EU governance in times of crisis: the role of informality

1. Making Cooperation Work
Informal Governance in the EU and Beyond
(forthcoming with Cornell University Press, 2013)
Mareike Kleine
European Institute
London School of Economics
UNC Chapel Hill
Center for European Studies
7 September 2012

2. The EU as an International Organization
Background
Commonalities:
- Organization of 27 states based on international treaties
- No monopoly of violence, although strong legal system
Differences:
- Far more ambitious objective (a genuine Internal Market)
- Legislative process at its core constantly produces rules
 EU is most successful international organization to date

3. The “Community Method”
(conventional wisdom)
Commission
Council
European
Parliament
Commission
Nat. Admin.
Agencies
Agenda Setting Decision-Making Implementation

4. The Puzzle: Why Informal Governance?
AGENDA SETTING
VOTING
IMPLEMENTATION

5. The “Community Method”
(reality)
Commission
Council
European
Parliament
European
Council
COREPER
Working Groups ComitologyExpert groups
Presidency
Nat. Admin.
Agencies
European
Council
Presidency
Commission
Pre-Setting Agenda Setting Decision-Making Implementation

6. Why Informal Governance?
Central Argument
Informal Governance (IG) adds flexibility to sometimes overly
rigid legal rules.
It serves to resolve potentially disruptive conflicts that
cooperation may suddenly generate at the domestic level.
 Formal and informal rules complement each other in order
to sustain a level of cooperation that would otherwise be
impossible to sustain.

7. Structure of Talk
1 Theory
2 Empirical Strategy and Evidence
3 Informal Governance and the Eurocrisis
4 Positive and Normative Implications

8. Liberal Regime Theory
The demand for added flexibility
 Commitments create value by managing expectations.
 But: Commitments are subject to shocks.
 EU: Shocks to the domestic politics of collective action.
 Demand for situational flexibility

9. Liberal Regime Theory
The supply of added flexibility
 Informal norm of discretion: states should collectively
depart from rules to accommodate gov under pressure
 Norm remains informal b/c it serves to resolve conflicts
that are fundamentally political in nature.
 Adjudicating government resolves tension between
commitment and suspension of rules.
 Formal and informal elements complement each other to
achieve and sustain level of economic integration.

10. Liberal Regime Theory
Testable Implications
1) Variation in practices of informal governance:
 Issue-specific: with propensity for shocks
 Over Time: simultaneously and constant
2) Institutions to cope with moral hazard:
 Adjudicatory authority of “biased” government
 Co-evolution of authority and informal governance

11. Making Cooperation Work
Table of Content
 Introduction and Theory
 Informal Governance in the EC (1959-2009)
 Formal and Informal Governance
 Agenda Setting
 Voting
 Implementation
 Coping with Moral Hazard
 Institutional Solutions to Moral Hazard
 The Council Presidency
 Agenda and Adjudication
 Case Studies
 Conclusion and Extension

12. Evidence I
Informal governance in the EC (1959-2009)

13. Evidence II
Coping with Moral Hazard
 Descriptive Inference: The Council Presidency
systematically accompanies informal governance.
 Multivariate Regression: Issues are dropped when
Presidency faces incentives to collude with claimant.
 Case Studies: Presidency is denied authority when it faces
incentives to collude with claimant.
(cf. Kleine 2012, in Review of International Organizations)

14. Positive Implications
EU and IOs
 Int’l law and politics: IG complements formal rules by
adding political flexibility to them.
 Institutions and time: IG renders commitments adaptable
to dynamic strategic context.
 Autonomy: Informal governance ensures collective state
control of supranational actors.

15. Normative Implications
European Union
 Input: IG makes EU more responsive, i.e. it includes the
voice of those that are most affected by int’l cooperation and
reduces salience of EU politics.
 Procedure: IG increases makes legislative process opaque.
 Output: Domestic distributive effects of EU are weaker than
formal rules (and literature) suggests.

16. Implications for the Eurocrisis
 IG (bailout, bond purchase) sustains formal commitment to
Euro by adding political flexibility in times of crisis.
 Informal governance ensures collective state control of
supranational actors such as ECB.
 IG has (so far) mitigated the domestic distributive impact of
the Eurocrisis; yet
 IG has made processes opaque and reduced accountability.