Regulation and Infrastructure Management: German Regulatory Regimes and the Eu Framework
Eberlein, Burkard, Grande, Edgar, German Policy Studies
In the aftermath of large-scale privatization and liberalization of infrastructure management in Europe, new regulatory institutions and ways of managing network industries such as telecommunications, electricity, and railways have been established. This paper challenges the prominent assumption that, following EU-driven liberalization, regulatory powers simply move from the national to the European level. The paper looks at the German case of transition to a 'regulatory state' in infrastructure management. Assessing the differential impact of Europeanization, it analyses the new institutional set-up of German regulation, and the tasks and problems faced by regulators across three sectors. The German case study indicates that a variety of sectoral (and national) regulatory regimes persist in the context of an EU regulatory framework in statu nascendi. A closer look at the institutional architecture of the EU framework reveals that European and national regulation interact in a complex and dynamic multi-level set-up, reflecting the specific characteristics of the European integration dynamic and of EU multi-level governance. The paper concludes by suggesting some tentative hypotheses on the shape of the European regulatory regime for infrastructure management.
I. Introduction: Europe in the Age of Privatization and Liberalization
Looking back on the recent transformations of the political economy of advanced industrial countries, the privatization of public enterprises and the liberalization of markets rank among the most important changes. The wave of privatization and liberalization has seized almost every European country, and it has cut deep into new areas hitherto sheltered from competition (Vickers and Wright, 1989; Wright, 1994; Lane, 1997). One of the most remarkable examples is the field of infrastructures and utilities, which, traditionally, were state-owned, state-run or at least exempted from market competition.
Infrastructures and utilities belong to those sectors for which the state traditionally took particular responsibility (staatsnahe Sektoren, see Mayntz and Scharpf, 1995). In a historical perspective, this responsibility has taken one of two forms: Either the state has acted as a direct provider or 'producer' of infrastructure services (e.g. public ownership), or public authorities have supervised and controlled--that is, regulated--the private provision of services. The former solution, which--according to Seidman and Gilmour (1986)--can be labeled the "positive state" (Leistungsstaat), has been the dominant form of infrastructure management in Europe. The latter solution, i.e. the "regulatory state", is typically found in the US (see Grande, 1993 and 1997; Majone, 1994 and 1997; Schuppert, 1997).
The privatization and liberalization movement in Europe has changed this traditional picture. The entire infrastructure sector has undergone rapid and radical changes, leading to the decline of the positive state. The general reasons for market-oriented reforms in infrastructure management are, by now, well known. The most important have been: the economic and fiscal crisis, which forced governments to deny financial assistance to ailing and inefficient state enterprises; the hegemony of neo-liberal policy frames, which favor market-based solutions; dynamic technological developments, which made market-reforms feasible; and, last but not least, the intensification of international competition, which exercised pressure on state monopolies (see Henig, Hemnett and Feigenbaum, 1988; Vickers and Wright, 1989; Hancher and Moran, 1989; Clarke and Pitelis, 1993; Wright, 1994).
In studies on European integration and European multi-level governance, the process of privatization and liberalization has been regarded as being affected by the recent 'Europeanization' of policies in two respects. On the one hand, the liberalization of markets has been interpreted as a direct result of the dynamics of European market integration, which called for an opening of nationally insulated markets. …