SASE's 22nd Annual Meeting Temple University, Philadelphia June 24-26, 2010 Governance Across Borders: Coordination, Regulation, and Contestation in the Global Economy Analyzing the institutional innovation process: EU regulation through an evolutionary lens Evita Paraskevopoulou, Universidad Carlos III de Madrid

Motivation/Research Questions Innovation is a function of many factors among which we can study the implications public policy Public policy is a function of many factors among which we can study the implications of innovation What are the attributes of the policy process? What are the attributes of the regulatory process? How do new regulations emerge? What are the factors that determine the outcome of the regulatory process? 2

Conceptual Approach Regulations are policies Policies are institutions Institutions are commonly accepted sets of rules that evolve The regulatory process is an institutional process The regulatory process is an evolutionary process The regulatory process resembles the innovation process 3

(Evolutionary?) Attributes of the policy process “Public policy needs to be generated or at least processed within the framework of governmental procedures, influences and organizations” (Hogwood and Gunn, 1984: 24). The policy process is a process of agents´ mobilization, persuasion and negotiation (Slembeck, 1997)  i.e. public policy is the result of a timely process that is shaped by existing institutions and is facilitated by interactions between public and private actors Current changes in the political sphere can be seen as part of a sequence of earlier changes and as setting the scene for future evolutionary developments (….) historical circumstances are essential knowledge that the policy maker needs to possess and continuously update in order to increase the possibilities for the successful planning and implementation of future policies. (Nelson and Winter, 1982) There is policy feedback i.e. “policies produce politics” (Pierson, 1993)  i.e. the policy process is cumulative and path dependent in its nature 4

(Evolutionary?) Attributes of the policy process Politics are a subtype of social evolutionary process that relies on knowledge accumulation for its evolution (Modelski, 1996)  i.e. policy evolution is about learning processes and ideological struggles 5

In politics... Agents rarely achieve important changes through individual action Asymmetry of information (agenda-setting effects) Changes are largely dependent on authority and power Change requires longer time Incentives for learning stem from the will to change existing institutions and political accountability 6

So it is suggested that The regulatory process is an evolutionary process fueled by knowledge accumulation and transition and is facilitated by purposeful actors whose perceptions and choices vary and evolve The regulatory process resembles the innovation process 7

Methods and Empirical context Exploratory study, case studies, semi structured interviews Detergents Industry EU political system, co-decision regulatory process EU Regulations REACH (Registration, Evaluation, Authorisation and Restriction of Chemical substances) 2004 Detergents Regulation GHS (Globally Harmonized System of Classification and Labelling of Chemicals) 8

Attributes of the EU political system and the co-decision process Demand for policy coordination and redistribution of power and advantages to actors at the interfaces of policy levels (Grande, 2001) Understaffing of public apparatus and increasing demand for expert knowledge (Bowen, 2001) High number of access channels, variety of representation and increasing density and frequency of interactions (Crombez, 1997) Inbuilt incentive and sanction mechanisms regarding the transmission of valuable information (Broscheid and Coen, 2003) Degree of access is dependent on the quality of information provided (Bouwen, 2001) Changing patterns of interest representation, firms evolving into sophisticated policy actors (Coen, 2007) 9

Evidence: path dependency and cumulativeness – Changing legal paradigms actors and interactions – Multi-actor, multi-level 10

2004 Detergents Regulation 11

REACH 12

Evidence: changing legal paradigms Path dependence, changing legal paradigms and learning – process of rule formulation co-decision process from Directives to Regulations – problem- solving heuristics Re-allocation of responsibility between private and public actors (REACH) – Scope of implementation of new rules Globalization and harmonization 13

Evidence: Main actors and interactions 14

Variety-selection-retention mechanisms at work Variety  Diversity of ideas, preferences and interests of policy agents that compete to bring their concerns onto policy agendas (John, 1998; Slembeck, 1997; Modelski, 1996)>>> variety of policy problems >>>variety of policy strategies, programs and instruments Selection  Selection processes at all stages of the policy process but largely dependent and controlled by purposeful individuals (Pierson, 1993, 2000) or following Loasby (1999), are channeled by human institutions >>> “endogeneity” of selection criteria (Dosi and Nelson, 1994) and potential political capture Retention  Maintenance and replication of new rule (Dopfer et al., 1994), new divisions of labor>>> guaranteed in politics by compulsory compliance 15

The regulatory process through an evolutionary lens 16

Regulation: an evolutionary process 17

Factors influencing the outcome Source and type of policy issue Policy level of issue emergence The distribution of information among the participant 18

Concluding remarks/issues to discuss Redefine the view on public policy – Policy formation – Policy evolution – Determining factors Regulations as endogenously generated criteria (fear of capture?) Link between knowledge accumulation and bargaining power 19