Principals, agents, and the European Union’s foreign economic policies

In the introduction to this collection on the principal–agent approach and the European Union’s (EU) foreign economic policies we briefly present the EU’s institutional structure for policy-making in trade, monetary, development and international competition and financial policy. We also offer some data on the extent of the EU’s involvement in the international economy. Our discussion of the principal–agent approach and how it can be applied to an analysis of the EU’s foreign economic policies forms the basis of the following contributions. It allows us to formulate three questions that are of particular interest for applications of the principal–agent approach to the EU. Finally, we summarize the various studies included in this collection.

A social network-based approach to assess de facto independence of regulatory agencies

This article uses a policy network perspective to assess the independence of regulatory agencies (RAs) in liberalized public utility sectors. We focus on the de facto independence of RAs from elected politicians, regulatees and other co-regulators. We go further than previous studies, which only undertook a general analysis of the de jure independence of RAs from political authorities. Specifically, we apply a social network analysis (SNA), which concentrates on the attributes and relational profiles of all actors involved in new regulatory arrangements. The concept of de facto independence is applied to the Swiss telecommunications sector in order to provide initial empirical insights. Results clearly show that SNA indicators are an appropriate tool to identify the de facto independence of RAs and can improve knowledge about the issues arising from the emergence of the ‘regulatory State’.

Exceptional or just well connected? Political entrepreneurs and brokers in policy making

Policy brokers and policy entrepreneurs are assumed to have a decisive impact on policy outcomes. Their access to social and political resources is contingent on their influence on other agents. In social network analysis (SNA), entrepreneurs are often closely associated with brokers, because both are agents presumed to benefit from bridging structural holes; for example, gaining advantage through occupying a strategic position in relational space. Our aim here is twofold. First, to conceptually and operationally differentiate policy brokers from policy entrepreneurs premised on assumptions in the policy-process literature; and second, via SNA, to use the output of core algorithms in a cross-sectional analysis of political brokerage and political entrepreneurship. We attempt to simplify the use of graph algebra in answering questions relevant to policy analysis by placing each algorithm within its theoretical context. In the methodology employed, we first identify actors and graph their relations of influence within a specific policy event; then we select the most central actors; and compare their rank in a series of statistics that capture different aspects of their network advantage. We examine betweenness centrality, positive and negative Bonacich power, Burt’s effective size and constraint and honest brokerage as paradigmatic. We employ two case studies to demonstrate the advantages and limitations of each algorithm for differentiating between brokers and entrepreneurs: one on Swiss climate policy and one on EU competition and transport policy.

Dealing with bad guys: actor- and process-level determinants of the “devil shift” in policy making

Policy actors tend to misinterpret and distrust opponents in policy processes. This phenomenon, known as the “devil shift”, consists of the following two dimensions: actors perceive opponents as more powerful and as more evil than they really are. Analysing nine policy processes in Switzerland, this article highlights the drivers of the devil shift at two levels. On the actor level, interest groups, political parties and powerful actors suffer more from the devil shift than state actors and powerless actors. On the process level, the devil shift is stronger in policy processes dealing with socio-economic issues as compared with other issues. Finally, and in line with previous studies, there is less empirical evidence of the power dimension of the devil shift phenomenon than of its evilness dimension.

Regulation and the Management of Expectations - Rating Agencies Revisited

In the aftermath of the 2008 crisis, scholars have begun to revise their conceptions of how market participants interact. While the traditional “rationalist optic” posits market participants who are able to process decisionrelevant information and thereby transform uncertainty into quantifiable risks, the increasingly popular “sociological optic” stresses the role of uncertainty in expectation formation and social conventions for creating confidence in markets. Applications of the sociological optic to concrete regulatory problems are still limited. By subjecting both optics to the same regulatory problem—the role of credit rating agencies (CRAs) and their ratings in capital markets—this paper provides insights into whether the sociological optic offers advice to tackle concrete regulatory problems and discusses the potential of the sociological optic in complementing the rationalist optic. The empirical application suggests that the sociological optic is not only able to improve our understanding of the role of CRAs and their ratings, but also to provide solutions complementary to those posited by the rationalist optic.

Addressing Multilevel Program Complexity by Evaluation Design

In this paper, we present the evaluation design for a complex multilevel program recently introduced in Switzerland. The evaluation embraces the federal level, the cantonal program level, and the project level where target groups are directly addressed. We employ Pawson and Tilley’s realist evaluation approach, in order to do justice to the varying context factors that impact the cantonal programs leading to varying effectiveness of the implemented activities. The application of the model to the canton of Uri shows that the numerous vertical and horizontal relations play a crucial role for the program’s effectiveness. As a general learning for the evaluation of complex programs, we state that there is a need to consider all affected levels of a program and that no monocausal effects can be singled out in programs where multiple interventions address the same problem. Moreover, considering all affected levels of a program can mean going beyond the borders of the actual program organization and including factors that do not directly interfere with the policy delivery as such. In particular, we found that the relationship between the cantonal and the federal level was a crucial organizational factor influencing the effectiveness of the cantonal program.

State Capture from Below? The Contradictory Effects of Decentralisation on Public Spending

This study analyses the contradictory effects of decentralisation on public spending. We distinguish three dimensions of decentralisation and analyse their joint and separate effects on public spending in the Swiss cantons over 20 years. We find that overall decentralisation has a strong, significant and negative effect on the size of the public sector, thus confirming the Leviathan hypothesis. The same holds for fiscal and institutional decentralisation. However, the extent to which political processes and actors are organised locally rather than centrally actually increases central and decreases local spending. This suggests that actors behave strategically when dealing with the centre by offloading the more costly policies. The wider implication of our study is that the balance between self-rule and shared rule has implications also for the size of the overall political system.