|
Description
Trade policy throughout the developed countries is increasingly characterized as an area of contentious politics. One need only think of the numerous antiglobalization protests and vociferous calls for more transparent policy to see that there is a transnational movement to make trade and other areas of international economic policy move amenable to democratic pressures. Other than taking to the streets, what are the other avenues for exerting democratic influence on trade policy? We think that principal-agent (P-A) theory is especially useful as a means to assess avenues for democratic influence and the likelihood of success in influencing policy. Others have assessed European Union (EU) external trade policy in terms of political legitimacy in more detail (see Meunier, 2003; Meunier & Nicolaidis, 2000). (1) We are not evaluating legitimacy as such, but rather paths of democratic influence. Our assessment is more aligned with that of Lord's (2004) comprehensive "democratic audit of the European Union" than it is of the democratic legitimacy of a specific policy area.
EU is, by many measures, one of the most important players on today's international trade scene. The EU is the largest trader of both goods and services--accounting for approximately 19 percent of world trade in goods and about 24 percent of world trade in services (Europa, 2006). (2) In addition to the sheer volume of EU trade with the rest of the world, EU has numerous bilateral and multilateral trade arrangements with scores of other states across all regions of the globe (Europa, 2006). (3)
Given its volume of international trade and its extensive involvement in dyadic, regional, and global trade arrangements, an improved understanding of how the EU makes external trade policy is increasingly important. Some may argue that trade politics lies outside the normal concerns of citizens and thus does not need to be analyzed in terms of democratic politics. We think that the demonstrable effects of trade on groups within countries, the obvious attempts by such groups to influence policy, and the sheer volume of political pressures from the public clearly demonstrate that EU trade policy is a politicized area of policy and that it is therefore useful to examine what are the channels by which the public can influence the content of trade agreements.
EU external trade policy is an extremely complex process--involving the EU public, the 25 member states' parliaments and governments, and the institutions of EU, including the Council of Ministers, the European Parliament (EP), the European Commission, and the European Court of Justice. It is a system of multilevel governance with overlapping jurisdictions with numerous potential access points for societal interests to influence European external trade policy. The conventional wisdom, however, is that EU has a "democratic deficit," namely, that policymaking at the EU level is insulated from societal pressures. In this article, we evaluate the probable political channels that societal interests could use to influence EU external trade policy. We employ the P-A framework to examine five of the more important relationships that potentially influence EU external trade policy decisionmaking.
Figure 1 shows the "chain of delegation" in EU external trade policymaking and the five P-A relationships assessed here. At the national level, these relationships are: (i) the Member State Publics (as principal) and the Member State Parliaments (as agent); (ii) the Member State Parliaments (as principal) and the Member State Governments (as agent); (iii) at the "nexus" between the national level and the European level is the P-A relationship between the Member State Publics (principal) and the EP (agent); (iv) at the European level these P-A relationships are: the Member State Governments/the EU Council of Ministers (principal) and the EU Commission (agent); and (v) the EP (principal) and the EU Commission (agent).
[FIGURE 1 OMITTED]
Specifically, we assess these principals' ability to screen and select agents, to structure incentives for those agents, to monitor agents either directly or indirectly, and to sanction agents. Doing so enables us to specify more clearly the responsibilities for--and the political influences on--the EU's external trade policymaking. Before we can undertake empirical analyses of the political influences over EU external trade policy, we need to understand better the opportunity structures linking interests to policy. The P-A approach is especially appropriate for illuminating these structures.
The article proceeds as follows. In the first section, we specify our theoretical framework. In the second section, we investigate the channels linking the publics of the member states to the institutions of those member states (parliaments and governments), and then to the EU institutions. In the third section, we examine the links among those EU institutions--the Commission, the Council of Ministers, and the EP. Finally, we offer our conclusions and some suggestions for future research.
Theoretical Framework
Governance is the process by which society rules itself and since any society is a collection of individuals, this necessarily implies the delegation of authority from individuals to other individuals. Indeed, the very idea of a social contract is one of delegated authority. Put somewhat differently, governance is collective action, and collective action necessarily implies organization, which in turn implies delegated authority.
The concept of collective action also brings to mind a class of political phenomena known as collective action problems. According to Kiewiet and McCubbins (1991, pp. 22-23), there are broadly three main types of collective action problems. The first is some variant of prisoner's dilemma in which an individual, or group, seeking the most benefit from collective action with the least cost will often choose not to contribute. Other individuals with similar preferences will likewise choose not to contribute, so the goal of collective action, a public good, is not produced. The second type of collective action problem concerns the coordination of individual choices into a single equilibrium collective choice. Often, more than one equilibrium choice exists and it becomes necessary to have some process or mechanism in place that is able to choose from among the different equilibria. Related to this is the third type of collective action problem discussed by Kiewiet and McCubbins, collective choice instability. Instabilities arise because a decision rule, such as simple majority, may lead to cycling among different alternatives. A common example is that a majority prefers A to B, B to C, and C to A. The "winner" in this case is decided by the order in which the alternatives are considered in pair-wise comparisons.
All three types of collective action problems may be solved by organization and/or institutional rules. For example, the problem of individuals not contributing for the provision of a public good may be solved by contracting with a "third party" to serve as an enforcer. Coordination problems and collective choice instability may be solved by designating an agenda setter in advance who will determine the order in which alternatives, and which alternatives, will be considered. Each solution implies the delegation of authority to a subset of the collective group or to a third party.
While delegation may help to solve problems of collective action and provide the opportunity for the gains from specialization of labor to be realized, delegation also gives rise to a new set of problems. These are commonly known as P-A problems. P-A problems arise because the principal (the person or group who delegates) cannot absolutely guarantee that the agent (the person or group to whom authority is delegated) will perform exactly as the principal wishes. An agent may have preferences that differ from the principal, or the agent may wish to do as little as possible for the principal while receiving maximum compensation. The situation is often exacerbated because the agent possesses information or expertise--from labor specialization or other sources--that the principal does not also possess.
There are four main mechanisms by which principals can mitigate P-A problems (Kiewiet & McCubbins, 1991; McCubbins, Noll, & Weingast, 1987). The first is selection/screening--by which the principal carefully vets the agent to ensure to the greatest degree possible that the agent has preferences and goals similar to those held by the principal. Second, the principal can design an incentive structure that ties the performance of the agent to the agent's compensation. This implies the third mechanism--the careful monitoring of the agent's performance. Finally, the principal can design sanctions that impose some penalty on the agent for poor performance. Sanctions are, of course, the flip side of incentives; incentives are the carrot, while sanctions are the stick. While none of these "solutions" are costless, they can provide the principal greater discretion over the performance of the agent.
We use the presence, or absence, and the institutional form and structure of selection/screening, incentives, monitoring, and sanction mechanisms (SIMS for short) to evaluate five P-A relationships that exist in EU as they pertain to EU's external trade policy. As discussed in the introduction, EU is a very complex institutional environment with numerous P-A links in an Esheresque chain of democracy. While we examine only the top-most layer of the most visible political relationships, we believe this approach is a necessary first step to a more positive-empirical study of the political influences on EU's external trade policy.
Member State Publics (Principal) and Member State Parliaments (Agent)
The most fundamental democratic relationship in the parliamentary systems of Europe is that between the national publics and their national parliaments. (4) It is in the parliaments where citizens are most directly represented in the political process and it is for control of the parliament that most electoral efforts are concentrated. Unlike the United States, the relationship is not between an individual and "their representative," but rather between an individual and "their political party." (5) The European democracies most closely approximate the ideal of the responsible party system by which parties are elected to enact certain policies and are rewarded or punished accordingly (see Klingemann, Hofferbert, & Budge, 1994). The difficulty for European citizens, as in any democratic system, is to coordinate on a vote choice. This difficulty is directly related to district magnitude, the number of elected representatives per constituency (Cox, 1997), and the member states of EU differ widely in the district magnitude of national elections between the UK and France with one,... |
More articles from Policy Studies Journal
How political support influences red tape through developmental cultur..., August 01, 2007
Policy characteristics, patterns of politics, and the minimum wage: to..., August 01, 2007
Letter from the editors.(Editorial), August 01, 2007
Predatory payday lending reform.(Report), August 01, 2007
Expanding access to services to combat child poverty in New York State..., August 01, 2007
Looking for additional articles?
Click here
to search our database of over 3 million articles.
|
%20%20&position=1)