Where to find A Demos for Controlling Global Risk Regulators?
Frans van Waarden
Paper, prepared for the ECPR Joint Sessions in Granada 2005, Session on Transnational PrivateGovernance in the Global Political Economy, organized by Jean-Christophe Graz and AndreasNlke
The argument of the paper, summarized in 12 theses:
1- The state is and has always been in the business of reducing risks and uncertainties for itscitizens; in general, and in particular in the market place. It has done so by providing public goodsin the form of regulation
2- This is also its major legitimation: output or performance legitimation
3- At times it may appear that any regulatory competition between states may go in the directionof a race-to-the-bottom of diminishing regulatory standards; the long-term historical trend hashowever been in the direction of more rather than less regulation, and higher rather than lowerstandards. Usually, crises, scandals, and frauds have driven this trend. They induced politicallegitimation crises, forcing states to increase their intervention in society and the economy. Thisis enhanced by two other developments in democratic societies: a revolution of rising expectationsby ever more assertive citizens, which hold - both as voters and litigants in court - their statesresponsible for providing solutions to ever more risks and uncertainties; and advances in scienceand diffusion of information, which have made citizens aware of risks they were formerly unawareof (e.g. the long-term consequences of asbestos or suspected carcinogens).
4- While the expectations of citizens regarding risk and uncertainty reduction have steadily risen,the capacity of the state to do so is increasingly being threatened, as more and more sources of riskand uncertainty are coming from abroad, from beyond the territory of the nation-state, with theincrease in global interdependencies due to the rise in international trade, the mobility of goods,services, and people, and of ideas and information, in turn due to innovation in technologies oftransportation, telecommunication, and conservation. The mobility of information in turn enhancescitizens expectations: they become almost instantaneous aware of new potential threats to theirwell-being from even the other side of the world (recent example: SARS in China), as well as ofthe reactions and demands from citizens to their states elsewhere.
5- The traditional response of nation-states to such threats from abroad - in itself nothing newunder the sun - has been to try to keep them out: by erecting, maintaining, and enforcing borders -the very essence of a territorial state; and by controlling if not blocking the import or intrusionof foreign goods, people, soldiers, criminals, diseases, ideas, and information consideredharmful to the security of their citizens (and/or not infrequently: the security of the politicalpower holders). This strategy of building fortresses becomes increasingly difficult in aglobalizing world. Citizens demand goods available elsewhere, illegal immigration is rampant,states punish each other for protectionism, terrorists are invisible and difficult to track down, andpolities that have tried to keep seditious ideas out (the DDR, currently China, moslim-fundamentalist ideas in the west) have failed dramatically in an age in which the world isinterconnected by dense networks of TV and radio broadcasting, (mobile) telephony, satellites,the internet, and many means of very frequent and massive air, sea, and road transport.
6- This creates incentives for states to try to extend their control beyond their own territory, byexporting their standards, imposing them on others, entering in the inter-national negotiations onthe harmonization of regulatory standards to increasingly higher levels, or other forms ofregulatory cooperation. As in the past, this race-to-the-top is found at any particular point in time
first and foremost on issues where citizens feel their security acutely threatened by crises orscandals, such as, currently, the insecurities of investment (accountancy scandals), of food andhealth (animal and human epidemics), and of life (terrorism, weapons of mass destruction). Butas crises and scandals follow each other in quick succession and emerge in quite a diversity ofpolicy areas, regulatory races-to-the-top are spreading.
7- However, beyond their borders states do not have official jurisdiction. Therefore they need toseek recourse to negotiations with other states, the use of international public organizations, and,last but not least, to cooperate with private international organizations. These can be firms,associations, and other non-governmental associations. Thus international food regulation andstandard setting is done through organizations such as the FLO, ISEAL, international tradeassociations in food, or large international supermarket chains. They are better capable both to setinternational standards, and to organize the monitoring and enforcement of them. This embodiesan interesting paradox: while at the national level historically the trend went from privateeconomic self-regulation to public regulation (in order to compensate for the deficiencies ofprivate regulation), we now perceive at the international level an opposite trend: from public backto private regulation, because of deficiencies (notably territorial constraints) of public regulation.
8- Many of these regulatory measures to reduce risk and uncertainties have become highlytechnical, and require the involvement of often highly specialized experts: natural scientists,engineers, biologists, veterinarians, medical personnel, ICT-experts, economists, financial experts,immigration, competition and food law lawyers, accountants, military specialists, secretservicemen, airplane security specialists, etc. Given the incentive of states to control sources ofrisk and uncertainty beyond their borders, such experts frequently meet experts of other nations,in the processes of negotiation, attempted imposition, cooperation, and the development ofcommon standards. They tend to form technically specialized policy or epistemic communities.
9- This increasing technocratization facilitates international regulatory cooperation, internationalexchange, mutual learning, and the diffusion of regulatory solutions. People trained in a similardiscipline share common perceptions of the world, of the problems at hand, and of the possibleif not best solutions (which may however not always turn out to be the most effective). They meetfrequently at conferences, read the same specialized journals, and work in or are frequent guestsof specialized international organizations that have been created to facilitate such regulatorycooperation or de facto do so.
10- The development of these international epistemic and regulatory communities represents athird wave of democratization, but a different one than the one Majone (2002) distinguishes,following Dahl (1989). The first wave was that of 2000 years ago: the introduction of directdemocracy in the Athenian city state, in which the demos, the people (or at least a part of it),directly participated in the formulation, but also implementation of public decisions. The secondwave was the introduction of indirect or representative democracy, the indirect participation ofthe demos in policy making, namely through democratically elected representatives. This madeit possible to extend the democratic idea to larger social groups (usually territorially defined).Majone sees the formation of inter-national organizations like the EU as a third stage ofdemocratization. I wonder if it is not much more the introduction of these international expertpolicymaking communities. While the second stage entailed citizens electing representatives whoformulate and administer policies, the third one is a form of second level indirect representativedemocracy: citizens elect representatives who (should) control and supervise technicians - oftenplaced at great arms length - who formulate and administer policies.
11- The development of such international policy making and implementing epistemiccommunities poses serious threats to constitutionalism and democracy. Who controls the politicalpower of these international expert networks and their organizations? Dont we need aconstitutionalization of such expert communities? Of course they provide first and foremostchecks and balances for each other. There is peer review, more or less public exchange ofarguments, within many disciplines there are rival theoretical and paradigmatic schools. They mayvie for domination, but as long as no one succeeds in acquiring a dominating position there issome form of mutual control. This seems to work well in science (though paradigmatic revolutionsare difficult as we know since Kuhn), but should not the formulation and implementation of riskand uncertainty regulation be more publicly accountable? Does not the danger of monopolizationrequire some regulation itself? Do we perhaps need competition authorities for these epistemiccommunities? Should there be some form of affirmative action for disadvantaged schools andapproaches? Or guarantees for market entry for new approaches? Who is to decide which risksand uncertainties require regulation, and which degrees of risk are acceptable?
12- Finally, the question can be posed: what is the demos of this new constitutional democracy?Majone (2002) bases the legitimation for regulatory intervention - that is, the ideal regulatoryjurisdiction - on a territorially circumscribed demos, which derives its identity from a certainhomogeneity. I.e. he links legitimacy - democracy - demos - territory - homogeneity; and from thatconcludes that only nation-states have this homogeneity and therefore