies developing environmental management systems on a voluntary basis.
The advantages of this ´smart´ regulation are the creation of a better understanding between regulator and regulated and better performance by companies (and even increased revenues as a result of their improved performance).
There are also more negative feelings. Some companies think the negotiating process takes too much time. Some prefer the old fashioned command and control strategies. Some are not too happy about the flexible conduct of government, if this means government does not follow up with control visits, and in that way is loosing contact.
Some of the questions to be answered in this seminar are:
- In what way EMSs have been successful in the UK compared to the Dutch situation?
- Which particular strategy has been followed, a more self-regulatory or a ore co-regulatory approach ?
- Is the implementation of an EMS itself a necessary or sufficient condition for real environmental improvement?
- What motivates facilities to adopt a certified EMS?
Some methodological questions about researching EMSs and co-regulation will also be raised during the seminar.
- The Stock Exchange Men and Their Marvellous Instruments: price-recording technologies, knowledge and the origins of modern market organisation
Dr Alex Preda
University of Konstanz
A key aspect of modern financial markets is given by securities prices as standardised, easily available, real-time information. This informational character entirely depends on price-recording technologies. I examine here the emergence of price-recording technologies in the later nineteenth century, the cognitive and cultural assumptions of these technologies, how they changed financial markets, the risk and regulatory issues they raised. Using an approach developed in the sociology of knowledge and science, I argue that price-recording technologies have consequences which go well beyond the mere increase in speed and efficiency.
Nowadays, only one of these technologies survives in its electronic form-the ticker. In the 1860s, however, several price-recording technologies were developed, working on quite different principles. Along with varieties of the stock ticker, developed in North America, there was the "pantograph" developed and used on the Paris Bourse. The "pantograph" worked like a primitive fax machine (a chemical telegraph), while the stock ticker was a mechanical telegraph. Their cognitive and cultural assumptions, way of working, and effects were quite different, although they were conceived to answer similar needs. Technically speaking, the "pantograph" was universally acknowledged at the time as the more sophisticated machine, with some clear technical advantages in transmission. Dr Preda examines how the ticker became dominant and how it changed the ways in which financial markets work. From its inception, the ticker raised organisational, regulatory, and control issues and provoked social conflicts at the Stock Exchange. The regulatory and control issues which emerged with the ticker can still be found in contemporary financial markets.
- Exam Howlers or Accidents Waiting to Happen?: a comparison of the regulatory implications of the exam results debacles in Scotland 2000 and England 2002
Professor Brian W. Hogwood
University of Strathclyde
The presentation compares the regulatory implications of two highly politically salient exam-marking crises in the context of formal ministerial accountability to parliaments, blame-shifting, and 'alphabet soups' of bodies varying in formal status from government department, non-ministerial department, executive agency, statutory non-departmental public body, 'advisory' committees carrying out executive functions, and a range of nominally private bodies, some of which are carrying out 'public' functions. Among the issues introduced are monitoring and regulation in the context of (flawed) change management and separation of regulatory functions from others such as curriculum development and exam-setting and marking.
- Communities of Practice and the Politics of Conflict in EU Problem-Solving
Mr Damian Chalmers
Regulation and the European Community enjoy a mutually constitutive relationship. On the one hand, regulation is what the European Community spends most of its time doing. On the other, the scale of the Community's regulatory activities have made it possibly the central arena in gauging the nature of regulation within the United Kingdom today. Yet, the Commission White Paper on Governance suggests a crisis in EC regulation. It is often poor quality and lacks broader support. The solution suggested both in EC documents and more general regulatory debates is broadening participation. This will enhance the quality of debate, disseminate knowledge of the issues and incorporate dissenting voices.
Unfortunately, experiments in deliberative democracy have unerringly shown them to lead to poor policies. They are inefficient, exacerbate existing asymmetries of power and polarise views. This is, in part, because deliberative models take a lazy of the communicative process. They provide no discussion of central institution of their political model. For talk, per se, is not a good but is rather informed by the performative, institutional and epistemic contexts that surround any communication. That is to say any utterance must be with a view to something, take place in a particular setting and be based on certain shared understandings.
Regulation is a form of government that equates politics with problem-solving. It draws a particular relationship between the policy process and knowledge in which the latter is used to structure and legitimate the policy-process. Politics becomes centred around the generation and application of knowledge. Reforming regulation is therefore an exercise in the politics of knowledge.
If the task of regulation is to contribute the generation of knowledge then, the social psychology literature informs us that the best settings for this are 'communities of practice' - informal discrete groups characterised by mutual trust, shared episteme, joint enterprise. Knowledge-generation is therefore a polarised, pluralized process that is characterised not by consensus, but, insofar as it is imposed by selective and self-selecting groups, by cleavage and conflict.
It is not possible for law to 'democratise' this process by reconstituting it. Instead, it can impose procedures over how choices are made between different types of knowledge and suggest broad norms that all forms of knowledge should address. In this there is the structural difficulty that any site is more receptive to some forms of knowledge than others and that any choice necessarily creates new asymmetries of power and hegemonies.
In this regard the EC enjoys a potential comparative advantage in the institutional and epistemic constraints it can impose over this process. Institutionally, the multilevel nature of EU governance creates a series of different sites at the various stages of the policy process, each of which imposes checks and balances upon the other. Each site is receptive to different forms of knowledge, is responsive to different constituencies and has different tasks. These sites, deliberatised' serve to refract and impose internal checks and balances upon each other.
Epistemically, the EC suggests a favoured mode of discourse, namely that one should deliberate in a 'European' way. The political process should be governed by the ideals of deliberation as understood by the European tradition. It will be argued that the value of deliberative democracy lies in its suggesting four ideals that any decision (and, as a corollary, any debate) should address - those of transformation, validity, solidarity and self-government. These ideals not only have more meaning in a 'regulatory world' than the discourse of liberal freedoms or utilitarianism but come with an established European pedigree.