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Journal of Public Policyhttp://journals.cambridge.org/PUP

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The Governance of the European Union: A NewInstitutionalist Approach

Simon J. Bulmer

Journal of Public Policy / Volume 13 / Issue 04 / October 1993, pp 351 - 380

DOI: 10.1017/S0143814X0000115X, Published online: 28 November 2008

Link to this article: http://journals.cambridge.org/abstract_S0143814X0000115X

How to cite this article:Simon J. Bulmer (1993). The Governance of the European Union: A NewInstitutionalist Approach. Journal of Public Policy, 13, pp 351-380 doi:10.1017/S0143814X0000115X

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Jnl Publ.Pol. 13,4 351-380 Copyright 1994 Cambridge University Press

The Governance of the European Union:A New Institutionalist Approach*S I M O N J . B U L M E R , Government UniversityofManchester

A B S T R A C TThe analysisofEuropean integration hastended to use atoolkit drawnfrom international relations.Butsince the revivalofintegration in themid-1980s, thegovernanceofthe European Community and EuropeanUnion has increasingly come to resemble that of a multi-tiered state.Accordingly, this article analyzes the governance of the European Unionfrom a comparative public policy perspective. Usingnew or historicalinstitutionalism, three levelsareconsidered. In the first part, attentionis focused on the EU s institutions and the available instruments ofgovernance. The second part examines the analysis of governance atthe policy-specific or sub-system level, and puts forward an approachbasedongovernance regimes.The final part considers the institutionalroots of the persistent, regulatory character of governance in theEuropean Union.

How best to analyze the governance of the European Union? Whatare thecharacteristics of the policy process associated with thevariousactivities of the European Union? Doesitscollective public policy havecore attributes? Or are individual policies characterised more by thelogicof the particular policyorissue rather thanby aunifying dynamicof the European Union? These are questions which deserve answersand, in particular, answers which are informed by a methodologicalframework.The member states have assumed shared policy responsibility overagrowing rangeofareas, something whichwasagain highlighted by the*The paper is based on research conducted within a project funded by the UK Economic andSocial Research Council on regulatory institutions and practices in the single market. The award(no. Wi 13251014) was within the ESRC s Single European Market Initiative. An earlier versionwas presented at the European Community Studies Association conference, 27-29 May, 1993,Washington D.C. I acknowledge the assistance of Kenneth Armstrong, research officer on theproject, in refining the ideas in the article. I am also grateful toJohn Peterson, Richard Rose andStephen Wilks, together with Peter Vipond and other panel participants at ESCA for helpfulcomments. Responsibility for the content rests with the author.

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352 Simon J. Bulmerformal transfer of competencies associated with the Treaty on EuropeanUnion (TEU). In consequence, collective activities are developingacross the whole spec trum of pub lic policy: from policing to foreign andsecurity policy; from citizenship to immigration; from the internalmarket to the common commercial policy; from the transferability ofsocial security entitlements to labour market regulation; and much elsebesides. Piecing tog ether this jigsaw of activities, it is striking h ow thepostwar era has seen the transformation of established political andinstitutional arrangements, with the emergence of a catalogue of collect-ive activities of member states of the European Union (EU).Integration theorists have tried to dissect this transformation but havetended not to do so from the structuralist vantage point of the accumula-tion of 'state' power at the European level. To some extent this hasoccurred in the work of historians - most notably Alan M ilward (1992) -in studies of how the first transfers of policy responsibilities came about.How long will be it before a political scientist sets his or her researchagenda as identifying the 'historical origins of modern institutional polit-ics in [the EU], a politics distinguished by incoherence and fragmenta-tion in governmental operations and by the absence of clear lines ofauthoritative control '? Substituting 'America' for ' the EU', this was partof the task Skowronek set himself in his study, Building a NewAmericanState (1982, p. viii). A book entitled Building a NewEuropean Statewouldbe bound to create controversy, for reference to the European Union as'a state' does not yet seem to have become acceptable in the socialsciences, and certainly not in political discourse amongst practitioners.Nevertheless, is this not what is effectively under construction, even ifthere is a reluctance to make this explicit? Or even if it is couched inthe language of 'fusing' additional layers of authority onto the nationstate, as in Wolfgang Wessels' (1992) 'fusion theory' explanation of thedynamics of integration.The point of departure of Skowrenek's study of the United States isilluminating with respect both to this fusion theory and to Milward'sthesis of the supranational 'rescue' of the nation state. As Skowronek(1982, p. ix) puts it, '[SJhort of revolutionary change, state buildingis most basically an exercise in reconstructing an already establishedorganization of state power'. European integration has been concernedcentrally with such institutional reconstruction. And both the SingleEuropean Act and the Treaty on European Union are major steps inthis process.

If one seeks parallels from other literatures on nation or state-building, the postwar transformation of the European state can belocated within the crisis-sequence school of political development, forinstance the work of Tilly (1975). Such an exercise makes it striking

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354 Simon J. BuhnerT A B L E I : Institutions and Governance in the European UnionLevel of Analysis Issue IlluminatedTrans-sectoral Institutionsand InstrumentsofGovernancein the EUPolicy Programme Discrete Governance RegimesInstitutional Configuration EC/EU asRegulatory State

The paper's third objective is to pickout someof the distinguishingcharacteristics of the governance of the EU.In some respects, this is anexercise somewhat akin to that undertaken by Richardson (1982)andothers, namely the identification of distinctive national 'policy styles'.However, here too we seek to relate the distinctive characteristicsofthegovernance oftheEU to institutional characteristics.Accordingly, this paper is divided into three parts; their inter-relationship is set out schematically in Table 1. After a brief sectioncontextualising the study ofthe governance oftheEU, the paper firstlooksat the trans-sectoral level of governance,asseen from a new insti-tutionalist perspective in order to dissect the governance structureswhich stand between basic political forces and policy outcomes.Thesecond section seeks to reassemble mattersat the subsystem level withreference to governance regimes. The third section goes one step furtherin re-assembling Community governance, arguing that a commonthread running through Community governance is its regulatorypat-tern. Thus, therange of instruments available to the EU - economic,political and legal- results in a peculiarly regulatory modeofgovern-ance. And this pattern can be detected across a rang of governanceregimes.

Analyzing the CollectiveGovernance of the Member StatesOneofthe key features of the studyof the European Community hith-erto has been thepredominance of analytical devices rooted ininterna-tional relations theory. Thishas beenthe case with much of integrationtheory, particularly functionalism and neo-functionalism, but is alsoclearinthe neo-realist influences inthe work of those seekingto explainintegrative advancesas the productofinter-state bargains,for instancethe 'intergovernmental institutionalism' of Moravcsik (1991). Similarly,the literature on policy-making in the EC was centred aroundneo-functionalism, intergovernmentalism and interdependence: all drawnfrom international relations frameworks (Wallace, Wallace and Webb,1983)-Observationofthe day-to-day activitiesof the European Comm unitysuggests that whatisgoingon is less some mutation of an international

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TheGovernance ofthe European Union 355organisation and more a mu lti-tiered system of governm ent. In wha tother international organisations do we find the involvement of over500 transnational interest groups, interaction with local governmentlobbyists, an elected parliament seeking to play its part in inter-institutional decision-making, and a law-based mode of regulating col-lective governance? Yet this is the substance of the activities of themember states, particularly in the EC 'pillar' of the EU.

Econ om ists seem to have com e to terms with the core issues of govern-ance, for instance in the attention devoted to distributive issues inPadoa-Schioppa's (1987) study of the economic system of the EC. Sim-ilarly, legal scholars have given attention to the legal aspects of govern-ance with their discussions of the 'constitutionalisation' of the EC's legalsystem. Political scientists, by contrast, seem to a striking degree to havecontinued working within international relations paradigms. To be sure,there have been adhocapp lications of pub lic policy methodo logies toindivid ual case studies (see Ho lland , 1987; and Peterson, 1991). Evenanalysis draw n from federal systems of gov ernm ent h as had a limitedimpact thus far on studying the governance of the European Community(see, for instance, Scharpf, 1988; Sb rag ia, 1992).

The approach advocated here is to look at the EC and other collectivedecision-making arenas of the twelve member states as 'governancestructures' familiar in the study of international relations and of nationalpolitics. This starting point may offset the 'intellectual apartheid'resulting from divisions within the discipline of political science. Inparticular, there is something of a continuum between those applyingthe new institutionalist literature in comparative politics and analystsof the international management of policy issues. An example of thiswork would be that by Oran Young (1989) on international institutionalarrangements for environmental matters.

The examination of governance structures places a large amount ofemphasis upon institutions, decision-making procedures and rules. Inattempting to undertake a pathology of the collective governance of theEU, a core concern is with mapping the institutions, decision-makingprocedures, rules and norms embedded in these across policy areas. Anund erlying assum ption is that institutions m atter: that political strugglesare mediated by prevailing institutional arrangements. Hence, thisapproach follows the broad lines of the 'new institutionalist' literaturein political science, viewing institutions as extending beyond the formalorgans of government to include standard operating procedures, so-called soft law, norms and conventions of behaviour. All these institu-tional features ma y shape the patte rn of political behav iour. Ho wever,it is recognised that institutions do not generate political behaviour oftheir own accord; they should not be seen as the determinants of policy.

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356 Simon J. BulmerThis 'new institutionalist ' approach has been associated particularlywith the writings of March and Olsen (1989), but the parameters arequite broad. To take one example, the degree of inclusiveness of the

term 'institutions' also varies in the literature (see Hall, 1986, for aparticularly inclusive usage). An important distinction within new insti-tutionalism is that between rational choice institutionalists and histor-ical institutionalists. The former group sees institutions imposing con-straints upon the rational actions of individuals. By contrast, the latterattributes a larger degree of importance to institutions. The distinctionis summarised by Thelen and Steinmo (1992, p. 9) thus:By shaping not just actors' strategies (as in rational choice), but their goals aswell, and by mediating their relations of cooperation and conflict, institutionsstructure political situations and leave their own imprint on political outcomes.The analysis in this paper reflects the historical institutionalistapproach.Institutionalist analysis can examine different levels of institutionalactivity. One recent study identified three different potential tiers atwhich institutions could affect policy outcomes and governance capacity(Weaver and Rockman, 1993). The first tier compared presidential withpar liam entar y systems of govern men t; the second entailed com parisonwithin these categories; a third tier looked at the effects of specific insti-tutional features rather than systemic ones, for example the effects offederalism or jud icial review.This paper is also concerned with three levels of analysis. The first istrans-sectoral, the overall functioning of the institutions, and how thismay be affected systematically by formal constitutional reform, such asthrough the SEA or the TEU or by informal constitutional conventions,such as the clarifying statements issued on subsidiary since the signingof the TEU or, in an earlier period, the Luxembourg Accords of 1966. Itwas as a result of the Luxem bou rg Accords that the Euro pean Econom icC om m un ity did not take up the treaty provision for qualified majorityvoting at that time but, at French insistence persisted with consensualdecision-making. The Accords had a major consequent impact on gov-ernance capacity.

The second is policy- or issue-specific. The pattern of governancediffers between issue areas. This finding was one of the principalconclusions of the UK Economic and Social Research Council 'sGovernment-Industry Relations research initiative (see, for instance,Wilks and Wright, 1987). It was argued that earlier comparativestud ies - for ins tan ce, K atzen ste in (1978) - h ad identified differentnationalpa tter ns of gov ernanc e c apacity an d po licy w here , in fact,considerable diversity existed within states. As regards E uro pean inte-

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TheGovernance ofthe European Union 357gration the existence of different patterns of sub-system governanceis well established in academic analyses (Wallace, Wallace and Webb1983). This paper's emphasis on 'governance regimes' seeks to linktogether developments at the trans-sectoral, systemic andsub-systemiclevels.The third level of institutional analysis addresses the EU's distinctiveinstitutional configuration. Here the concern is with the features thatset the European Union apart in a comparative analysis of politicalsystems.Each of these levels of institutionalist analysis is now taken in turn,with a view to establishing the possible insights which can be afforded.Throughout this empirical section, we seek to ensure that the institu-tional approach is applicable to all three pillars of the EU: - the firstpil lar, the Founding Treaties of the European Community as amended;the second pillar, the Common Foreign and Security Policy; and thethird pillar, Ju stice an d H om e Affairs cooperation. Th e M aastric htTreaty shows that it is no longer sustainable analytically to set asidethe non-supranational joint activities of the member states, such as for-eign policy cooperation; any viable framework must be applicable to allthree pillars of the European Union.

New Institutionalism and the EU: A Trans-Sectoral ViewThe basic assumption of historical institutionalism is that institutionscannot be regarded as mere arenas within which political action isplayed out. As March and Olsen put it (1989, p. 17):Without denying the importance of both the social context of politics and themotives of individual actors . . . institutional analysis posits a more independentrole for political institutions. The state is not only affected by society but alsoaffects it.Thus formal organisations, bureaucracies, legal systems, together withtheir patte rns of work come to ' . . . provide order and influence changein politics' (March and Olsen, 1989, p. 16). Historical institutionalismis not ju st co ncerned with institution s an d ins titution al devices, forembedden within these are ' . . . beliefs, paradigms, codes, cultures andknow ledge' (M arch and O lsen, 1989, p. 26).Taking this skeletal presentation of the historical institutionalism,what light can be thrown upon the collective governance of the mem-ber states? If one takes the broad range of Community governance,the basic institutional elements comprise the components set out inFigure 1.

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358 SimonJ. BulmerFigure 1: An institutional pathology of Community governanceThe Institutions of GovernanceA. The institutionsof governance1. The supranational/intergovernm ental institutions2. Inter-institutional relations3. Internal institutional organisations4. Internal institutional procedures5. Institutional norms The instruments of governance1. Treaties (supranational or intergovernmental)2. Constituent agreements3. International law4. Secondary EC legislation and decisions5. ECJ jurisprudence6. 'Soft' EC or international law7. Political agreementsThe first issue to be addressed is: what are the institutions involved inthe governance of the EU? This is not evident from a reading of thetreaties. Firstly, not all activities may fall within competences set downin the treaties. This situation applied to foreign policy cooperation beforeits codification in the Single European Act, or to cooperation on homeaffairs matters before the TEU. As a result, political rather than consti-tutional-legal arrangements had to be examined. Even with the codi-fication of Justice and Home Affairs (JHA) cooperation in the TEU,there is little detail provided in that treaty regarding JHA institutions.This economy of detail brings us to the second problem of where govern-ments have deliberately sought to pull a veil over their activities - asin JH A - but it also happens in the well established areas of the ECpillar. Informal meetings of ministers and the European Council beforeits codification in the SEA are examples of institutional arrangementswhose importance could not be adduced from the treaties.The principal legislative institutions ofthe European Community arewell-known.2 Thus the Commission, the European Parliament, theCouncil of Ministers (including COREPER), the Economic and SocialCommittee (Ecosoc) are involved in legislation primarily through theformal decision-making process. The European Council's involvement isdriven by rather different dynamics, such as developing a more strategicapproach to legislation or, at the other extreme, trying to solve specificpolitical problems of principle. The holding of informal minsterial meet-ings appear to have started with the so-called Gymnich meetings, first

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TheGovernanceofthe European Union 359held in the foreign policy cooperation (EPC) arena in 1974. However,such meetings have been held increasingly within the EC pillar. Forinstance, agriculture ministers have hosted meetings to reflect on policy;these usually are held in the country holding the presidency - and evenon the m iniste r's farm, h ard ly a policy ne utr al location At the policymanagement level similar informal practices may be observed. Oneexample has been the routine management of the European MonetarySystem by central bankers meeting in Basle under the auspices of theBank of International Settlements.

Th e E urop ean Co urt of Jus tice's (ECJ) activities are confined to thosepolicy areas which are governed by supranational treaty. Moreover, itsrole in governance is not as an agency having a specific portfolio for aparticular policy regime, as does a European Parliament (EP) commit-tee, a Commission directorate-general or a ' technical ' Council. Whilstit is not part of a policy network, it can have a major impact on anetwork's activities. For instance, its jurisp rud enc e might g rant the ECinstitutions a form of regulatory authority which they felt was lacking.This was the case with the Continental Can and PhilipMorrisjudgementswhich gave the Commission regulatory powers - albeit flawed ones -in respect of the control of mergers and acquisitions. The cases wererespect ive ly : EuropemballageCorporationand Continental Can Co. Inc. v. Com-mission, C a s e 6 / 7 2 ; a n d British American Tobacco Ltd. v . Commission a n dR. J. Reynolds Inc. v. Commission, join ed cases 142/84 and 156/84. T heEC J's judge me nts in theDassonvilleand Cassis de Dijon cases were crucialin shaping important aspects of the regulatory arrangements at the heartof the single market programme: respectivelyProcureurdu Roiv . Dasson-ville, case 8 /74 ; and Rewe-Zentrale v . Bundesmonopolverwaltungfur Brannt-wein,case 120 /78. W he the r the cou rt's rulings are fundam ental, as inthese cases, or rela te to the clarification of more de tailed po ints of legisla-tion, its cumulative impact upon the governance of the EC is of greatimportance. However, outside the EC pillar of EU activity it is virtuallypowerless to act.

Inter institutional relations are important, for they define the power bal-ance between the bodies concerned. Thus, the power of the EuropeanPa rliam en t (EP) is enh anc ed significantly if the area of gov ernanc e fallswithin the ambit of the cooperation procedure rather than within thevery limited consultation procedure. With implementation of the Treatyon European Union, its power is enhanced still further in areas governedby the co-decision procedure for, under specified conditions, the EP isable to veto legislation. Thus, the consultation, cooperation and co-decision procedures each give a different profile to the EP in the overallinstitutional balance (Jacobs et ai, 1992). Thi s is why the legal servicesof the institutions, and especially of the EP, are so exercised by argu-

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360 SimonJ. Bulmerments about the legal base of much EC legislation, for this apparentlytechnical argument defines inter-institutional relations and the meansby which interests are articulated.

Whilst the EP is the best and most obvious example of an institutionwhose institutional power is procedurally defined, the situation is by nomeans exclusive to it. Both the cooperation procedure and the co-decision procedure have important implications for the position of theCouncil of Ministers. For instance, although at a formal level thereappears to be a move towards increased majority voting, there is aninter-institutional logic which goes in the opposite direction. Where thecooperation procedure applies, the Parliament has found that it may beable to capitalise upon an y division within the Co unc il. Ja co bs et al.,1992, p. 186) highlight the case of exhaust emission standards, wherethe E P was able to influence policy significantly by calculation s of inter-institutional interest. However, this has alerted the Council to the factthat it may be advisable to reach decisions consensually to avoid theEP increasing its influence in this way.As for the Commission, its role in inter-institutional relations variesfrom one area of governance to ano ther. W here the cooperation proced-ure applies, it may have to act as mediator not only between membergovernments but also between the EP and the Council. At the otherextreme, its role may be relegated to that of observer, for example inJHA cooperation. Like the EP, it too is concerned with constitutionaldetails because these might strengthen its political position. Forexample, its creativity in basing its proposed directive on the protectionof preg nan t women at the workplace upon the EEC T rea ty's hea lth an dsafety provisions (Article n8a placed it (and the EP) in a strongerinstitutional position in the negotiations that followed (cf. Cram, 1993),and helped circumvent British opposition to legislation.The ECJ's importance to inter-institutional relations is rather moreconfined since it is not a participant in the legislative process. Neverthe-less, it occasionally has an impact, most strikingly when it issues ajudgement concerning inter-institutional obligations. One example ofthis was in the 1980Isoglucosejud ge m en t, w here it annulled a piece ofEC legislation on the basis that the EP had not given its opinion onit. This jud gem en t w as interpreted as giving some teeth to the E P'sinvolvement in legislation via the consultation procedure (Jacobs et al.,'992> PP- 180-182).The distinction betweeninstitutional organisation and institutionalproced-uresis ra th er difficult to identify bu t th e former is perce ived here asessentially static in nature, whereas the latter is more dynamic. Indeed,institutio nal proc edur es are often devised in order to maxim ise the effect-iveness of the institution's organisation.

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TheGovernance ofthe European Union 361The simplest way to illustrate the distinction is by taking a specificexample, namely the case of the European Commission. The predomin-antly vertical nature of the Commission's chain of command is often

referred to, and it is suggested that this may be to the detriment ofpolicy coordination across directorates-general (DGs) (see, for instance,Nugent, 1991, pp . 69-7 2). Thu s Com mission adm inistrators may seetheir loyalty as being to 'their' director-general or 'their' commissionerrather than to a more collegiate notion of the Commission. As the vastmajority of the 23 DGs are organised by policy portfolio, this has afragm enting effect for the coo rdination of Co m m un ity policy as a who le.Where coordination ism ore system atically orga nised , is at the politicallevel, specifically in the College of Commissioners; the Secretariat Gen-eral also plays a limited coordinating role.As decision-making takes place,institutional procedures come into play.There is a strong reliance in all formal organisations on standard operat-ing proced ures. Th e Com mission is no exception to this. In consequence,decision-making tends to start at the middle-ranking level of officialsand then be passed upwards through superiors to the Commissionerand his/her cabinet. On the way up, inter-service consultation, i.e. thecoo rdinatio n between staff in different D Gs , is som etimesad hocin natu rerather than systematic and continuing. Moreover, there is the dangerthat by the time the proposal comes to the formalised collectivedecisional agency, namely the College of Commissioners, and eventhough the College may have considerable discretion over the action itcan take, thinking will already have been conditioned in a fragmentedway within the DGs. Thus the procedural dimension of the Commis-sion's workings may reinforce the organisational tendencies tofragmentation.

A similar distinction between organisational and procedural dimen-sions may be found in the workings of the Council of Ministers. Here,the assignm ent of legislation to a pa rticu lar 'tech nic al' Co uncil effec-tively assigns it to a whole hierarchy. Thus air transport liberalisationwas assigned to the Council of Transport Ministers, with the detailedwork being conducted in the Transport Questions Working Party (AirTransport), one of the many functioning under the auspices of the Com-mittee of Permanent Representatives, COREPER (on working part iesgenerally, see Nu gen t, 1991, p. n o ) . Hence, organisationally, the Councilmay introduce some bias into the process of governance, for othernational ministries with an interest in this subject matter have to chan-nel their views indirectly through transport policy mechanisms.

This is where the procedural dimension comes into play. Thus theBritish De par tm ent of T ra de and Ind ustr y, with its interests in thecompetition aspects of air transport, would have to coordinate its views

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362 Simon J. Bulmerwith the Department of Transport within Whitehall. However, whilstsuch coordination might be assured within the United Kingdom throughthe role of the Cabinet Office, we know that not all member states havethe same level of coordination. In particular, power is divided not onlybetween portfolios, perhaps reinforced by party 'fiefdoms' in a coalitiongovernment, but also between different levels of government, as in Ger-many's federal system (see O Nuallain, 1985,for a comparative picture).Thus, the procedures of member states may exacerbate the isolationwithin the EC Council of Ministers of the transport policy hierarchy.Moreover, the coordination procedures within the Council itself areknown to be deficient, particularly at the ministerial level. The GeneralCouncil has found itself too overwhelmed with work in its guise as the'technical' Council responsible for foreign policy and external relations.Similarly the workload of COREPER hampers coordination there. Thisfragmentation, after all, is how the Council of Agriculture Ministers wasable to act for so long with scant respect for the budgetary policy thatwas being developed by national cabinet colleagues in the Council ofBudget Ministers. Reconciling matters was either neglected or left tothe European Council under circumstances of impending budgetarycrisis. Only with the 1988 budgetary reform measures was an inter-Council reconciliation procedure created to bring both sets of ministerstogether where their policies were manifestly at odds.A final procedural dimension is that played by the country holdingthe presidency of the Council. This role, which is given no real import-ance in the EC treaties, has become an important device for securingagreement on legislation, for instance by means of constructing packagedeals. Operating at all levels of the COREPER/Council/EuropeanCouncil hierarchy, it is an important procedural device aimed at ensur-ing that these organisations function effectively.There is scope for explaining other parts of the institutional organis-ation and procedure in this way, for instance, the range of committeesutilised in policy management at the EC level, the 'comitology' issue(Bradley, 1992). Within the Common Foreign and Security Policy(CFSP) pillar of the EU a quite extensive division of labour has alsobeen developed (Nuttall, 1992). Even in its title, the Justice and HomeAffairs pillar suggests a fragmentation of responsibilities between inter-ior and justice ministries.

As indicated above, March and Olsen's work alerts us to institutionalnorms.These norms can come into play at all institutional levels. Threeexamples illustrate this. A first relates to the highest political level,namely the changed climate throughout the EC institutions followingagreement on, and ratification of, the Single European Act (SEA). Thesingle market deadline of the end of 1992 had an important effect in

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TheGovernance of the European Union 363mobilising the institutions beyond the legislation in the White Paper.For example, it was a contributory factor - along with the changedcorporate context and EC J jud gem ents - to the Cou ncil 's agreemen t onthe EC Merger Control Regulation in 1989. This legislation had firstbeen tabled in 1973 but effectively shelved by the end of the decade. Inthe context of the single market deadline, however, it became clear thatresistance by the Council (or, more accurately, by some of the membergovernments) was no longer feasible, given the normative context withinwhich the EC was functioning. Thus, although it was not in the WhitePaper, the need for merger control legislation was recognised by allinstitutions as indispensable, given the agreement on completion of thesingle market. In consequence, the normative change was also perceivedwithin a much narrower context too.A second example relates to norms embedded at the institutionallevel; the clearest example is the Commission. This institution has totake on the role of'conscience of the European Community'. Its actionsmust reflect the collective interests of the Twelve. This is a strong motiv-ating value in the Commission's work. Nonetheless, it is clear that itcan advan ce this conscience more boldly when supra nation al integrationis in the ascendant. Thus, there is an interaction between two 'levels'of norms - this helps explain how the Commission, under the presidencyof Ja cq ue s Delors, was ab le to play a mo re pro-active role in the EC inthe post-SEA period (see Ludlow, 1991).

It should also be m ention ed tha t the Cou rt of Ju stic e has been heldto have taken a broadly expansionary interpretation of the treaties andof EC law (Rasmussen, 1986). This situation has come about as part ofthe development of a doctrine which Weiler sees as 'self-referential,legal, internal to a possible logic of the Treaty itself (1993, p. 419)-However, in the same article Weiler argues that in the future the ECJwill have to take account of a changed political environment. Thesedevelopments in the doctrine of the ECJ have a strong normativecomponent.The third example concerns the norms on display at the intra-institutional level. Again, the Commission may serve as an example. Dif-ferent DGs have different implicit mission statements. These may rein-force the elements of org anisatio nal and pro cedu ral fragm entation tha thave already been referred to. DG IV (competition) is a case in point.Air transport liberalisation within the EC falls under the responsibilityof DG VII (transport) but also necessitates interaction with DG IV.This is because block exemptions from the competition rules have to benegotiated or renewed for a range of activities, so as to permit inter-airline discussions on route capacity or to facilitate joint ownership ofcomputer reservation systems. DG VII is regarded as taking a rounded

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364 SimonJ. Bulmerview of the EC air transport sector, including its relatively fragmentedsize in the face of American mega-carriers. Thus, it has a certain indus-try sensitivity. By contrast, DG IV is more concerned with competition-based comparators. There is also an underlying view that non-exposureto competition within the EC market-place undermines internationalcompetitiveness. Not surprisingly, this results in a different perspectiveon what regulatory arrangements are desirable for EC air transport. Aninterviewee at the European flag-carrying airlines' interest group, theAssociation of European Airlines, highlighted this in dubbing DG IVas the 'ayatollahs of competition'.Similar tensions may arise along these lines in other areas of theCommission's work. For instance, there can be tensions between DGIII (Internal Market and Industrial Affairs) and DG IV in reviewingconcentrations under the Merger Control Regulation. DG III may takea more favourable view of larger-scale enterprises on the grounds thatthese may facilitate increased European industrial competitiveness inthe global context. DG IV, by contrast, is more concerned with theeffects upon competition. This tension was highlighted most graphicallyin the 1991 consideration of the Aerospatiale/Alenia bid to buy DeHavilland Canada from Boeing. By the narrowest of majorities withinthe College of Commissioners, Sir Leon Brittan, the Commissioner forcompetition, gained support for his proposed decision to block theacquisition, against the wishes of his counterpart presiding over DGI I I , Martin Bangemann.Institutional roles develop that combine norms with obligations thatare rooted in EC legislation and the treaties. There are elements of thisin the Council too, where agriculture ministers may perceive their roleas defending the interests of farmers rather than those of consumers ortaxpayers. But the picture in the Council is more complex still. Itsorganisation is not just by hierarchies of portfolios but also by memberstate. Thus, British ministers may consistently present a more pro-competition line in a range of Councils than, say, their French or Italiancounterparts. This aspect, too, has a normative component.The Instruments ofGovernanceThe most fundamental basis of governance is by means oftreaties, espe-cially the EC treaties themselves (i.e. the founding treaties, the SingleEuropean Act and other amending treaties). Their importance is three-fold. Firstly, the treaties set out the decision-making arrangements andformal institutions. However, the European Council was not set downin any treaty until it had been in regular operation for a decade or so.

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TheGovernance ofthe European Union 365Even within the context of EC activity, not all institutions need be setout in the treaties. Of course, this assumes that one defines the EuropeanCouncil as an institution in the period prior to 1987. That is the positiontaken her e, as it is consistent w ith the new institutionalist framework.There is very little that has changed, as far as the organisation andfunctioning of the European Council is concerned, in the period since1987. Secondly, the treaties set out rights and duties for individuals.This aspect of the treaties, where nation states would normally set outa bill of rights, is not especially dev eloped th erein because m any nation algovernments would jib at such overt recognition of the EU's state-likerank. Nevertheless, the TEU's provisions on citizenship could be seenas part of the development of this aspect. Thirdly, the treaties set outpolicy responsibilities. The Treaty of Paris sets out these responsibilitiesin considerable detail in the coal and steel sectors, whereas the EECTreaty is more concerned with setting out broad policy principles.

The supranational treaties have a significant influence upon thenature of governance in individual areas of activity. For instance, theymay determine the level of competence possessed by the EC. Thus,explicit reference to a policy area in a treaty will give greater authorityto the Commission in proposing legislation. By contrast, resort to Article235 of the Treaty of Rome, which gives a basis for proposing actionbeyond what is set out in the EEC Treaty if this is necessary as a meansto achieving Community goals, puts the Commission in a weaker rolein proposing legislation. We have also noted that the treaty base canhave a major impact on inter-institutional relations and thus on thestrategies of other policy actors.

Similar bro ad functions to the three identified above m ay also apply tothe intergovernm ental pillars. However, the ch aracter of the law therebycreated is of a quite different na tu re from tha t deriving from the sup ran a-tional treaties. Politically, there is a clear interaction between the threepillars but this is hardly the case in terms of constitutional law.Finally, there is the possibility of geographically wider treaties withan impact upon governance. These could include treaties between theEC and third parties, i.e. where the EC is an international legal actor.They could also include international treaties or Council of Europeconventions which shape the collective governance of the Twelve insome particular issue-area, particularly in the J H A pillar.

T he second instrum ent of governan ce concerns constituent agreements.These lack the formal status of treaties and indeed it is usually preciselybecause of their non-bind ing ch aracter tha t they come into being. Never-theless, they may result in the member states undertaking new activities,developing new institutional roles and so on. Within the EC context we

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366 Simon J. Bulmercould locate the 1983 Solemn Declaration on European Union in thiscategory or the various reports which set down the operation of foreignpolicy cooperation until it was formalised in the SEA.

A third instrument of governance is international law. This largelyrelates to areas outside the supranational treaties but not exclusively so.International law has a limited role to play within the domain of thesupranational treaties when the ECJ uses principles of international lawin arriving at its judg em ents on cases it is exam ining. F urth er, whereEC legislation is not compatible with fundamental human rights, theECJ will regard it as invalid (Steiner, 1990, pp. 45-47). The EC itselfmay become subject to international law where it becomes party to atreaty in its own right. In addition to such cases, law comes into playwhen the EU interacts with activities of the Council of Europe and itsconventions, or other such organisations. Such interaction could applyto all three pillars of the EU.With the fourth instrument of governance we encounter the moredetailed territory of EC legislativeacts. They chiefly comprise the second-ary legislation adopted by the EC institutions, as well as the consequen-tial implementing legislation by member states. The form of EC legisla-tion is well known to students of integration: regulations and directivesand their equivalents under the terminology of the Treaty of Paris, (see,for instan ce, Nu gen t, 1991, pp . 1 68-17 1). T he decision to employ aRegulation rather than a Directive, or vice versa, maybe related to themode of governance prevailing in the particular policy situation. Thus,in competition policy the preferred policy instrument is the Regulation.This reflects a range of factors: the fact that the principles of the policyare set down in the EEC Treaty, so only their implementation isrequired; the fact that the Commission's competence is strong in thispolicy area; the need to have uniform application of the law; the factthat the law is addressed to private economic actors rather than to themember states; and so on. Directives, by contrast, introduce some lim-ited discretion as to how the EC's wishes are administered and opera-tionalised in national courts. Thus, the choice between using a Directiveor a Regulation is likely to be closely linked to the prevailing form ofgovernance for the particular subject matter.

A final form of EC legislative act is the Decision. Typically, this isthe way in which the EC institu tions - princip ally the Com mission -implement their own legislation. To take the competition policy areaagain, it is by means of legally binding Decisions that the Commissionmay find companies guilty of transgressions of competition law and,where appropriate, impose a fine. Generally, Decisions are employedby the Commission where it enjoys a regulatory role, i.e. where it hassome discretionary power of its own.

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TheGovernance ofthe European Union 367A fifth instrument of governance is thejurisprudence of the ECJ. Courtdecisions can be seen as having different kinds of effect upon governance,but the unifying feature, as with EC legislative acts, is that they are

confined to those areas subject to the supranational treaties. The firstkind of effect is broad in nature: where an ECJ judgement has a broadimpact. The kinds of decision referred to here are those of a transectoralnature that clarify legal principles across a range of policy areas.Examples would include the landmark decisions on direct effect,supremacy, proportionali ty or the ERTA principle: 'once the Commun-ity, in implementing a common policy, lays down common rules,member States no longer have the right, individually or collectively, tocontract obligations towards non-member States affecting thesecommon rules' (Steiner, 1990, p. 37). This derives from case 22/70Commission v . Council (Re European Road Transport Agreement). A finalexample would be individual entitlement to damages where a Directiveis not properly implemented, as established in the Francovich case: C-6/90 and C -90-90 , Andrea Francovich and Daniela B onifaci v . Italian Republic.

The second kind of decision is quite restricted in effect, i.e. thedecision simply clarifies a point of law, what the treaty intended,whether an institution has acted within its powers, whether a memberstate is in breach ofitsobligations, or som ething similar, with an impa ctconfined to a pa rticu lar policy area. Sometimes such jud ge m en ts havea rhetorical effect upon their immediate legal circumstances. Examplesof this might be the Cassis deDijonorDassonville cases. In narrow termsthese simply resolved specific legal disputes. However, their impact wasnot confined to the specifics of the two cases. Rather they establishedprinciples which the Commission was able to employ in seeking agree-ment on its new approach to standards and mutual recognition. Sim-ilarly, in the case of merger control, the PhilipMorrisjudgem ent madea specific ruling on a case affecting an agreement between enterprisesin the tobacco industry. However, in effect it also gave the Commissionregulatory powers. The Commission's threats to use these helped to getthe member governments to legislate a more clearly defined MergerControl Regulation that offered greater certainty to the corporate actors.

Whilst EC legislative acts are the principal means of purposeful trans-position into practice of the principles in the EC treaty, supported bythe juris pru den ce of the EC J, there m ay remain areas of discretion thatthe negotiating parties wish to clarify. These areas of discretion are oftenclarified by reference to instruments of soft law. Soft law is somewhatelusive and not easy to delineate from hardlaw, on the one h and , andpurely politicalagreem ents, on the other (see Wellens and Bo rchard t,1989). Soft law, in simple terms, relates to rules of conduct that are notlegally enforceable but nonetheless have a legal scope in that they guide

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368 SimonJ. Bulmerthe conduct of the institutions, the member states, individuals andundertakings (Wellens and Borchardt, 1989, p. 285). Examples of softlaw include Commission practice notes and memoranda, declarationsattached to the treaties, and statements recorded in the minutes of theCouncil of Ministers but not normally published (Nicoll, 1993).Two specific examples of the impact of soft law can be shown in thecase of merger control. Both relate to how the legislation agreed in 1989has been put into practice. Firstly, the principal means by which theCommission has regulated mergers has been through the attachment ofconditions, such as the disposal of a division of a company involved ina merger, to its approval of a concentration. Typically, this would occurif a merger would lead to a perceived problem of market dominance inone particular area of activity. Such conditions have legal effect, for theyare set down in a Commission Decision. Yet there is no provision in theMerger Control Regulation (MCR) for making this kind of conditionalapproval. The origin of the practice lies in fact in a 'Commission noticeregarding restrictions ancillary to concentrations' (Official Journal, 1990,C2O3/5ff.). This is a clear case of soft law in operation. Secondly, theminutes of the December 1989 meeting of the Council, at which theMCR was agreed, have become public (see Cook and Kerse, iggr, pp.226-230). They are quite revealing as to the function that statementsin the minutes can play, ranging from individual member states/theCommission indicating their preferences when the MCR is reviewedthrough a statement that the Commission does not normally intend toapply its powers under Articles 85 and 86 to concentrations (i.e. relyingexclusively on the MCR instead) to interpretative statements as to howthe MCR shall be implemented. The statements have had an importantimpact upon the governance of this particular policy area.The concept of soft law was developed in public international lawbefore being applied to the specific circumstances of EC law. It thusfollows that it may come into play in policy areas covered by the twointergovern men tal pillars of the EU . Th us , codes of condu ct and similarinstruments may come into play in policy areas governed by the inter-governmental pillars of the EU, or where other international treatiesare employ ed, such as conventions of the Co uncil of E uro pe . Ind eed , softlaw is perhaps the principal means of operationalising policy principlesoutside the domain of the supranational treaties.

Politicalagreements are not easily distinguished from soft law. Theinventory of EC soft law, as drawn up by Wellens and Borchardt (1989),is so extensive as to encompass political agreements. Where the exactdivide is drawn, therefore, may be somewhat arbitrary. Here, politicalagreements are seen as trans-sectoral in nature and set out, in a manneranalagous to soft law, as clarification of political conventions. Specific

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TheGovernance ofthe European Union 369examples would include the 1966 Luxembourg Accords or, morerecently, the Edinburgh European Council 's declaration on subsidiarity.Drawn up to provide further clarification of the formal treaty provisionon the subject (in the TEU), the provisions set out a number of tests,such as whether European action is desirable and whether it is propor-tionate to policy goals.This detailed presentation of the institutional components of govern-ment aimed not only to illustrate some of the insights that can beobtained from working within a historical institutionalist framework.It was also designed to illustrate the range of institutions and policyinstrum ents that can be employed in the context of Co m m unity govern-ance, both within and outside a supranational treaty framework.However, dissection of this kind cannot offer a full explanation of thegovernance of the European Union. Firstly, it fails to present a dynamicpicture of governance. Secondly, it omits detailed analysis of the role ofpolitical forces, namely the role of interest groups, national interestsarising from domestic politics and so on. It is possible to hypothesise,along the lines of historical institutionalism, that strategies and goalswill be influenced by the institutional arrangements which politicalforces are confronted with. To test this hypothesis, however, it is neces-sary to undertake case studies, something which cannot be attemptedwithin the confines of this paper.

Obtaining a dynamic picture of governance is also something bestachieved within a case study context. However, there is a second aspectto institutional dynamics that not only helps link together this trans-sectoral view of EU governance with case studies conducted at the gov-ernance regime level but also is a potential addition to the historicalinstitutionalist literature. It has been regarded as more effective atexplaining: the 'stickiness' of institutional arran gem ents; the constraintsplaced upon radical policy change; and the distinctive institutional andpolicy circumstances across states (see, for instance, Katzenstein, 1978;Ha ll, 1986; Ike nb erry , 1988; and the discussion in Th elen an d Steinm o,

What is striking about European integration is the dynamic natureof governance since the mid-1980s. To be sure, supporters of a federalEu rope h ave bemo aned some of the reform measures as limited in na turebut, in international comparison, there is a striking degree of institu-tional dynamism. Krasner's (1984) characterization of institutionalchange, as 'punctuated equilibrium' suggests that, at times of crisis,institutional explanations of politics are suspended. However, it wouldbe very difficult to sustain the argument that the EC and its memberstates were in crisis when the SEA and the TEU were negotiated. Therewere, of course, major economic and political challenges but the condi-

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TheGovernance ofthe European Union 371Instead greater analytical attention has been paid to policy subsystemapproaches, a rubric comprising the literatures on policy networks andpolicy communities (cf. Van Waarden, 1992). Empirically, a disaggreg-ated policy sub-system approach was established in the bench-markanalysis of the EC written in the 1970s and revised in the 1980s(Wallace, Wallace and Webb, 1983). Thus, studies of Community gov-ernance have tended to focus on, or include, the policy level, parallelingthe public policy literature's concentration on the policy or issue level(Sbragia, 1992).

Understanding EU governance requires an analytical framework forthe sub-system level of analysis. But, what criteria must it fulfil? It mustbe as clear and parsimonious as possible. It must here be consistentwith an historical institutionalist approach, so that systemic contex-tualisation is possible. It must be able to identify the boundaries of theparticular sub-system. It must be able to map the institutions and actorsinvolved. It must facilitate comparison across EU sub-systems in bothstatic and dynamic terms. It must be able to encompass both theformulation of policy and its implementation. Finally, it must enableconclusions to be drawn about the key political issues of power and thedistribution of benefits.The framework employed is that of the governance regime. The termgovernance encapsulates some key aspects of the empirical reality of theEU and is thus appropriate because the EU represents governance with-out a formal gover nm ent a nd is not ju st co ncerned w ith formal institu-tions but can encompass procedures, norms, conventions and policyinstruments as a core around which interest groups and other actorscluster. The term 'regime' can encompass the looser institutionalarra ng em en ts in some areas of E U activity, for exam ple in J H A policy-making. Regimes, too, have a substantive and normative content (cf.

Kr asn er, 1983). Finally, regimes can be seen as purposive arran gem ents,formal or informal, which govern the interface between the private andpublic domains.The term governance regime derives from work undertaken byCampbell, Hollingsworth and Lindberg (1991) on sectoral governancein the American economy. Their use of governance regimes is in aslightly different context, for they also seek to identify different methodsof economic governance, from the market to promotional networks,across several sectors of the American economy. However, that does notdisqualify application to a more limited scope of enquiry. Indeed, itmakes Campbellet a/'s explanation more parsimonious for the objectiveshere. Campbel l et al. work within the broad framework of new institu-tionalism. They particularly develop three points of institutionalistexplanations of interest to studying governance of the EU. First is their

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372 Simon J. Bulmerthreefold identification of the role of the state (Campbell et ai, 1991,pp. 357-361). The state is conceived as an institutional arena whichprovides unequal access to societal groups for influencing the policyprocess. Secondly, the state is not just an arbitrator but also a 'player'in governance itself. And, thirdly, the state has its own distinctive con-figuration which predisposes it to certain types of activity. Of course,we must note that in their work 'the state' means American institutionsin the present context so this must be understood to mean EU institu-tions. The first role of the state is the well established basis of new andhistorical institutionalism. The role of the state as a player within theinstitutional arena is important for understanding governance trans-formation in the EU. But, as was noted earlier in the paper, the Courtand the Commission are key players in the transformation of EU govern-ance. Taking the case of the ECJ, this applies both to trans-sectoralgovernance or to the governance regime level yet neither the ECJ nor theCommission are institutions designed to reflect political forces, unlikenational governments or the EP. Thus the analytical dimension of thework of Campbell et al. alerts us to the elements of institutional auto-nomy within the EU. This issue addresses one of the key tensions withinnew institutionalism: how much autonomy do institutions possess. His-torical institutionalists agree that institutions are not mere arenas butstructure the way in which socioeconomic forces act. The suggestionhere goes beyond that somewhat, for it posits that the ECJ and theCommission may generate endogenous institutional impetuses for policychange that go beyond the usual representation of institutionalmediation.Their second contribution underscores the role of culture and normsembedded in the state as shaping the selection of policy. In the EUcontext, culture is likely to be about shared procedural norms ratherthan shared views towards, say, the conduct of economic governance.The explanation is simple. Culture develops over a long period; Euro-pean integration is still a recent phenomenon. Thus, the EU has quitedifferent cultural bases: Rhenish, Mediterranean and Anglo-Saxon cap-italism, for example; or Scandinavian, Anglo-Saxon, Mediterranean andBismarckian systems of welfare capitalism. The cultural context embed-ded within the national policies is one of the factors that makes thedevelopment of supranational policy so fraught: indeed, so much morefraught than in comparable federal systems, such as Germany or theUSA.Their third contribution is to give attention to compliance mechan-isms in economic governance; any study of sub-system governance thatfails to take this dimension into account will be too parsimonious. Com-

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374 Simon J. BulmerT A B L E 2 : Sources of Governance Transformation - The Single M arketSource of change Single market examplesEconom ic efficiency Mov e to exploit EC-w ide mark ets to achieve economic

efficiency in single marketTechnological developm ent Perceived lagging behind Jap an ese and US rate ofdevelopmentActors seeking power and control Eur opean mu ltinatio nal compa nies and businessleaders seeking to strengthen competitivenessCu ltura l factors Com plex mix ture of supp ort for greate r integrat ion;increased support for neo-liberalism; trade-off witheconomically weaker states in return for astrengthening of cohesionState policy Nat ional : deliberate transfer of power to supr anat iona llevel as a way of trying to achieve more successfulpolicy management and greater economic growth.Supranational: wish to increase power and fulfiloriginal goals of EEC Treaty

p. 608). In empirical terms, part of this mapping exercise entailsestablishing the particular 'mix' of the institutions and instruments ofgovernance from those discussed earlier in the paper.Sub system comparison. Comparative statics entail comparing the find-ings established in the mapping of different governance regimes. Moreinteresting is the issue of'comparative dynamics'. Here Campbell et alprovide useful categorisation for the transformation of governanceregimes, identifying five sources of transformation: economic efficiency;technological development; actors seeking power and control; culturalfactors; and state policy. In Table 2 we apply these explanations to thesingle market programme for illustrative purposes. The categories areapplicable at various levels of analysis: from the constitutional changeof the SEA down to the details of regulating public procurement.Implementation is incorporated already by virtue of including the com-pliance arrangements when mapping the participants. Since governanceis an iterative process, it is important to incorporate examination ofcompliance mechanisms, for any shortcomings are likely to feed backinto the governance regime. Including implementation in governanceregimes incorporates the judicial process, in particular the im portantrole of the ECJ in the development of governance. The policy network

literature, by contrast, has difficulties in including the ECJ. It also hasdifficulties in incorporating the compliance arrangements, for these maycomprise separate networks in each member state.The impact of policyoutcomeson the distribution of power. M a r c h a n d O l s e n 's(1989) work sought to explain sub-optimal policy outcomes and unin-tended consequences by means of bounded rationality within institu-

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TheGovernanceofthe European Union 375tions. There is little difficulty, therefore, in extending this kind of ana-lysis to the policy sub-system level. It is also possible, assisted by processtracing, to seek the roots of policy outcomes in the institutional medi-ation of bargaining positions. The question of compliance reminds usthat policy outcomes may be subverted at that stage, either deliberatelyor accidently, for example by bureaucratic forces.The governance regime approach to sub-system governance in theEU retains a clear methodological link with the wider context of EUgovernance. For example, policy programmes become subject to horse-trading in the Council of Ministers, so it is crucial to encapsulate theembeddedness of governance regimes in the institutional superstructureof the EU . M oreover, the inclusion of judicia l inpu t an d the im po rtantrole of compliance ensures that these important components of govern-ance are not simply residualised or unexplained. Above all, the govern-ance regime concept remains as yet exempt from what might be termedthe 'Kama Sutra' problem, namely the need to have an illustrated guideto the numerous positions adopted by political scientists within thepolicy networks literature. This brings the analysis back to the widercanvas and to the distinctive organisational configuration of the Euro-pean Union.

The Regulatory Characteristics of EU GovernanceIn recent years, as social scientists have begun to reflect on Communitygovernance one partic ular theme th at has emerged from empirical obser-vation is the regulato ry p atte rn of gov ernan ce (M ajone, 1991; 1993;Dehousse, 1992).From an economic perspective the governance of the EU is strikingbecause, compared to other multi-tiered systems of governance, theEuropean framework has strikingly modest resources of its own. Con-sequently, there are major constraints upon the nature of activity thatcan be pursued. Spending programmes are frequently merely supportiveof national measures, such as most structural fund expenditure. Altern-atively, as in technology programmes, they normally require co-fundingfrom the private sector. Thus, in EC activities expenditure lacks themeasure of autonomy possessed in other multi-tiered or federal systems.Outside the EC pillar, activity is further constrained because budgetaryprovision at the international level is more limited or even non-existent.If this is translated into a public finance interpretation, there is scarcelyany scope for the pursuit of two of the main functions of public budgets,namely stabilisation policy or redistributive meas ures. Instea d expendit-ure is much more confined to an allocation function (cf. Musgrave,

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376 Simon J. Bulmer1959). Critics of the Maastricht road to EMU argue that the proposalsare not viable because of this (Hughes-Hallet, 1994).In a different context, Majone (1993) explains that this bias in thefunction of the EC budget accounts for the emphasis upon social regula-tion rather than welfare policy in the Community's social dimension.But the effect is more far-reaching. As Majone (1991, p. 96) puts itelsewhere:an important characteristic of regulatory policy-making is the limited influenceofthebudget on the activities of regulators. Th e size of non-regulatory, direct-expenditure programmes is constrained by budgetary appropriations and, ulti-mately, by the size of government tax revenues. In contrast, the real costs ofmost regulatory programmes are borne directly by the firms and the individualswho have to comply with them. Compared with these costs, the resourcesneeded to produce the regulations are trivial.T h u s , given the small size of the EC budget, and the large sharetaken by agricultural spending, 'the only way for the Commission toincrease its role is to expand the scope of its regulatory activities'.Outside the supranational treaties a similar principle applies. Sinceeconomic or public finance instruments of the EC are very con-strained, this necessitates budgetary activity through the allocationfunction of spending orit requires legislative reg ulations which placetheir costs upon private economic actors or upon the administrativeapparatuses of the member states.A final point on economic aspects concerns regulation and the state-market relationship. The EU does not intervene in the economy throughownership: it has no such holdings. Moreover, the size of the budgetrestricts subsidies and restricts using the awarding of contracts as ameans of intervention in the market. Thus, traditional avenues of stateintervention in the market are closed off, and the EU's actions arelimited largely to determining the framework conditions within whichthe market operates.This takes us to the political dimension of regulation. In hisanalysis of different types of policy decision in the United States,Lowi (1972) examined the key characteristics of regulatory politics,identifying group bargaining as predominating, as opposed to partyand electoral politics. He also saw regulatory politics as disaggregated,decentralised, interest-oriented and localised. Diametrically opposedto regulatory policy in his schema was constituent policy, a categorywhich would include, in the European context, the Maastricht negoti-ations and their ratification. Strikingly he saw such policy issues ascharacterised by electoral and party politics, and centralised, ideolo-gical and 'systems' level in focus. This distinction could scarcely be

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TheGovernance ofthe European Union 377more apposite to the European context. Regulatory politics is typicallygroup bargaining and interest-oriented politics (see Wallace, 1983,pp . 410-415). This bias is one of the features tending to discouragepopular interest in the European integration. It again vindicateshistorical institutionalists1 view that institutions shape the strategiesof political forces.

Finally, there is the administrative-legal aspect of Co m m unity govern-ance. The central administration of the EC is small. It is not a fullblown federal civil service, for it lacks the resources and manpower.Thus , the predominant method of regulation relies heavily on themember states for the lion's share of implementation, with all the prob-lems that this raises for the legal issue of compliance. And it relies uponthe member states to play a major role in the committees assisting theCommission in its executive role (Dehousse, 1992, p. 390).There are some elements of long chains of implementation in othermulti-tiered political systems. In the Federal Republic of Germany par-ticularly, the administration of federal law is in many cases devolved tothe Lander. However, the skeletal nature of the EC's institutions forpolicy implementation is unique in multi-tiered governance. Hence theregulatory characteristic of the EC/EU is exaggerated markedly in the

administrative-legal domain.By virtue of these economic, political and administrative-legal charac-teristics, a centripetal feature of Community governance is its tendencytowards a regulatory approach to governance. The best match withthese features is in those issue-areas falling under the supranationaltreaties, this unifying trend is a counterpart to the disaggregative find-ings of policy sub-system analysis.

ConclusionThis paper set out with the question: How best to analyze the collectivegovernance of the European Union? In seeking to provide an answer tothis question, it has considered the 'tool-kit' of EU governance. Hood(1983, p. 115) has argued that thinking of government as a tool-kit canhelp in three ways. Firstly, it can help simplify, and make sense of, acomplicated subject-matter. Secondly, and conversely, it can help revealthe different ways in which government might tackle a problem. Thirdly,it offers a way of making comparisons: between government systems,policy areas and so on.In the first part of the paper attention focused on the range of institu-tions and tools available for EU governance, illustrating the differentways the EU can address particular policy areas. In the second part,the paper offered a framework for comparing the sub-systems of EU

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378 SimonJ. Bulmergovernance, namely the notion of governance regimes. Finally, the pa peridentified a regulatory pa tter n of politics as a feature lendin g co herenceto the collective policies of the E U . Above all, this pa pe r h as em pha sizedinstitutions in the trans-sectoral, governance regime and institutionalconfiguration perspectives on the EU, for institutions play a central rolein structuring the governance of the EU. Institutional analysis is thusthe central element of an EU tool-kit.

NOTES1. The analytical debate within Germany is less well-known in English language studies but derivesfrom a research programme of the Deutsche Forschungsgemeinschaft. The roots of German

institutional theory differ from those of new institutionalism. On this, see Gohler, 1987.2. These institutions are not limited to legislative roles but our exposition is confined in this wayfor illustrative purposes. Outside the legislative arena, other institutions come into consideration,such as the Court of Auditors, or issue-specific agencies, such as the European MonetaryInsti tute .3. On the three functions performed by public budgets, see for instance Musgrave, 1959

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